{"id":11194,"date":"2021-04-07T03:05:14","date_gmt":"2021-04-07T07:05:14","guid":{"rendered":"https:\/\/www.certitrek.com\/nlpa\/?page_id=11194"},"modified":"2021-10-05T11:18:32","modified_gmt":"2021-10-05T15:18:32","slug":"death-of-supply-chain-management-in-4d-the-4-daggers","status":"publish","type":"page","link":"https:\/\/www.certitrek.com\/nlpa\/news\/purchasing-articles\/death-of-supply-chain-management-in-4d-the-4-daggers\/","title":{"rendered":"Death of Supply Chain Management in 4D The 4 Daggers"},"content":{"rendered":"

Death of Supply Chain Management in 4D The 4 Daggers<\/h3><\/div><\/div><\/div>

PurchTips edition #414<\/p>\n<\/div>

Explore Death of Supply Chain Management in 4D<\/h4><\/div><\/div><\/div>

A Supply Chain is a system composed of Technology, Processes, Suppliers, Customers, Employees, Culture, Machines, Metrics, Net Works, Risk Factors and Facilities. The cumulative interaction of these parts dictates the caliber of outputs that are yielded as products and services. The concept of Global Supply Management as we know it is facing monumental challenges from shifts in thought leadership, disruptive technologies, cultural shifts, shifts in customer requirements, Piracy, Cyber Terrorism and Trade Wars.<\/p>\n

The Supply Chain Mandate: The Management of the Procurement, Purchasing, Production, and Logistics Functions. In other words, it is the total set of activities ranging from the translation of customer requirements, selection of suppliers, acquisition of raw materials to conversion to finished products and services that are delivered to customers.<\/p>\n

Supply Chain Leaders must possess a wide range of talents including the sciences of Environmental Scanning and Scenario Planning.<\/strong><\/p>\n

    \n
  1. Socio-Demographic Trends<\/li>\n
  2. Competitive Intelligence and competitor Trends<\/li>\n
  3. Ecological Trends<\/li>\n
  4. Economic Trends<\/li>\n
  5. Political Trends,\u00a0Trade Wars<\/strong><\/li>\n
  6. Technological Trends,\u00a0Cyber Security, Blockchain, Big Data, Artificial Intelligence<\/strong><\/li>\n
  7. Industry Trends<\/li>\n
  8. Customer Trends<\/li>\n<\/ol>\n

    Supply Chain Managers must manage the above trends by:<\/strong><\/p>\n

      \n
    1. Determining if the trends are positive, negative, or stagnant<\/li>\n
    2. Then understanding their organizations\u2019 ability to respond to the above trends<\/li>\n
    3. Deploying effective and prioritized strategies in response to the above trends.<\/li>\n
    4. Deploying effective\u00a0Risk Management strategies<\/strong>\u00a0where required<\/li>\n<\/ol>\n

      The Modern Supply Chain faces many challenges but four of them are like Daggers.<\/strong><\/p>\n

      The 4 Critical Daggers at the throat of Modern Supply Chain Management:<\/p>\n

        \n
      1. Degree of Systemic Waste \u2013<\/strong>\u00a0Supply Chain Systems Waste is rampant today. On average 90% of activities in the modern supply chain do not generate value. A definition of Value is essential at this point.\u00a0Value has 3 components<\/em><\/strong>: I.) There is\u00a0a\u00a0physical transformation<\/u><\/em>\u00a0from one point to the next. II.) The products or services are\u00a0delivered right the first time<\/u><\/em>)\u00a0Customers are willing to pay<\/u><\/em>\u00a0f<\/u>or the products or services.<\/li>\n<\/ol>\n

        Supply Chain Waste is derived in 8 forms, all posing significant threats<\/strong>:<\/p>\n

          \n
        1. Transportation<\/strong>\u00a0Waste, caused by unnecessary transportation of people, materials, and information.<\/li>\n
        2. Inventory<\/strong>\u00a0Waste, too little inventory causing loss of sale and too much inventory build up<\/li>\n
        3. Waiting\u00a0<\/strong>Waste, waiting for materials, information, instructions, approvals and equipment<\/li>\n
        4. Over-Production<\/strong>\u00a0Waste, producing more than necessary, consuming unnecessary resources<\/li>\n
        5. Over-Processing<\/strong>\u00a0Waste, touching a product or service too many times<\/li>\n
        6. Defects<\/strong>\u00a0generated by producing products and services that do not meet customer specifications<\/li>\n
        7. Skills<\/strong>\u00a0Waste, inappropriate utilization of human capital<\/li>\n<\/ol>\n

          Solution:<\/strong>\u00a0Conduct regular Waste Audits to identify and quantify the 8 waste elements. Re-engineer Supply Chains to reduce waste.<\/p>\n

          Tools<\/strong>: Waste Audit Matrix (see Figure 1), Spaghetti Analysis and Pareto Charts<\/p>\n

          \u00a0<\/em>Figure 1,\u00a0Waste Audit XYZ Caf\u00e9<\/strong><\/em><\/p>\n

          \"\"<\/p>\n

          Source:<\/strong>\u00a0USA LEAN Management Consulting, permission granted for use<\/p>\n

            \n
          1. Degree of Delays \u2013<\/strong>\u00a0Delays and \u201cWaiting\u201d work in tandem. Delays can be considered as the late delivery of products or services because of waiting for information, materials, instruction, clearance, inspection, rework to be performed. Supply Chain delays create staggering cost drivers and waste of resources.<\/li>\n<\/ol>\n

            Solution:<\/strong>\u00a0Conduct regular Audits to identify and quantify delays Re-engineer Supply Chains to reduce Delays.<\/p>\n

            \u00a0Tools<\/strong>:\u00a0Value Stream Analysis<\/strong>\u00a0(see Figure 2), Network Diagrams<\/p>\n

            \u00a0Figure 2,\u00a0Value stream Analysis<\/strong><\/em><\/p>\n

            \"\"<\/p>\n

              \n
            1. Degree of Inflexibility \u2013<\/strong>\u00a0In the Modern\u00a0Supply Chain Management<\/strong>\u00a0we often witness the inability of businesses to rapidly respond to shifts in customer tastes, and demand requirements. Many firms struggle to balance demand and supply constraints. Many supply chains struggle to effectively meet customer demand that is outside of the domain of contracted products and services (Outside Flexibility).<\/li>\n<\/ol>\n

              Solution:<\/strong>\u00a0Conduct regular Audits to identify organizational inflexibility. Re-Engineer Supply Chains to increase Upside and Outside Flexibility. Simplify Product Families, Product Designs, and Product Platforms.<\/p>\n

              Tools<\/strong>: Upside and Outside Flexibility Matrices. Design for X, Design for Six Sigma (DFSS), CTQ Matrix, Customer Requirement Matrix, Design FMEA, Process FMEA (Failure Mode and Effects Analysis)<\/p>\n

                \n
              1. Degree of Deviation \u2013<\/strong>\u00a0Rampant variation or deviation from customer specifications is the order of the day for products and services flowing through the modern supply chains.<\/li>\n<\/ol>\n

                Sources of Supply Chain Deviation:<\/strong><\/p>\n

                  \n
                1. Machines<\/strong>, varying settings, tolerances, speeds<\/li>\n
                2. People<\/strong>, varying work practices and manners of executing workflows\u00a0(See Figure 3)<\/strong><\/li>\n
                3. Information<\/strong>, varying timelines and quality of information<\/li>\n
                4. Process<\/strong>\u00a0variation<\/li>\n
                5. Materials<\/strong>, variation of quality of raw materials and other inputs<\/li>\n
                6. Measurement<\/strong>\u00a0System Bias and Variation<\/li>\n
                7. Suppliers,\u00a0<\/strong>variation in raw material quality and delivery<\/li>\n<\/ol>\n

                  Solution:<\/strong>\u00a0Conduct regular Audits to identify and quantify deviation. Re-Engineer Supply Chains to reduce Deviation.<\/p>\n

                  Blockchain<\/u><\/b>, Artificial Intelligence, Robotics, Supply Chain Scenario Planning<\/u><\/strong><\/p>\n

                  Tools<\/strong>: Control Charts, Pre-Control Charts, Sigma Calculation Matrix, DPMO Matrix, CP, CPk, PP, PPk Indices, Regression Analysis and Design of Experiments.<\/p>\n

                  \u00a0Figure 3,\u00a0Pre-Control Chart<\/strong><\/em><\/p>\n

                  \"\"<\/p>\n

                  Notes:<\/em><\/strong><\/p>\n

                    \n
                  1. Service Performance Levels in the Red Zone do not meet Customer Requirements of Speed of Service.\u00a0<\/em>This is NOT ACCEPTABLE<\/u><\/strong><\/li>\n
                  2. Service Performance Levels in Yellow are dangerously close to the Customer Requirements of Speed of Service.\u00a0<\/em>This is ACCEPTABLE<\/u><\/strong><\/li>\n
                  3. Service Performance Levels in Green are meeting to the Customer Expectations of Speed of Service.\u00a0<\/em>This is ACCEPTABLE<\/u><\/strong><\/li>\n<\/ol>\n

                    \"\"<\/p>\n

                    How are the critical elements of your supply chain performing?<\/strong><\/p>\n

                    Source:<\/strong>\u00a0USA LEAN Management Consulting, permission granted for use<\/p>\n

                    NLPA Library:<\/strong>\u00a0Looking for authoritative\u00a0procurement templates<\/a><\/strong>, tools, webinars, and more?\u00a0 Stop trying to create resources\u00a0from scratch and start taking advantage\u00a0of having exactly what you need right at your fingertips in the NLPA Library.<\/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>

                    Download<\/span><\/a><\/div>