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August 27, 2009

What Metrics and Data Can do For Your Supply Chain

Today, companies that manufacture are all about saving money and working on a “just in time” inventory. No one wants to have to do massive stock rotations of raw materials or discount depreciating inventory as well as pay the money it takes to manufacture, warehouse, insure, and manage that inventory. “Just in time” means that there is products to fill orders and not too much above and beyond that.

Too much inventory and you risk not being able to move it as well as having to count it at the end of each fiscal quarter and perhaps you'll have to discount it substantially as well --- when it doesn't sell.

Many companies measure their procurement and merchandising professionals on their number of inventory turns (equal to the number of times inventory is replenished annually) so analyzing sales data versus inventory reports can help a buyer determine how much material to keep in stock. This can drive an effective production schedule. The wrong number equates to either too much inventory sitting around collecting dust or at the opposite end of the spectrum, it leads to backorders and dissatisfied customers who may cancel orders in favor of a competitor who does have available stock.

How do you balance it? Data. Reporting can help you work on a “just in time” basis by telling you how much materials to buy and what production schedule you need to keep. Analyzing these trends with real time reporting tools can help you manage inventory levels and keep costs down. Variances in business can mean many things such as changes to expected volumes, changes to the cost of raw materials, etcetera. Knowledge is power, especially if you have access to it on a timely basis!

What other metrics can be used to help you measure your supply chain efficiency?

You need to know things like:

• How much money you spend on restocking fees and depreciation
• How long it takes to process an order and where delays come from
• How many misshipments happen per supplier
• What your shipment accuracy ratio is (to your end customer)

This isn't an exhaustive list but this shows you that various pieces of information are an essential part of effective supply chain management and process improvements.

How can you use this information?

Gathering data to measure your supply chain's effectiveness can help you to plan and manage your inventory and production schedule. It can also help you determine which supplier relationships are working best for you. This can be very helpful information in putting together supplier score cards so that you can ensure you have the best relationships set up. The right data can help you streamline your own processes and improve your internal policies and procedures because you can see where specific areas could be improved upon and generate accurate score cards and reports quickly.

How can you get this information?

Tracking various aspects of inventory management and sales management as well as customer satisfaction can help you put information together that is very telling about the state of your supply chain and your business overall. Today there are business intelligence solutions that can gather information from multiple sources that can enable you to get a very descriptive view of the state of your supply chain. This can help you to pinpoint exactly where problems and bottlenecks occur so you can have them fixed.

Oco Inc. can work with you in a matter of several weeks to implement a customized solution that helps you analysing usable data. This data can be used to help you figure out where there are chinks in your supply chain as well as which supplier partnerships might require some fine-tuning. Data can help you save costs and sell more products to your customers. A supplier score card could help your suppliers pull up their socks and your being able to provide your customers with data that shows how effective your order flow is, you can strengthen your customer relationships as well.

Want to learn more about managing your suppliers, downloading Peer-to-Peer Evaluations, and interact online with B2B professionals from Fortune 500 companies? Visit The Supplier Evaluations Community TODAY!

Posted by Sasha Grebenyuk at 8:45 AM | Comments (0)

August 26, 2009

Benefit from Online B2B Communities

There are a lot of potential links in a supply chain and effective supply chain management requires that people involved in overseeing that supply chain make the right decisions. The wrong decisions can be costly and make business operations slow to a crawl. This exposes companies to loss both from a profit perspective and from the perspective of market share and competitiveness as well.

Today, companies want to be sure that their chain runs smoothly, profitably, and professionally and online B2B communities can help you ensure that happens. How? You can share information that helps you make the right business decisions. Sharing business intelligence is a great way to do business and results in a symbiotic relationship with peers and competitors in your industry.

Improve your supply chain

Supply chain management consists of many different areas. Wouldn't a knowledge base of information and a place to share ideas and experiences help you? There are a lot of ways that you can share information to help your business run more smoothly. Here are some ways you could benefit:

• Share information about suppliers in your industry. Imagine being able to read a supplier score card from others in your industry before taking a chance with them? This could tell you a lot about doing business with them before you make a decision.

• Find suppliers that are suited to your business model. Instead of searching aimlessly, browsing a directory by category and with peer evaluations could save you time and money as well as help you find the right supplier for your needs.

• Submit your own evaluations and share information based on your own expertise experience and expertise

By sharing market intelligence with others, the world of supply chain management improves as a whole. Companies that share information hold suppliers accountable for their actions and this increases the level of accountability out there. If suppliers know that they're being measured and discussed in public forums accessible by their clients and prospective customers, this will foster a business landscape that strives to continually improve upon itself and that will help you and your business directly.

Supply chain communities

The Supplier Evaluations community is an example of a place that supply chain professionals can use as part of their selection process. As the information age progresses, sharing information instead of hoarding it is an emerging trend that's expected to continue.

Instead of choosing to just send out an RFP or RFQ and wait for suppliers to woo you with their promises, a community where peers and even competitors share information could help you narrow your list of choices down by learning about the reality of how each potential supplier is doing with their past and existing customers. People utilizing this model as part of their decision-making process can save time, money, and frustration as well as contribute to streamlining and improving their own industry.

Posted by Sasha Grebenyuk at 7:15 PM | Comments (0)

August 25, 2009

Are You a BI Skeptic?

People who are skeptical typically need to see results in order to be persuaded. If you're a skeptic yourself, or are trying to convince a person you report to that is a skeptic of something, concrete case studies, visuals, and hard number can be what's needed to persuade people.

In terms of business intelligence tools (commonly referred to as BI), skeptics believe that making a big investment in BI tools is an expense they cannot justify, especially in the current business landscape. Some believe it's an unjustifiable expense due to the fact that there are tools and resources they've already invested in. They don't realize how different today's tools are from the tools they bought a few years ago. Many don't realize that their staff are left to struggle with ineffective reports and don't realize how much easier business decisions could be to make if only the right data was available. If you don't have comprehensive data in front of you, aren't your decisions just being made based upon guesswork? Estimates can have a large margin of error and this can be costly to a business, especially in today's business landscape!

Are Your Analytical Tools Really Effective?

Effectively analyzing data can help any business leader or even an entry level staff member make more effective decisions and the truth is that too many companies cannot use the data analysis tools they've already invested to their maximum benefit in for several reasons --- namely the fact that they have a heterogeneous computing environment so their tools have trouble talking to each other.

Many businesses who haven't paid much attention to business intelligence tools think they've already got a decent BI system because they get reports today. They've been running these reports daily, weekly, or monthly for as long as they can remember but in many cases, these static reports don't really help them analyze their business effectively because the reports are a bit like jigsaw puzzles that take time, effort, and sometimes take system down-time to obtain. Many people become so accustomed to using the tools that they have that they don't even realize how much better and easier it could be. If you've always had to wait for information and always had to include a certain margin of error because it wasn't “up to the minute” information, you don't really know what you're missing.

Many of today's data mining tools can help you get instant information in a format that's much easier to understand and easier to use, regardless of how many systems have to be looked at in order to come up with a report. With the right data you can: get, share, and analyze information as and when you need it and this means you can make educated decisions about your business.

While some executives believe that their company already has reports and data to use, others others just don't realize what type of an impact better analytical tools could have on their business. Some people have become complacent with their mediocre systems and tools and don't realize the positive impact on their business if they could make their data more usable to their staff and for their own strategic purposes.

For many BI skeptics, nothing talks quite the way money does and while there is an initial investment in putting new business intelligence tools in place, the return on investment comes when you can quickly pinpoint areas for your business to improve and grow. These improvements can come in operational improvements that reduce the need for staff or that improve order cycle time for happier customers and can also help you analyze information so that you can make more sales than before.

How can you decide if your business intelligence tools need to be improved or upgraded? Talk to a business intelligence specialist who can show you in dollars and cent and with case studies what kind of difference it can make to your bottom line.

Posted by Sasha Grebenyuk at 3:15 PM | Comments (1)