COMPANY BUSINESS PERFORMACE ENHANCEMENTS
Systems and Data Processes Site network SC Collaboration SC Strategy Supply Chain Vision Contribution to Business strategy ► Outlook system in roll - out phase, not fully operational ► SAP processes not always faster than “old BPICS” routines ► Master data availability often delayed, causes process delays ► Lack of collaboration along process chain; focus on own operations ► KPI focused on functional performance, not enough on SC performance ► Order placement does not consider capacity shortages early enough ► Extensive intra - company business, but affiliate demand management poor ► Optimization of “source of supply” not when enough established ► … ► Few SC collaboration with large and target customers (demand, supply) ► Few SC collaboration with large and target suppliers (demand, supply) ► SC performance measurement with internal focus, not partner focus ► No clear supply chain strategy formulated ► No supply chain role, responsibility ,or organisation formulated ► No real ownership for integrated extended supply chain performance ► No clear supply chain vision formulated ► Impact of supply chain performance on business performance limited to cost ► … ► Impact of supply chain performance on business performance limited to cost ► High number of new business needs to be handled efficiently and effectively ► …
Business performance build on supply chain performance • The business strategy sets the direction for the company. So a good strategy should result in good business performance. But often this is not the case due to small or big operational problems, challenges, and underperformance • In fact, the bottom line of a company is driven by two simple factors - revenue, and cost. In order to address the top line, manyfold activities are necessary regarding attractive products and services, access to markets, wide customer base (preferrably with high loyalty), and a good pricing. • But only if the supply chain delivers the products in the right way, a revenue takes place. Many companies still underestimate the impact of a high-performing supply chain on the business results. Not all of the positive contributions of a good supply chain are measurable with the traditional set of performance metrics • Only with a wider perspective on the positive (and also negative) contributions of the supply chain, embedded in its value chain, can unleash the real power for success • For more details on the correlation between company success, and supply chain performance, click here to see World Class Best Practices.
Revenue Profitability Cost Growth Protection Reduction Containment Variable Employee Expenses Process Employee Efficiency Throughput Service Levels Effectiveness Consolidation Reduction Capacity Vertical Horizontal Acquisitions Segmentation Loyalty Customer Service Proposition Pricing Value Geographical Market share Market Expansion Levers Strategic Options Activity Focus Strategic Drivers Challenge Instru - ments
Another way to look on overall business performance with value chain excellence in mind is to identify all strategic levers • Business performance always addresses revenue as well as cost position. This needs to be analysed in a systematic way, as the solutions to the generic “buttons” are very different for each company. • Top line growth is a key driver of profitability, and the challenge for the value chain, and the supply chain, is how to support the growth in the right way, and not to run into bottlenecks, and underperformance. • Overall cost effectiveness is a key enabler of profitability. Therefore a targeted cost management is key to not have “wasted cost” in the chain.