Thinking of benchmarking your supply chain efficiency in 2022? Here are a few quick tips to get you started.
We are still early into 2022, and you are probably dealing with a long list of supply chain process or efficiency improvement goals for the year. An efficient supply chain involves continuous monitoring and process improvement to ensure that your customers are delighted and that you stay abreast with changing market conditions.
If you are looking to improve your supply chain management systems in 2022, you most likely have asked the common question: How do I benchmark my current efficiency?
This is a good starting point for anyone looking to add functionality or identify loopholes within current processes. There is no single, perfect method that meets all needs.
However, the good news is supply chain assessments have proven to be advantageous for many businesses.
The Starting Point for Benchmarking Supply Chain Efficiency
Supply chain efficiency is primarily determined by the planning and decision-making processes. These affect how well a company can react to changing environments and determine how well resources are allocated to meet business goals. Planning processes are best assessed and compared against five dimensions:
- Transactional integrity
- Integration
- Intelligence/optimization
- Acceptance
- Data visibility
Transactional integrity: This refers to how well the transactions within the ERP system represent the current state. For example, if the transactions are “batched” (entered once a day or less frequently), the system does not have the same level of integrity as an ERP system where transactions are updated in real-time or near real-time.
Integration: The level of integration within planning processes is determined by looking at the extent of the supply chain that is simultaneously planned. Simultaneous planning of purchasing, transportation, inventory, and manufacturing indicates a high level of integration.
Intelligence/optimization: This refers to whether the planning options are quantified. The greater the depth and breadth of the quantitative framework used for planning, the higher the level of optimization. This does not refer to the use of any specific computational methods.
Acceptance: Acceptance of supply chain planning refers to the extent to which planning processes are institutionalized or standardized.
Data visibility: This type of assessment refers to the extent to which the data is available and usable by supply chain planners. A high degree of data visibility indicates that schedules, inventory levels, future plans, and costs are readily available and accessible.
In the end, depending on the business involved, an assessment may focus on one or two of the areas listed above. It’s also essential to note that some areas of improvement are not mutually exclusive. For instance, you may not be able to achieve your data visibility goals if your systems are not integrated or if you don’t have the right data integrity processes in place. Arkieva can help you move forward. For nearly 30 years, we have assessed hundreds of supply chains across all industries. Contact us for a benchmarking of your capabilities.
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