A variety of hot issues in the pharmaceutical industry are out there to tackle. But a big one that will continue to see a great deal of discussion, proposals and change in 2012 is the integrity of drugs and medical devices. Anti-counterfeiting, quality control, and security have traditionally been major priorities in this industry. A major part of this effort is track and trace, or an industry-wide effort to capture the pedigree of a drug or medical device from its production onward. Track and trace operations help reduce counterfeiting and other similar issues.

Track and trace initiatives are already making headlines this year in the US. According to the Pharma Times Online, new standards for track and trace in imports, anti-counterfeiting & anti-theft operations, and new best practices are the four main areas are being championed by the US Pharmacopeial Convention (USP).

While there are still disagreements about which standards and best practices are the right ones in this industry, the USP points out there are incentives for companies to come to an agreement. 2012 will be a key year in moving these proposals to becoming the standard for safer products in this industry.

For more on what to expect in the pharmaceutical and medical products industry in 2012, see this list of priorities for the year written by experts at Tompkins.

GoGoGo!

Jim Tompkins

Photo Credit:  John Pavelka 

Summertime is here, and along with warm weather and vacation, this tends to be the time when everyone is out and about enjoying the great outdoors. I’ve noticed people heading to the beach or hiking in the mountains – since in North Carolina, we have both!

With the nice weather, I’ve also noticed more motorcycles on the road. Most of the time people are wearing helmets and other protective gear. It is probably a lot hotter and maybe a little more restrictive and uncomfortable to wear all of that, but the consequences of wrecking without wearing that gear are far worse than a little discomfort.

Summer has also brought with it some pretty high expectations and excitement for the end of the recession and a return to growth and prosperity. Companies that maintained their talent and strategy while cutting all other costs were able to weather the recession. It’s now time for these organizations to take advantage of the opportunities available for overcoming the competition.

Keep in mind that it’s easy to fall into the trap of moving much too fast – and actually, reckless speed without a plan or understanding the great change that took place because of the recession can be fatal. Think of it as riding your motorcycle down a highway at 70 MPH without a helmet – it might be convenient at the time, but you’re taking a big risk. 

Avoid this recklessness and think ahead instead. Here are three mistakes to avoid when developing a profitable growth plan in the post-recession market:

1. Not taking the right amount of time and care to understand your current position and your customers’ desires.

2. Don’t focus too much on future profitable growth so that you miss existing opportunities. Instead, achieve goals over time. Otherwise, you risk moving much too fast for your stakeholders and growth plan to adjust, and expectations can’t be met.

3. Not allowing for the time and planning needed to properly fund new initiatives with the capital required, which must flow from other profit sources that should first be cultivated – before jumping in without the capital needs to fund your profitable growth.

I cover a lot more details on how to return to profitable growth in this installment of the Global Supply Chain Podcast series. It’s the first of 10 podcasts I’ll be publishing over the next few months on the topic of profitable growth. 

You can listen to it here or read the text transcript: http://www.tompkinsinc.com/podcast/transcripts/6-15-10_podcast44-profitable-growth-part-1.asp

Also, be sure to subscribe to the podcast to receive each one as it becomes available on the first and third Tuesday of every month. http://www.tompkinsinc.com/podcast/subscribe.asp

Go!Go!Go!

Jim 

Flash back 10 or 15 years: You are a smart, business-savvy supply chain manager who has just been told that your organization has made a strategic acquisition. Great, wonderful! You are excited to be involved in this growth.

Then reality sets in: All the big warehouse and distribution, logistics, material handling, systems and operations decisions have already been made. You are asked to integrate the two company’s supply chains as quickly and cheaply as possible and focus only on cost reduction efforts. Now you are not so excited.

But that was yesterday’s reality, when M&A was at its peak and the significance of looking at supply chain integration upfront was sorely undervalued. Today, there is a different perspective on M&A evaluations as company leaders have learned to embrace the advantages of supply chain agility, global sourcing and supplier relations.

I really like this trend of CEOs, CFOs and CIOs finally understanding what it takes to succeed in today’s global marketplace – that it is no longer company vs. company, but instead it is supply chain vs. supply chain. The one with the best supply chain comes out on top!

So merger and acquisitions strategy activity is heating up in this recovering economy, and this time around, it is less about reducing costs and more about growth in revenue. Supply chain executives need to be prepared to help set the tone for business combinations early in the process – armed with proven best practices for supply chain integration. Learn to view integration of supply chains and the distribution network as an opportunity to know the entire company better and add value to the overall organization.

For the full picture on supply chain integration, read the latest from Gene Tyndall, EVP, Global Supply Chain Services at Tompkins Associates. Integrating Supply Chains from Business Combinations: Principles and Best Practices of Mergers and Acquisitions provides fresh opportunities to promote sustainable business value during integration.

I would be very interested in your thoughts on how supply chain integration during M&A has changed and how you think it will change in the future.

Go!Go!Go!

Jim

More Resources 

Integrating Supply Chains from Business Combinations: Principles and Best Practices of Mergers and Acquisitions

Warning: Mergers and Acquisitions May Be Hazardous to Your Company's Health 

More on Merger and Acquisition Strategic Planning from Tompkins Associates 

Are You an M&A Sinner? Repent and Heed the Lessons Learned!

Caught Between the Tiger and the Dragon, a business novel about global business and mergers and acquisitions

Download the Executive Briefing: Sales, Inventory and Operations Planning: Crossing Organizational Boundaries

 

 

Photo Credit: Lyfetime

You’ve seen the opinions of Chris Ferrell, transportation expert and Associate Director of Tompkins Supply Chain Consortium, a couple of times already on this blog. Today, he shares his insight into some floundering international transportation capacity issues.

--- Jim

I ran into my good friend David Croft at a restaurant last week. David purchases global freight for CHEP (the blue pallet guys) to the tune of about 25,000 TEUs across 46 countries. He was having lunch with two reps from one of the major NVOCCs (or, Non-Vessel Operating Common Carrier – a consolidator or freight forwarded that doesn’t own its ships) and discussing the recent capacity crunch that international shippers have been experiencing.

He invited me to sit down and, after the obligatory discussion of families and football, we got down to business – specifically talking about the state of the steamship industry.

Well, as you can imagine, the four of us had an exciting discussion. Here is a top level summary of our conversation, which I think you will find very enlightening.

There are a lot of RFQs going out right now due to panic over the lack of capacity, which is being further complicated by shippers' renewed dedication to inventory management, specifically to holding inventory levels down – both attributed to fall out from The Great Recession. It was the consensus that this panic has been created by the steamship industry.

But unless you're the largest of the large among shippers, you're probably better off waiting to lock in your capacity. The current environment is being fueled by last year's rate crash that made it more economical for the steamship lines to simply dock their vessels and has been further exacerbated by the steamship lines' motivation to recoup some of 2009's losses.

So, with the big retailers conducting their holiday season RFQs right now, one of two outcomes is likely:

1. Either they make enough volume commitments to revive the steamship lines’ capacity, and in turn, rates will stabilize and shippers will benefit in both price and commitment; or

 

2. A combination of conservative projections and tight inventory policies will compel the steamships to keep capacity sidelined, and space commitments will continue to take place on a near transactional basis, with the spot going to the highest bidder.

But since the latter is pretty much what's already happening, there's no major risk to waiting and seeing how things play out.

At this point, shippers need to be sharpening their pencils on their forecasts and volume commitments and be prepared to send out an information-rich, commitment-laden RFQ in late May when the big retailers are done, and everybody understands what this year's rules are going to be.

When the Supply Chain Consortium published its members-only International Transportation Report earlier this year, many of the same industry weaknesses were identified, but we saw the steamship lines putting capacity back into play at the first sign of volume.

These industry experts I spoke with, who interact with and depend on steamships on a daily basis, have made me more cautious now. I still believe capacity is coming back, but it will be a controlled release, rather than an opening of the flood gates. Even if the capacity doesn't return, the experts were able to convince me that there is little risk of things getting worse than they already are.

But that's my opinion, what do you think?

-- Chris

More Resources:

Tompkins Supply Chain Consortium, www.supplychainconsortium.com - the Supply Chain Benchmarking and Best Practices Forum

 

Transportation Optimization

 

Ports and Maritime Freight

 

Supply Chain Logistics

 

OK, it’s not exactly your father’s Oldsmobile, but we have recently discovered that companies with transportation sustainability initiatives are using many of the same old tools to gauge their success.

The Supply Chain Consortium’s new Transportation Sustainability Report found that a number of companies are using ROI or cost-payback analysis and life-cycle assessment – which are commonly used to measure capital expenditures – to evaluate their environmental initiatives.

These tried-and-true methodologies are not nearly as cutting-edge as some of the initiatives they’re measuring, so therefore they tend to be a very conservative predictor of success. Encompassing the total cost savings of a long-term sustainability initiative can be quite challenging. Consider using some new tools and keep the Oldsmobile in the garage.

Other green business tools used by companies we surveyed include environmental reporting and certification programs, environmental management systems, eco-mapping, and environmental accounting.

Overall, having sustainability initiatives within your organization is a powerful offensive strategy, whether you are measuring cost benefits, environmental benefits, or company benefits.

For more information on what other companies are doing and how you can improve your transportation sustainability initiative, check out the Transportation Sustainability Report. You can also listen to a recent podcast on the topic.

Go!Go!Go!

Jim

You’ve had the secret weapon to beating the Great Recession all along. What you need to do now is remove it from hiding, read the user manual, and customize it to your industry sector and company.

In my last blog post, I talked about why we are on the uphill climb to economic recovery. Now I want to talk about developing and using your secret weapon – a Comeback Plan. This should be an actual concrete (while flexible) plan and you need to launch it now – even if you believe that your company’s recovery is a year away. Any delays now can have a major and lasting long-term effect on your organization’s health.

In short, think about the current marketplace, your competition, what you are going to do when the market returns to "normal," how your business is currently performing, and build a plan that will help your company prosper when the time is right.

If you pull this plan out of your arsenal at the right moment, you will blow away your competition and become a leading contender in your industry sector.

The most successful Comeback Plan includes the "Five Steps to Recovery and Growth" (click to watch a video on this topic.) 

Step 1: Environmental Assessment:
Examine the impacts that the following factors are having and will have on your business. These are indicators of when your market will grow.

Step 2: Competitive Intelligence:
Know your competition. What have they done in response to the recession and what are they likely to do going forward? Have they hunkered down or have they raised the competitive bar? Think about how they will respond to what you do and vice versa. Understanding your competitors and staying ahead of their next move will put you in the lead.

Metaphorically speaking, keep in mind that if you are with a group of people in the woods and a bear starts chasing you, you don’t have to be faster than the bear; you just have to be faster than the slowest person. It pays to know what you are up against.

Step 3: Comeback Expectations:
The more you read and understand about the economic recovery, the more prepared you will be. Understand the timing and magnitude of your company’s Comeback from the recession, given marketplace demand and response from your competition. Know when your turning points are and what your recovery lead time and future volumes will be. Although forecasts are not entirely reliable, it’s good to have the full picture in mind when thinking about your company’s Comeback.

Step 4: Organizational Analysis:
This step is about knowing the capabilities of your organization and determining how your organization compares to others (click here to learn more about the process of benchmarking and best practices) performing the same processes. What process upgrades do you need to deploy in order to not only recover, but to also gain market share, grow and prosper? What are the process upgrades that you need to have in place after the recession to enhance customer satisfaction, increase capital efficiency, increase profitability and increase long-term shareholder value?

This is about knowing where you stand, and again, knowing how you compare to your competition. Take into account what you learned during the recession and employ a formal process of global supply chain best practices and benchmarking.

Step 5: Define a Comeback Plan:
After thinking through each of the previous four steps, it is time to create a list of process upgrades that need to occur to allow you to gain market share, grow and prosper. This may not be easy. Many times you will need to plan ahead for lead times of these implementations, and being too cautious or too slow as your organization begins to pull out of the recession could prove to be reckless.

Build and brandish your secret weapon now by creating your Comeback Plan before your competition gets wind of your mission. Keep your eye on the target and Go!Go!Go!

Jim

More on how to build your secret weapon:

Download the new Executive Briefing, The Great Comeback From the Recession: Your Company’s Secret Weapon – Create Your Plan, Reduce Future Risks and Pull Ahead of the Competition.

 

Watch video of a recent live presentation.

Watch for parts 3 and 4 of this Great Comeback blog series in the coming days.

Photo credit: Bogdan Suditu

At the recent Supply Chain Leadership Forum in Chicago, we had a great opportunity to survey executives from some of the world’s leading high-technology, retail, consumer products and pharmaceutical companies.

But what really makes this survey unique is that we asked attendees what questions they wanted answered – in other words, what keeps them up at night? What do they really want to know to be fully prepared to improve their supply chain planning? The survey was given real-time via Zarca Interactive, and the results were presented the next day in a forum general session.

The question topics ranged from demand variability to logistics network designs to sourcing and economic recovery. Basically, they covered many of the key components found in any supply chain strategy today. I want to share a few significant results with you now in hopes that it will shed light on your own organization’s goals and needs:

41% say they think the economy will turn around and "The Great Comeback" will occur in the second quarter of 2010. However, more than 90% indicate that they have not developed a significant Comeback Plan or the initiatives to carry it out. See the two graphs below for details. 

Half of respondents report that their companies are becoming more centralized toward a global supply chain structure, while 22% say there has been no change in their organizational structure to accommodate global demands.

50% say that their sourcing in Asia is moderate, and nearly 17% say their sourcing in Asia is significant. And by far, a majority (almost 70%) report that cost reduction is the main reason their company pursues Asian sourcing. More details in the graphs below.

These are interesting findings that give a broader view into global supply chains. How does your company stack up in these areas? Let me know when you think the economy will rebound, how you are handling global demands, and how much and why you are sourcing in Asia.

I will share more results of the Leadership Forum survey in a future post.

Go!Go!Go!

Jim

P.S. If you are interested in attending next year’s Supply Chain Leadership Forum, save the dates of August 31-September 1, 2010. Here’s the agenda we used for the 2009 forum, just an example of the range of topics and networking opportunities.

The 2009 Supply Chain Leadership Forum in Chicago was jam-packed with some great sessions and even greater opportunities to better understand the challenges facing executives today. I was really looking forward to the evening reception (great food and wine) and the dinner keynote, Charles Fishman.

Charles is a senior writer at Fast Company magazine and author of the national bestseller, The Wal-Mart Effect.

Even with a Target executive in the audience (and he sat the closest to the podium), Charles didn’t fail to entertain and educate the crowd. Whether you love or hate Wal-Mart or are somewhere in between, this is one man who knows his stuff on the mega-retailer. Having devoted years of his life to figuring out what makes this successful and controversial company tick, he can tell you the good, the bad, and the ugly.

While most of the country is aware of Wal-Mart’s influence on the retail world, it still amazes me to hear facts such as:

More than half of all Americans live within 5 miles of a Wal-Mart store

93% of American households shop at Wal-Mart at least once a year

While Wal-Mart may always be looking over their shoulder, they continue to raise the bar and set standards that the rest of the retail world has to live up to in order to compete. As most everyone has already heard, sustainability is their latest mandate.

Top-tier suppliers have until October 1 to complete a 15-question survey that will be used to evaluate the manufacturer’s sustainability efforts (the survey is public knowledge on Wal-Mart’s site)

This plan involves more than 100,000 suppliers globally

The goal is a labeling system that will provide a breakdown of the sustainability of each product

Charles closed with a challenge to all of us "supply chain superheroes" in the crowd. He challenged us to take a good hard look inside the day-to-day supply chain functions now and really assess where we’re headed. How can we step up and raise the bar?

While I don’t really consider myself a supply chain superhero, I’ll take that label any day if it means I’m making a difference in the supply chain world and get to wear a big colorful cape. But I’ll forgo the tights – some other superhero can take on that wardrobe challenge.

Go!Go!Go!

We kicked off the 2009 Supply Chain Leadership Forum in Chicago Monday night with a bang. What a great bunch of folks, and we’re having fun while tackling some tough issues! We are all strangely mesmerized by the innovative hand-dryers in the bathrooms at the InterContinental Hotel, but more on that later.

For those of you who aren’t familiar with the Leadership Forum, top supply chain executives from around the world come together to learn, network and gain solutions to issues in areas such as benchmarking, sourcing and trade management, core benchmarks, packaging, sustainability and technology. This year, more than 50 experts from 30 companies in retail, consumer products, food and beverage, pharmaceutical, high-tech and other industries are in attendance.

Monday night, I led an Executive Summit that began with the statement "Everyone needs a T-shirt that says ‘I survived the Great Recession of 2009.’" We all agreed that was true, as we dived deeper into the topic. Their feedback really supports what we have been saying all along about the economic recovery: You have to look at each sector individually and figure out when your industry has or will hit bottom.

Listening to the economic experts drone on and on about a macro recovery and how the recession will not be over until unemployment goes back up and the moon and stars align just perfectly is not going to help your organization grow and prosper. A strong Comeback Plan focuses on your company and your industry sector. Period.

Here are some of the best lessons that I have learned thus far from talking to attendees:

1) Beer is flat and soup is hot. Meaning that food in general – including soup, frozen pizzas and other inexpensive, eat-at-home cuisine – are doing well right now. Also, beer sales are holding their own. In fact, food and beverage really never tanked, although there have been channel and brand changes in response to the downturn. In addition, there has also been some "trading down" in this sector by consumers who are willing to settle for a less expensive or private label brand to save money.

 

2) Retaining talent is key regardless of budget cuts. More than ever, you need "the right strategy and the right people" to get things done.

 

3) An awesome realization – This is the first time we’ve experienced a recession under massive globalization. And what it has revealed is either a) we’ve gotten so lean that forecasting will have to get better in order to be of any value at all. We really need more base and accuracy measurements, or b) the new norm is that there is no norm, and it’s nearly impossible to make good forecasts today, or c) the truth is somewhere in the middle. We did all agree that companies need several different forecast scenarios for their individual Comeback Plans.

Here are some of the dumbest things businesses have done during the recession:

1) Stopped keeping track of their competitors and what they’re doing and started focusing inward, almost as if they are withdrawing into a fetal position. Wrong. This is the opposite of what companies should be doing.

 

2) Not "standing up on the hills." Failure to launch an effective Comeback Plan is like being in a bicycle race and forgetting that it is on the uphill that you need to stand up and really turn on the juice.

 

3) Cutting the people you will need later – not retaining talent. This was mentioned more than a few times.

Here are some of the smartest things that businesses have done during the recession:

1) Using the downturn as an opportunity to acquire other companies at a low cost in an environment in which private equity firms are uncharacteristically quiet right now.

 

2) Learning from other countries: look at what works there and see if it will work for your organization. Not everything will fit, but a lot of it promises to be very beneficial.

 

3) Stepping up benchmarking to understand where you need the most help, or the most appropriate time "to stand up on your bike."

 

4) Inventory: reducing levels can be smart or dumb – depends on how you optimize other areas in your network and how it affects customer expectations.

 

5) Implementing more frequent network design reviews.

Hand-dryer in the bathroom (I know you were waiting for this one)

There’s a really cool, new-fangled Dyson Airblade hand-dryer in the bathrooms at the InterContinental Chicago O’Hare hotel. Actually, I just learned that it has been around since 2007, but it is new to the majority of our attendees and seems to amaze our staff. Why am I mentioning this? Not sure, other than it is a really cool device, we have photos of it, and it’s just another positive element in the whole Leadership Forum experience.

Look for more later in the week on how the remainder of the forum went and the results of our on-site, real-time survey that attendees are filling out today and tomorrow.

With very dry hands!

Jim

What’s the first thing you think about when someone says the word "core"? Maybe you think about an apple core. Maybe you think about the core of the Earth. Or, maybe you think about the core of your body, which sometimes bulges and could use some work in the gym.

Well, keep that last thought in mind when you are thinking about supply chain core benchmarks. Just as it is important to exercise the core of your body, it is also important to shape up the core processes of your supply chain.

However, as most doctors and nutrition experts say, "it’s not just about trimming the excess fat; it’s about being healthy." As a supply chain expert, I say the same thing. You have to know the best [strategic] plan and [action] routine that fits you. That’s what core supply chain benchmarks are all about.

The Supply Chain Consortium recently published its annual members-only report, which focuses on the benchmarks and best practices of core supply chain practices and processes – financial, supply chain planning, sourcing, transportation, distribution, manufacturing and technology. Click here to learn more about joining for free and other membership opportunities.

What the Consortium found was no big surprise – supply chain costs are steadily increasing over time, despite concerted efforts by companies to hold the line. All companies surveyed had varying views about how important the metric of supply chain cost as a percentage of revenue is to performance, but all agree that it must take some priority. See how various industries rate supply chain cost in the chart below.

As Bruce Tompkins, Executive Director of the Consortium says in the report, "The point of benchmarking is to use data to help identify specific, actionable tactics for improvements which align with your company’s goals."

So true! That is, you first need to know your company’s goals. Then, you need to know where your company stands compared to others in the same industry. You can accomplish this by using benchmark data to help you discover which areas need improvement and learning what practices top-performing companies are utilizing to be successful. Once you have all this in place, implement a plan that best fits the needs of your company.

It all starts with the basics. Think of core benchmarks as being at the center of your supply chain universe. Embrace these critically important measures of success and watch what happens with your "waste" line. You will likely find some areas of your supply chain where you can cut costs and improve performance.

So make sure your supply chain is fit and healthy. Now I think I will go to the gym and try to work on my own core.

Go!Go!Go!

Jim

I asked Bruce Tompkins, Executive Director of the Supply Chain Consortium, to update readers on balancing supply and demand in the age of super-charged supply chains. Bruce is an expert in lean manufacturing, benchmarking and best practices, logistics, and being my younger brother (although he would sometimes like to omit this last credit.)

- Jim

Balancing supply and demand is a pretty interesting proposition, depending on who you are and what you do. It might also conjure up images of pain and suffering for those who are held responsible for actually achieving some kind of balance in their supply chains.

The idea that supply, which is now coming from almost anywhere in the world, and demand, which can be immensely variable week-to-week and day-to-day, could possibly be in sync leaves me amazed, amused and a bit confused. Here is what I know about where we are today on this issue, and of course, it raises a few more questions:

We have come a long way with technology to provide visibility into our suppliers’ plants, but is that enough?

There are increased activities within companies to improve relationships with all supply chain partners, and that’s great!

We have implemented better forecasting methods and tools to predict events and promotion impacts, but how much has that helped?

We have created demand signaling systems and repositories (DSR) and POS tools to get closer and closer to actual customer demand.

We have implemented VMI and other stocking and replenishment processes to tighten and close the loop.

New product introduction processes at many companies have been enhanced and the planning greatly improved to keep supply and demand better aligned as new products hit the market.

Many companies have reorganized and then reorganized again, trying to find the best way to make the supply/demand equation more effective.

The reality of the situation appears to be that we have unprecedented levels of variability in supply due to longer and more complex supply chains, and we have an economy that is creating unprecedented levels of variability in consumer demand. Wow, so this could be here to stay!

If you think I’m now going to give you the silver bullet that will make all of this go away and miraculously return your supply chain to the way it was in the good ol’ days, I’m sorry. There is no silver bullet. The path forward is to keep trying and trying and trying to take variability out of the supply side and demand side of the equation. Technology and tools are going to help, better processes and practices are essential, improved relationships are a must, and an organization that helps bring supply and demand closer is also key.

If you have insight into this topic, I would love to hear from you.

This key aspect in planning for The Great Comeback is like the whole ball of wax. Organizational Analysis involves a total review of all internal processes to define a company’s strengths and weaknesses, both during the recession, as well as while on the road to recovery, and on to growth and prosperity.

There are several major processes within an organization that require this type of analysis that will eventually lead to a Comeback Plan. My expertise, and thus the focus herein, lies in the supply chain processes: Supply Chain Design – Buy – Make – Move – Store – Sell.

Major processes requiring review during the Organizational Analysis include:

1) Supply Chain Design: Marketing design, manufacturing design, supply design, organizational design and network design. Depending upon the scope and complexity of your organization, the time to plan organizational enhancement will vary from 1 month to 8 months, and implementation time can vary from 2 months to over 2 years.

2) Buy: Strategic sourcing, establishing joint ventures, and merger and acquisitions. Planning time: 1 to 6 months and implementation time: 1 month to 1 year.

3) Make: Manufacturing strategic master plan for facility upgrades, new existing facilities or new non-existing facilities, as well as outsourcing of manufacturing. Planning time: 2-6 months and implementation time: 4 months to 2 years.

4) Move: Domestic freight bid, global freight bid, create core carrier program, transportation transformation, outsource transportation and transform from Move-Store into more of a Flow Model via crossdocking. Planning time: 1-6 months and implementation time: 2 months to 1 year.

5) Sell: Demand planning, sales and operations planning, inventory management and reverse logistics. Planning time: 2-4 months and implementation time: 1 month to 8 months.

6) In addition, to support these processes, the related supply chain technology needs to be reviewed to include: warehouse control system upgrade/replacement, manufacturing control system upgrade/replacement, WMS, TMS, supply chain visibility, demand planning, forecasting, MES and ERP. Planning time: 1-4 months and implementation time: 2 months to 2 years.

The Organizational Analysis should answer questions such as:

Costs: Are my supply chain costs competitive?

Operations: How do my operating characteristics compare to my peers (e.g., freight terms, modes, contract relationships, etc.)? What operating characteristics are found most often in the best performing supply chains?

Performance Measurement: How do my peers measure supply chain performance? Where do they stand in developing measurement processes? What are their goals? Where do they stand in achieving those goals?

Organization: How does my organization structure compare to my peers? Are some organization structures more effective than others? Where is control for key functions vested?

Collaboration: How much real collaboration is there today with suppliers and LSPs? What is being done on performance scorecards, incentive programs and innovative contractual relationships?

Outsourcing: Where and why do my peers use outsourcing? Does outsourcing result in lower overall costs and better service?

Technology: What technologies are my peers using in their supply chain operations? What is working and what is not? Is there a correlation between the use of technology and the supply chain effectiveness? What are the near-term priorities in technology?

Value: How do my peers demonstrate the contribution their operation is making toward overall corporate goals?

Security: What are my peers doing on security? Is there something I should be doing that I am not?

Supply Chain Network: How does the design of my inbound supply chain network compare to my peers? Is my network more or less efficient? More or less reliable?

Certainly, to do this level of analysis well, a formal process of Benchmarking and Best Practices is highly recommended. The process supported by Tompkins Associates is the Supply Chain Consortium.

The application of the Benchmarking and Best Practices resources of the Supply Chain Consortium to your Organizational Analysis will:

Allow you to measure your performance against best-in-class companies and identify improvement opportunities.

 

Help you understand how your operating practices compare to your competition and impact your ability to gain competitive advantage.

 

Broaden the thinking of your management team to include issues beyond their immediate responsibilities.

 

Provide breakthrough insights by looking across performance measures, processes, roles, responsibilities, goals, vendor and customer relationships and infrastructure requirements.

 

Define scorecards with key performance indicators, data collection processes, goals and reporting formats to track supplier, carrier and third-party service provider performance.

 

Help prioritize improvement opportunities and build consensus behind the opportunities that are most important for you to address while on the road to recovery and onto growth and prosperity.

 

The conclusions to be reached from the Benchmarking and Best Practices review will be a list of potential process upgrades.

In addition to the Benchmarking and Best Practices potential process upgrades, leadership needs to encourage the organization to proactively develop innovations that will facilitate the organization’s comeback. These innovations can then be added to the list of potential process upgrades.

For each potential process upgrade, a cost/benefit analysis and a determination of lead time will need to be established. The output of the Organizational Analysis includes tabulation of the scope, benefits, implementation cost and lead time, and projected savings for each process upgrade.

This tabulation will feed the fifth and final step of developing your Comeback Plan to be presented in the next blog post. You should be well on your way to your Great Comeback, but keep reading.

Go!Go!Go!

Jim