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sinha.rk.dr@gmail.com
Supply Chain improvements must deliver tangible value to business.
It’s quite a provocative statement. Does it mean that many improvements carried out by our supply chain team members don’t add real value to the business? Unfortunately, yes.
Real value addition leads to business growth. It’s perceived by the customers in terms of improved product availability, higher OTIF, lower lead times, fresher products…
If our improvements haven’t moved the needle on these customer-relevant metrics, we are possibly falling in one of the two common traps.
The first trap is making an improvement where it really doesn’t matter, in non-constraint and non-bottleneck areas. It won’t move the needle on customer facing metrics.
The second trap is not revising the planning parameters when we improve a fundamental supply chain capability. For example, we improve supply lead time from 2 days to 1 day, but the customer doesn’t know about it.
Are we making relevant improvements and are we leveraging them well?
Point to ponder…