Supply chain performance refers to how effective each stage of the ecommerce supply chain is in optimizing costs, reducing inefficiencies, improving speed, and meeting customer expectations.
Full Answer
What is supply chain and inventory management?
Supply chain and inventory management can be a complicated subject and managing it can be a big task. From suppliers to manufacturers to distributors to customers, products and information constantly flow throughout the chain and getting a handle on it all can sometimes seem overwhelming.
What is a supply chain?
A supply chain or logistics network is the entire system of organizations, people, technology, activities, and resources, which includes the movement of products or services from the supplier to the customer.
Does inventory inaccuracy affect performance in a retail supply chain?
Inventory inaccuracy is a main issue in businesses dealing with physical assets. The aim of this paper is to examine the relationship between inventory inaccuracy and performance in a retail supply chain. We simulate a three echelon supply chain with one product in which end-customer demand is exchanged between the echelons.
What are supply chain metrics?
Supply chain metrics are defined by establishing specific parameters which are used in quantifying and defining supply chain performance. The metrics can be utilized in the inventory accuracy and turnover metrics, to the inventory-to-sales ratio.
What is stocks in supply chain?
What is safety stock in supply chain? Safety inventory is carried to satisfy demand subject to unpredictable demand fluctuations and to reduce product shortages. This type of inventory cushion is also called safety stock or buffer inventory.
What is supply chain performance?
Supply Chain Performance refers to the extended supply chain's activities in meeting end-customer requirements, including product availability, on-time delivery, and all the necessary inventory and capacity in the supply chain to deliver that performance in a responsive manner.
What are the five measures of supply chain performance?
The SCOR model defines a supply chain as being composed of five main integrated processes: Plan, Source, Make, Deliver and Return. Performance of most processes is measured from 5 perspectives: Reliability, Responsiveness, Flexibility, Cost and Asset.
What are the 2 types of supply chain performance measure?
Quantitative metrics of supply chain performance can be classified into two broad categories: Non-financial and financial.
How supply chain performance is measured?
Supply chain cycle time is an all-encompassing metric measuring how long it would take to complete a customer's order if all inventory levels were zero at the time the order was placed. This metric is the sum of the longest possible lead times for every stage of the supply chain cycle.
What are the indicators of supply chain performance?
Generally, the supply chain indicators that make sense for most companies are forecast accuracy, order cycle time, delivery performance against date, logistics and transportation costs, inventory turnover, supply variance, demand variance, and planned performance.
Why supply chain performance is important?
Supply chain measurement ensures control over organizational behaviors thereby saving the firm from revenue loss and poor long term growth. Therefore, if you want to keep your company in track, it is vital to implement the primary strategies for measuring supply chain performance.
What is performance management in supply chain management?
Performance management relates to application of processes, methods, metrics, and technologies in order to create a consistent relationship between supply chain strategy, planning, implementation, and controlling.
What are the performance objectives of the supply chain?
The main objectives of Supply chain management are to reduce cost, improve the overall organization performance and customer satisfaction by improving product or service delivery to the consumer.
What is supply performance measurement?
Supply chain performance measure can be defined as an approach to judge the performance of supply chain system. Supply chain performance measures can broadly be classified into two categories − Qualitative measures − For example, customer satisfaction and product quality.
How to improve supply chain performance?
Steps to increase your supply chain performance. 1. Evaluate your suppliers. The supply chain process begins with your suppliers, so the first step to improving your supply chain should be to evaluate your supplier relationships.
What is supply chain management?
Using a supply chain management platform (or even an inventory management platform) can provide greater supply chain visibility across your entire business. If you really want to, you can even open it up to your entire supply chain, including 3PL providers.
Why is supply chain important?
The supply chain is a crucial part of your inventory management and overall business strategy. An efficient supply chain helps your business save money and improve customer satisfaction by reducing wait times for in-demand products. In short, it gives you a real competitive advantage against other companies in your industry.
What happens if a supplier shorts you on your purchase orders?
If your supplier regularly shorts you on your purchase orders, ships orders late, or in any other way fails to follow through on their promises, it’s going to negatively affect your supply chain.
What is a successful supply chain?
Successful supply chains are lean, cost-efficient, and dependable. So if you want to ensure your supply chain costs stay low while your process remains reliable, reevaluate your supply chain strategy and goals to ensure you’re using the best possible plan for your business.
Is data silos bad for supply chain?
And data silos are bad news for any business trying to run a lean supply chain. If your demand planner, procurement agent, and supply chain manager don’t have access to the same data, it can lead to costly slip-ups (like double ordering).
What is excess inventory?
Excess is defined as the inventory on-hand minus the optimum inventory level. Some organizations start with a simpler method to determine excess inventory and define inventory that does not have any demand for example in the next 30, 60 or 90 days as excess.
Does high inventory investment indicate a problem?
High inventory investment by itself does not indicate an inventory problem, as inventory investment for a specific product correlates with the demand for that product. Therefore, it is important to determine the efficiency of that inventory investment by measuring inventory turns or days-of-supply.
Why are retailers and suppliers lacking automated and digitized distribution processes?
Most retailers and suppliers today lack automated and digitized distribution processes which make it difficult to sufficiently add analytical, predictive, and Artificial Intelligence capabilities. This prevents quick decisions on optimal stocking levels.
What do manufacturers need to know about the product lifecycle?
Manufacturers need to have complete knowledge about the specific product lifecycle to accurately forecast demand and to find out where in the lifecycle are those SKUs. They also need to keep a track of the seasonality trends and new product introductions which can impact demand forecast numbers. 2. INVENTORY STRATEGY.
How much did overstocking cost in 2015?
Also in 2015, the global cost of overstocking goods was $470 billion, while the cost of under-stocking was more than $600 billion. With accurate Inventory Optimization, manufacturers can streamline stocking issues using predictive analytics and data-driven insights.
Why do manufacturers need to keep in mind the supplier reliability?
Manufacturers need to keep in mind the supplier reliability for this as each supplier has his/her own lead time and production cycles. Also, manufacturers need to keep a track of the goods which are in transit and not just those which are in stock at the warehouse.
How long can you keep dead stock?
Keeping dead stock for longer periods of time (usually beyond 12 months) can add to the dead weight and impact the purchase of similar items in the future, thus hampering overall inventory management efforts. LACK OF AUTOMATION.
Is forecasting sales with fluctuating demand cycles difficult to achieve accurately?
There is a direct impact as the less accurate the sales forecast the lesser accurate are the stocking levels.
Supply Chain Performance Analytics using Actionable Warehouse-Centric Supply Chain Model and Data
Here we model a warehouse-centric view of a in-country supply chain for a national toy distributor. Sixteen Chinese manufactures ship containers of toys to the distributor via the ports of Los Angeles, Miami, and Houston.
Real-Time Data Integration
The data for the dashboards shown here, in production, will come from multiple systems like Salesforce, SAP, Oracle, and many others. Glimpse dashboards are integrated with a fabulous back end data gathering and transformation system built by Activ Technologies.
Inventory Performance
The Inventory Performance dashboard, as do all others shown here, has a date range selector in the top right corner. Pull-down menus across the top allow you to select one or more distribution centers, any or all of the suppliers, brands, categories, and products.
Inventory Management
The Trouble Table tab on this page calls out specific products that are either out of stock, down to the last 20% of typical order quantity, or that don’t have enough inventory to last until the next replenishment order arrives.
Supplier Management
Here three key metrics let you understand supplier performance across all suppliers, or for a specific supplier. You can even drill down to a specific product. For the vendors, vendor, or product selected, metrics are shown for
Distribution Center Stock
This very visual page enables you to filter by product in the scrollable list at the bottom, and then view every storage location where that inventory exists in any of the four distribution centers. You can also click on an inventory storage location and see the details in the scrollable product list at the bottom of the page.
What are the main stages of supply chain?
The supply chain typically revolves around 4 main stages: Purchasing, Inventory Control, Fulfillment, and Customer Satisfaction. To understand how to optimize your supply chain, you must look beyond your business. Before we go any further, let’s remind ourselves of what “supply chain” really means.
Why is it important to understand the supply chain?
Understanding how to make a supply chain work to your advantage ensures greater business success and customer satisfaction.
What is the role of a purchasing manager?
The role of the purchasing manager in the supply chain and inventory management process. Purchasing managers are responsible for acquiring the best products or materials at the best prices and ensuring that the products are in stock when they are needed. Since inventory can amount to a large percentage of a business' investment, ...
Does inventory transfer occur outside of the company?
Transferring inventory. Not all inputs and outputs occur outside the company. Internal inventory transfers are recorded by Acctivate when inventory moves to a new location within a warehouse or from a warehouse to another location, such as a delivery truck, or between warehouses within a company.
Abstract
Inventory inaccuracy is a main issue in businesses dealing with physical assets. The aim of this paper is to examine the relationship between inventory inaccuracy and performance in a retail supply chain. We simulate a three echelon supply chain with one product in which end-customer demand is exchanged between the echelons.
1. Introduction
Even if information technology (e.g. EDI) is used within a supply chain to share information on end-customer demand and inventory levels, there is still often a discrepancy between the data on customer demand or inventory levels in information systems, and the real physical flow of products.
3. Research question
In our research we want to answer the question: How does supply chain performance change when inventory inaccuracy is eliminated? Our focus is not on changing the physical flow of products. We examine improvements in supply chain performance through more accurate information, given the existing flow of products.
4. Research method
We use simulation as research method. This allows us to study the impact of several factors that cause inventory inaccuracy on a number of supply chain performance measures within a dynamical system.
5. Simulation model
A number of parameters need to be estimated and several relationships between variables and parameters have to be defined when building a simulation model.
6. Supply chain performance measures
Performance measures are used in supply chain management to determine the efficiency or effectiveness of a given supply chain. One can distinguish qualitative and quantitative measures ( Swaminathan et al., 1998; Beamon, 1998 ).
8. Means to improve inventory accuracy
There are different ways in which the problem of inventory inaccuracy can be tackled. We can distinguish approaches that use technology from those that do not rely on technology. Non-technology approaches include benchmarking, awareness building, and process improvements ( Raman et al., 2001 ).
