Supply chain dimensions
The goal of this section is to identify how your company's current supply chain capabilities rank across twelve key dimensions. Your responses will be used to help understand your level of coherence and identify areas in which to enhance your supply chain capabilities. Keep in mind that these responses refer to all levels of your organization (e.g., senior executive, management, shop-floor).
2. Please check the description that is the most closely aligned to your current supply chain capabilities.
Capability Levels
Minimal Capability
Average Capability
Best-in-Class Capability
Go to Market Strategy
Bring products and services to market quickly, reacting to changes in demand patterns and/or offering the appropriate portfolio of methods to efficiently reach the target market segment.
Example metrics: profit to serve, percentage lift in reach, sales.
Launch capabilities allow products to reach most consumers in reasonable time frames; cost, efficiency, and speed are not critical components and response to demand variation is slow.
Product reach, cost efficiency, and availability provide neither a competitive advantage nor disadvantage in the market. Go-to-market strategy models supports most needs, though not always efficiently.
There is an optimal market entry and go-to-market strategy for each particular launch; this minimizes total delivered cost to serve and helps drive sales.
not applicable
Product Launch and Life Cycle Management
Proactive life cycle management means that new products/models are consistently launched to realize “first mover” advantage, even if it involves cannibalizing sales.
Example metrics: average product development time (days from idea to launch), average product life cycle (days from launch to obsolescence).
Products often have extended lives or shelf time and reach the market at the peak or after the peak of consumer demand. Portfolio consists of new products and cash cows.
All steps of the life cycle are set to align with peak customer demand. New products are developed, but being “cutting edge” is not essential.
Multiple new models/versions are constantly under develop-
ment. New products may cannibalize potential sales of previous versions.
not applicable
Complexity Management
Active stock keeping unit (SKU) and service management. Manage product designs and service offerings to streamline processes/materials and minimize production complexity.
Example metrics: monthly net change in number of active SKUs (raw materials and finished goods) as a percentage of revenue growth, number of tools/techniques required to manufacture/offer products and services as a percentage of revenue growth.
Unintentionally carry a portfolio of specialized products and services that may or may not be frequently ordered. Lack a proactive SKU management program, often coupled with existence of separate/over-
lapping production processes.
SKU and service management require a manageable level of effort/man-hours but do not affect productivity. Production process synergies are regularly evaluated.
SKU and service manage-
ment are constant areas of review. Combining/limiting SKU proliferations (along with limiting production processes) is a top concern.
not applicable
Process Technology Choices
Invest in the latest information and manufacturing technology to improve overall supply chain process efficiency and effectiveness (e.g., SAP, Oracle, and manufacturing/production software).
Example metrics: rework as a percentage of total output, yield percentage, year-over-year (YOY) labor cost reduction.
Information, manufacturing, and operations technology provide basic functionality to run a business. Errors and breakdowns from technology and processing choices result in low yield and high rework, thereby increasing costs.
Technology capabilities meet minimum business needs, but opportunities to enhance automation and sophistication of systems exist.
Create excellence in singular or multiple process(es); investments in technology drive excellence, consistent IT, and manufacturing processes, maximizing efficiency, functionality, and system usability.
not applicable
Make-Versus-Buy Assessment
Regularly review production capabilities and assess whether in-house or external manufacturing is optimal.
Example metrics: return on investment cost (ROIC), time between sourcing reviews.
In-house production processes are well established; alternatives are not regularly assessed.
Outsourcing is an option that is regularly considered in production planning.
Operational efficiency is constantly under evaluation in order to identify the optimal production/sourcing mix; sour-
cing tools and processes are in place to identify alternatives.
not applicable
Manufacturing Footprint
Strategically design manufacturing footprint to complement most important markets, maximize serviceability, and minimize costs.
Example metrics: manufacturing cost per unit, logistics cost per unit, quality scores by location, asset utilization.
Manufacturing sites are regularly assessed with an eye to efficiency and effective customer service. Service areas are reconfigured to adjust production levels and distribution volumes in favor of the most cost-advantaged plants.
Manufacturing sites have recently been evaluated considering proximity to consumer demand and minimal exposure to logistical risk.
Manufacturing facilities have been located in their current geographies for an extended period of time and the footprint is not reviewed regularly.
not applicable
Distribution Network
Build/utilize a distribution network that maximizes delivery and inventory movement efficiencies, offering speed to market advantage and/or flexibility.
Example metrics: order/delivery cycle times, service level issues.
Utilize a limited set of methods to distribute products, limiting opportunity for customization. Speed to market is not a competitive advantage.
Product flow/efficiency is regularly evaluated and distribution guidelines provide timely responses to market needs. Distribution network allows for reconfigurations that cater to infrequent demand variations.
Well-established policies mean product flows and inventory levels are under constant review, balancing stock across the network. Multiple distribution channels are typically used and are highly flexible to consumer demand.
not applicable
Systemic Planning and Replenishment
Develop internal Sales and Operations Planning (S&OP) policies to facilitate structured production planning and inventory/material replenishment processes.
Example metrics: internal/external order fill rate, forecast error/accuracy.
Planning and replenishment methods are not consistent across the network. Stock-outs are more frequent than anticipated.
Production and demand/
supply planning methods are in place and replenish inventory in a timely manner.
Have the capability to under-
stand, manage, and shape consumer/customer demand and drive the supply chain based on segmented or tailored supply setup (e.g., tailored business streams).
not applicable
Strategic Sourcing
Place concentrated emphasis on identifying and forming strategic relationships with optimal suppliers to stabilize production processes.
Example metrics: supplier performance (including on-time, right quantity, right condition).
Vendor performance is not regularly evaluated. Vendor lists are frequently in flux or non-existent.
Vendor policies and procedures are fairly established and vendors periodically undergo cost/performance assessments.
Sourcing is value driven; superior sourcing tools and processes, such as cross-functional bill of materials (BOM) and non-product related (NPR) sourcing, effectively manage relationships with outsourced providers.
not applicable
Continuous Improvement
Dedicate considerable time and money to maximize operations productivity and efficiency, including efforts such as Lean and Six Sigma.
Example metrics: production error rate, average unit cost, yield, rework as a percentage of total production.
Operations efficiency is inconsistently tracked with a lack of accountability or consequences.
Operations are closely monitored to track efficiency, but significant manpower or monetary investments have not been made in this area.
Continuous improvement capabilities are embedded within operations, focused on quality management, process control, and reducing waste.
not applicable
Network Policies
Strategically develop external distribution and logistics policies and metrics, focused on improving efficiency/boosting service levels.
Example metrics: order/delivery cycle time, customer satisfaction scores.
Impaired product flow through the network impacts customer service levels and profitability.
Distribution policies are in place to track product move-
ment, especially by outside vendors to ensure quality and timely service.
Products are efficiently moved internally, reaching the customer in an expedited manner. This high service level is a market differentiator.
not applicable
Process Effectiveness and Execution
Consistently monitor overall supply chain processes for effectiveness/contribution-added and execution to plan, including costs-to-serve, risk vs. growth trade-off, and sustainability.
Example metrics: overall equipment effectiveness (OEE), availability, quality losses.
Performance measures are established but are not evaluated in a structured manner throughout the network.
Structured business metrics are in place to monitor key business factors and identify potential areas to improve supply chain processes; however, actions are not consistently taken to make improvements.
Highly detailed metrics, key performance indicators (KPI), and scorecards are utilized to regularly evaluate and adjust business performance, identify areas for improvement, and minimize exposure to risk.
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