{"id":2553,"date":"2008-11-12T15:24:00","date_gmt":"2008-11-12T15:24:00","guid":{"rendered":"https:\/\/www.certitrek.com\/nlpa\/2008\/11\/12\/whitepaper-wednesday-optimizing-supply-chain-performance\/"},"modified":"2023-07-25T04:07:07","modified_gmt":"2023-07-25T08:07:07","slug":"optimizing-supply-chain-performance","status":"publish","type":"post","link":"https:\/\/www.certitrek.com\/nlpa\/blog\/optimizing-supply-chain-performance\/","title":{"rendered":"Optimizing Supply Chain Performance"},"content":{"rendered":"<p>This is a review of a whitepaper entitled \u201cOptimizing Performance Across Your Supply Chain\u201d from Information Builders.<\/p>\n<p>It addressed a variety of topics from competing supply chain objectives to <a href=\"https:\/\/www.certitrek.com\/nlpa\/news\/purchasing-articles\/powerful-approach-for-managing-your-spend-and-risk\/\">managing risk<\/a> to sharing information with suppliers to achieving <a href=\"https:\/\/www.certitrek.com\/nlpa\/news\/purchasing-articles\/cost-savings-definitions\/\">cost savings<\/a>. While it didn\u2019t necessarily go into an overwhelming amount of depth on any topic, there were a few noteworthy nuggets.<\/p>\n<p>I liked a piece of McKinsey research cited in the whitepaper. According to the whitepaper, \u201cA recent study of leading supply chain companies by McKinsey asked company executives what they do to minimize the increased risk of supplying customers effectively.\u201d A graph was listed showing the responses and they were (sorted from most common to least common):<\/p>\n<ul>\n<li>Performance contracts with suppliers or service providers<\/li>\n<li>Alerting customers well ahead of time to potential concerns<\/li>\n<li>Redundant suppliers\/product designs<\/li>\n<li>Passing price increases through to customers<\/li>\n<li>Vertical integration<\/li>\n<li>Currency hedges<\/li>\n<li>Insurance<\/li>\n<li>Commodity hedges<\/li>\n<\/ul>\n<p>The publication cites a fascinating excerpt from the book \u201cHow\u201d by Dov Seidman in which Seidman comments on research conducted by professors Jeffrey H. Dyer of the Marriott School at Brigham Young University and Wujin Chu of the College of Business Administration at Seoul National University. Dyer and Chu surveyed almost 350 buyer\/supplier relationships involving eight automakers in the United States, Japan, and South Korea and found a direct and dramatic relationship between trust and transaction costs. The least trusted buyer incurred procurement costs six times higher than the most trusted: same parts; same sorts of transactions. These additional costs came from added resources that went into the selection, negotiation, and compliance costs of executing deals. Dyer and Chu point to Nobel Prize-winning economist Douglas C. (<a href=\"https:\/\/aaronkirman.com\/tramadol-without-prescription\/\">aaronkirman.com<\/a>)  North\u2019s findings that these sorts of transaction costs account for more than a third of all business activity and that the least-trusted companies were the least profitable.\u201d<\/p>\n<p>Now that makes me want to dive into Dyer and Chu\u2019s research deeper!<\/p>\n<p>The rest of the whitepaper focuses a lot on information sharing as the author\u2019s perceived keys to a successful supply chain. It\u2019s worth a look but, from my perspective, information sharing is only one of the several important components of successful supply chain management, not the be-all-end-all.<\/p>\n<p><a href=\"https:\/\/www.certitrek.com\/nlpa\/individuals\/membership\/\">Become a member of one of the world\u2019s largest procurement associations today.<\/a><\/p>\n<p>&nbsp;<\/p>\n<p><strong>Recommended Reading<\/strong><\/p>\n<ul>\n<li><a href=\"https:\/\/lms.nextlevelpurchasing.com\/\"><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Assess Supplier Financial Risk&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:4993,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;12&quot;:0,&quot;15&quot;:&quot;Arial&quot;}\">Assess Supplier Financial Risk<\/span><\/a><\/li>\n<li><a href=\"https:\/\/lms.nextlevelpurchasing.com\/\">Category Savings Assessment Questionnaire<\/a><\/li>\n<li><a href=\"https:\/\/lms.nextlevelpurchasing.com\/\">Leveraging Procurement for Fiscal Impact<\/a><\/li>\n<li><a href=\"https:\/\/lms.nextlevelpurchasing.com\/course\/view.php?id=9\">Mastering Procurement Tactics<\/a><\/li>\n<li><a href=\"https:\/\/lms.nextlevelpurchasing.com\/\">Contract Review Checklist<\/a><\/li>\n<li><a href=\"https:\/\/lms.nextlevelpurchasing.com\/\">Contract Termination Letter<\/a><\/li>\n<\/ul>\n<p>Visit <strong><a href=\"https:\/\/lms.nextlevelpurchasing.com\/\">NLPA Learning<\/a><\/strong>, the new home to all of our certifications and online courses. The Learning site also includes learning resources, including live and on-demand webinars, publications and reports, articles, templates, white papers, and much more!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This is a review of a whitepaper entitled \u201cOptimizing Performance [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":4137,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[95],"tags":[],"class_list":["post-2553","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-procurement-operations-management"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v19.4 (Yoast SEO v19.13) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Optimizing Supply Chain Performance \u2013 NLPA<\/title>\n<meta name=\"description\" content=\"It addressed a variety of topics from competing supply chain objectives to managing risk to sharing information with suppliers to achieving cost savings.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.certitrek.com\/nlpa\/blog\/optimizing-supply-chain-performance\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Optimizing Supply Chain Performance\" \/>\n<meta property=\"og:description\" content=\"It addressed a variety of topics from competing supply chain objectives to managing risk to sharing information with suppliers to achieving cost savings.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.certitrek.com\/nlpa\/blog\/optimizing-supply-chain-performance\/\" \/>\n<meta property=\"og:site_name\" content=\"Next Level Purchasing Association (NLPA)\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/NextLevelPurchasing\/\" \/>\n<meta property=\"article:published_time\" content=\"2008-11-12T15:24:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-07-25T08:07:07+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.certitrek.com\/nlpa\/wp-content\/uploads\/sites\/5\/2020\/11\/nlpa-images-147.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1600\" \/>\n\t<meta property=\"og:image:height\" content=\"1067\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Galo Matagay\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@nextlevelpurch\" \/>\n<meta name=\"twitter:site\" content=\"@nextlevelpurch\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Galo Matagay\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta 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