Until you can leverage what it takes to succeed, most businesses today will struggle to maintain fiscal viability and relevance in the Modern Global Market.  The root causes of these issues often stem from a clash of the following critical Supply Chain Variables:

  1. Poor Toxic Culture
  2. Inability to execute good Business Strategies
  3. Flawed Processes
  4. Flawed or outdated Technology and Equipment that limits visibility
  5. Inability to attract and retain top tier Talent
  6. Inefficient Logistics and Business Metrics

The Next Level Purchasing Body of Knowledge underpins, integrates and enhances the essential components of Supply Chain Management in simple how-to-do steps. This cutting-edge BOK is designed by practitioners for practitioners.

The chronic business issues mentioned above are a function of unnecessary complexity, lack of systems thinking acumen, silo thinking, poor strategy, lack of visibility, poor strategic alignment, outsourcing critical supply chain functions to the wrong partners and so on.

Some top-class organizations demonstrate a great ability to manage these issues and understand and implement responses to the political, sustainability, financial, demographic, ecological and competitive trends that affect their industry and supply chain capacity.

Many top-class Supply Chain Operations have the following components:

Dynamic Culture: A culture that is open to innovation, candor, risk-taking, and carefully managed for diversity and change management. These characteristics make it agile and able to rapidly deploy thought leadership and other vital assets to shifts in market pressures. Employee traits such as collaboration, open-mindedness, and willingness to disrupt and challenge conventional thinking are highly praised and rewarded. Social Responsibility is a major dimension of their business strategy.

Execution of Good Business Strategies: A culture of openness to change, agility, risk-taking and innovation enables it to execute its strategic initiatives with lethal precision.

Three essential dimensions drive great strategies:

  • Leveraging and enhancing its Core Competencies through Continuous Improvement. Making warehousing and logistics two critical disciplines, core competency. The dramatic reduction in reliance on 3PL companies such as FedEx and UPS have enabled it to reduce cost, reduce touch points, reduce complexity, and increase the speed of delivery
  • Leveraging the acquisition of other companies to neutralize critical deficiencies. A few years ago, Amazon purchased Kiva Robots and has deployed several thousand robots to leverage speed and accuracy. This action has resulted in a dramatic cost reduction in its warehouse operations. The acquisition of Whole Foods has enabled Amazon to smash formidable barriers to a profitable entry into the grocery industry.
  • Including customer feedback via Voice of the Customer Data Collection in key strategic decisions and designing products and services to meet those requirements.

Simple Robust Process: Simple processes that are highly error proofed. Efficiency, speed, and flow are the forefront of Process Design and Auditing Doctrine. All process mechanisms are underpinned by LEAN Principles, which mandate an unwavering fight against process waste caused by excessive transportation, motion, inventories, waiting (for products and information, over-processing, over-production, and defects. Workstations are simple, ergonomic, visually controlled, and designed to reduce process waste.

Easy to use Technology and Robust Equipment Maintenance: Technology and error-proofing mechanisms that are easy to learn and use. Special care is taken to guarantee near-zero equipment failure, high availability, and uptime. This is done by leveraging Total Productive Maintenance (TPM) and Overall Equipment Effectiveness (OEE) both principles from LEAN Methodology.

Top Tier Talent: HR Functions that are highly strategic and sophisticated. Robust retention, rewards and recognition programs are in place. High morale and exceptional human capital supported by robust processes and technology make the companies formidable competitors and conquerors of market share.

Logistics Excellence and Business Metrics: Mastering the science of creating logistics networks that are slim trim and efficient. The company leverages a few key metrics and assures that data is available in many cases in real time. Driving and measuring the success of its business strategy by utilizing the Balanced Score Card Methodology. Its metrics are selected from four key areas: Financial, Process/Quality, Employee and Customer. Special care is taken to select balancing metrics. For example, Delivery Lead Time is measured in conjunction with Picking Accuracy.

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David Millington, M.Sc., QSM, NPDP, CL6σBB, SPP, SPSM3®, CM®
About the Author:

David Millington, M.Sc., QSM, NPDP, CL6σBB, SPP, SPSM3®, CM®

Director of Education, NLPA