Supply Chain Goals: Are Yours Balanced?<\/h3><\/div><\/div><\/div>PurchTips edition #400<\/p>\n<\/div>
Can Clashing Supply Chain Goals Be A Good Thing?<\/h4><\/div><\/div><\/div>One supply chain manager\u2019s goals may be to save money, reduce inventory, and improve cash flow. \u00a0Another\u2019s may be to decrease supplier defect rates, improve on-time supplier delivery, and increase fill rate.\u00a0 In these cases, each supply chain manager has synergistic goals \u2013 none really conflict.\u00a0 But, it\u2019s not always optimal if all supply chain goals are synergistic.<\/p>\n
Supply chain\u2019s impact on the overall performance of an organization is multi-faceted.\u00a0 For an organization to succeed, it may actually be necessary to have supply chain goals that seem to compete with one another.\u00a0 Here are two examples:<\/p>\n
Cost Savings vs. Quality:<\/strong>\u00a0 Cost savings seems like a logical supply chain goal.\u00a0 There are a multitude of cost savings techniques.\u00a0 But, some are counter-productive.\u00a0 One technique would be to seek out and procure lower-priced products and services without regard to quality.\u00a0 By doing so, your unit price may decrease.\u00a0\u00a0 But, your organization may then face an onslaught of returns due to defects, angry customers and\/or lost market share. It\u2019s easy to see how cost savings goals and quality goals can appear to conflict.\u00a0 However, you should welcome the challenge to drive improvement in both areas.<\/p>\nFill Rate vs. Average Inventory Value:<\/strong>\u00a0 Fill rate is your organization\u2019s percentage of outgoing orders that are fulfilled on-time.\u00a0 Like achieving cost savings, there are a multitude of techniques to improve fill rate, some more desirable than others.\u00a0 You could increase inventory to improve fill rate.\u00a0 But that can be a costly solution compared to other options like improving supplier performance.\u00a0 So, ideally, you want to improve fill rate while also decreasing inventory and its costs.<\/p>\nTop-performing supply chains find ways to succeed despite seemingly conflicting goals.\u00a0 They don\u2019t totally sacrifice progress towards one goal to reach another.\u00a0 Balanced supply chain goals can lead to the most sustainable results for organizations.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
Want A More Rewarding Procurement Career?<\/h5><\/div>![](\"https:\/\/www.certitrek.com\/nlpa\/wp-content\/uploads\/sites\/5\/2021\/04\/career.jpg\" "\\"career\\"")
<\/span><\/div>Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Nothing will change unless you take action towards becoming a world-class procurement professional. Work your way up NLPA\u2019s CPO Suite Programs, an enhanced version of our SPSM certifications and bring the most modern procurement practices into your organization and achieve your career potential.<\/p>\n
Download our NLPA Course Catalog<\/strong> for a comprehensive list of the CPO Certification Programs and their corresponding modules per level.<\/p>\n<\/div>
PurchTips edition #400<\/p>\n<\/div>
Can Clashing Supply Chain Goals Be A Good Thing?<\/h4><\/div><\/div><\/div>One supply chain manager\u2019s goals may be to save money, reduce inventory, and improve cash flow. \u00a0Another\u2019s may be to decrease supplier defect rates, improve on-time supplier delivery, and increase fill rate.\u00a0 In these cases, each supply chain manager has synergistic goals \u2013 none really conflict.\u00a0 But, it\u2019s not always optimal if all supply chain goals are synergistic.<\/p>\n
Supply chain\u2019s impact on the overall performance of an organization is multi-faceted.\u00a0 For an organization to succeed, it may actually be necessary to have supply chain goals that seem to compete with one another.\u00a0 Here are two examples:<\/p>\n
Cost Savings vs. Quality:<\/strong>\u00a0 Cost savings seems like a logical supply chain goal.\u00a0 There are a multitude of cost savings techniques.\u00a0 But, some are counter-productive.\u00a0 One technique would be to seek out and procure lower-priced products and services without regard to quality.\u00a0 By doing so, your unit price may decrease.\u00a0\u00a0 But, your organization may then face an onslaught of returns due to defects, angry customers and\/or lost market share. It\u2019s easy to see how cost savings goals and quality goals can appear to conflict.\u00a0 However, you should welcome the challenge to drive improvement in both areas.<\/p>\nFill Rate vs. Average Inventory Value:<\/strong>\u00a0 Fill rate is your organization\u2019s percentage of outgoing orders that are fulfilled on-time.\u00a0 Like achieving cost savings, there are a multitude of techniques to improve fill rate, some more desirable than others.\u00a0 You could increase inventory to improve fill rate.\u00a0 But that can be a costly solution compared to other options like improving supplier performance.\u00a0 So, ideally, you want to improve fill rate while also decreasing inventory and its costs.<\/p>\nTop-performing supply chains find ways to succeed despite seemingly conflicting goals.\u00a0 They don\u2019t totally sacrifice progress towards one goal to reach another.\u00a0 Balanced supply chain goals can lead to the most sustainable results for organizations.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
Want A More Rewarding Procurement Career?<\/h5><\/div><\/span><\/div>Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Nothing will change unless you take action towards becoming a world-class procurement professional. Work your way up NLPA\u2019s CPO Suite Programs, an enhanced version of our SPSM certifications and bring the most modern procurement practices into your organization and achieve your career potential.<\/p>\n
Download our NLPA Course Catalog<\/strong> for a comprehensive list of the CPO Certification Programs and their corresponding modules per level.<\/p>\n<\/div>
One supply chain manager\u2019s goals may be to save money, reduce inventory, and improve cash flow. \u00a0Another\u2019s may be to decrease supplier defect rates, improve on-time supplier delivery, and increase fill rate.\u00a0 In these cases, each supply chain manager has synergistic goals \u2013 none really conflict.\u00a0 But, it\u2019s not always optimal if all supply chain goals are synergistic.<\/p>\n
Supply chain\u2019s impact on the overall performance of an organization is multi-faceted.\u00a0 For an organization to succeed, it may actually be necessary to have supply chain goals that seem to compete with one another.\u00a0 Here are two examples:<\/p>\n
Cost Savings vs. Quality:<\/strong>\u00a0 Cost savings seems like a logical supply chain goal.\u00a0 There are a multitude of cost savings techniques.\u00a0 But, some are counter-productive.\u00a0 One technique would be to seek out and procure lower-priced products and services without regard to quality.\u00a0 By doing so, your unit price may decrease.\u00a0\u00a0 But, your organization may then face an onslaught of returns due to defects, angry customers and\/or lost market share. It\u2019s easy to see how cost savings goals and quality goals can appear to conflict.\u00a0 However, you should welcome the challenge to drive improvement in both areas.<\/p>\n Fill Rate vs. Average Inventory Value:<\/strong>\u00a0 Fill rate is your organization\u2019s percentage of outgoing orders that are fulfilled on-time.\u00a0 Like achieving cost savings, there are a multitude of techniques to improve fill rate, some more desirable than others.\u00a0 You could increase inventory to improve fill rate.\u00a0 But that can be a costly solution compared to other options like improving supplier performance.\u00a0 So, ideally, you want to improve fill rate while also decreasing inventory and its costs.<\/p>\n Top-performing supply chains find ways to succeed despite seemingly conflicting goals.\u00a0 They don\u2019t totally sacrifice progress towards one goal to reach another.\u00a0 Balanced supply chain goals can lead to the most sustainable results for organizations.<\/p>\n<\/div><\/div><\/div><\/div><\/div> Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Nothing will change unless you take action towards becoming a world-class procurement professional. Work your way up NLPA\u2019s CPO Suite Programs, an enhanced version of our SPSM certifications and bring the most modern procurement practices into your organization and achieve your career potential.<\/p>\n Download our NLPA Course Catalog<\/strong> for a comprehensive list of the CPO Certification Programs and their corresponding modules per level.<\/p>\n<\/div>Want A More Rewarding Procurement Career?<\/h5><\/div>
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