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sinha.rk.dr@gmail.com
How should we set the Supply Chain improvement targets?
There are two important considerations in setting the targets – the parameters on which targets should be set and the quantum of improvement aimed for.
Many companies focus on internal parameters like cost and productivity. If the goals contain only these parameters, focus on consumers gets diluted. My experience suggests that companies should set their primary goals which are consumer focused, such as product availability, freshness of stocks, delivery lead time.
For setting the quantum of improvement, the prevailing practice of benchmarking against the competition rarely helps… it only leads to modest improvements. We should rather aim for the best that the consumer can possibly get, find out the current gap and aim to bridge a certain portion of the gap. For example, if the current level of product availability is 90%, we should aim to bridge the gap of 10% instead of focusing on how the competitors are performing.
This way of target setting maintains the sharp focus on consumers and puts the team on the path of ongoing improvement.
Would love to hear from you about the practice currently followed.