Introduction and challenges
In a world where consumers take next day delivery for granted, particularly when ordering online, businesses often struggle to define the optimal balance between supply chain cost, working capital, and customer service as the key performance drivers for their operations, even when they operate in a B2B (business-to-business) environment.
Variations in customer demand and supply reliability, the availability of suitably skilled personnel to cope with varying levels of digitisation across the supply chain, and a long list of KPI’s (key performance indicators) that need improvement make for a complex and dynamic supply chain environment. Understanding and addressing supply chain variables, their interrelationships, and the true cause of reduced performance is key to accelerating, securing, and sustaining supply chain optimisation benefits.
How we can help
Argon & Co’s approach, in line with our Stable Ops™ methodology, encompasses a supply chain performance management and improvement approach, which is focused on aligning people and processes to create consistently reliable results. It does this through the identification and elimination of variation in all aspects of the supply chain in order to meet customer delivery requirements:
- In a first phase, we would typically provide a variance-based view on Order to Delivery performance from a customers’ point of view, which is then aligned to a maturity assessment across the various elements of the supply chain, and which results in identification of improvement opportunities to service and inventory replenishment
- In a second phase, we typically implement a connected series of reviews that highlight causes driving prevailing performance issues, and prioritise improvement actions based on predicted impact
- Finally, to reach sustainable solutions, in a third phase we increase the capability of teams to deal with process anomalies in order to enable continuous improvement
Typical results include:
- Improved customer satisfaction, less complaints
- Service levels 95%+ to customer request (98%+ to customer promise)
- Inventory reduction of 20 – 40%
- 10% reduction in supply chain costs
- An enhanced supply chain operating system to systematically drive further improvements
- Emergence of a supply chain improvement mind-set