In the tale of the Ancient Mariner, the English poet Samuel Taylor Coleridge wrote “Water, water, everywhere, Nor any drop to drink.” When it comes to analyzing supply chain performance in many organizations today, it is often a case of data, data, everywhere, but not a decision to be made!
Actively managing the performance of our supply chain has never been more important. Increased globalization, complexity, volatility of demand and supply, regulatory requirements, and greater dependency on suppliers and other partners have significantly increased the risk of doing business (see recent blog Supply Chain Risk and Charles Darwin). It is therefore, no surprise that in all the recent supply chain trends surveys “supply chain visibility”, “supply chain analytics”’ or “supply chain performance management” always appear near or even at the top.
But, knowing your inventory positions, delivery dates, and fill rates is not enough. You must also understand the impact of supply chain changes on total cost or cash flow and optimize supply chain effectiveness for better corporate results. This requires end-to-end visibility into factors that drive performance – such as cash-to-cash cycle time, overall supply chain cost, or the quality of your order fulfillment.
The good news is, there is no shortage of data for this purpose. There is, in fact, “data, data, everywhere”. However, much of this critical information may be buried within your enterprise systems and dispersed across multiple documents, system records, locations, companies and databases. You may not even know what data you need to make crucial decisions. To compound this challenge, research firm Gartner Inc. (Stamford, Conn.) estimates that enterprise data volumes will grow 650% in the next five years.
Your supply chain metrics may also lack formal definitions and standards common in finance and other areas of your business. In addition, it’s likely that neither your business managers nor your IT department has the time to create the modern and flexible information architecture your enterprise requires to address its evolving supply chain needs.
There are standards and best practices available. Probably the best and most widely used is the Supply Chain Operations Reference (SCOR®) model, introduced by the Supply Chain Council about 15 years ago.
The Supply Chain Council (SCC) is a global nonprofit organization whose framework, improvement methodology, training, certification and benchmarking tools help member organizations make dramatic, rapid, and sustainable improvements in supply chain performance.
SCOR® helps manage a common set of business problems through a standardized language, standardized metrics, and common business practices which accelerate business change and improve performance.
Recently, the Supply Chain Council announced the 2011 North American Supply Chain Excellence Award Winners. One of these awards, The Technology Advancement Award, which recognizes an organization that develops methodologies or products that enable superior supply chain performance, was awarded to SAP. Based on the SCOR® model, SAP’s BusinessObjects Supply Chain Performance Management (SCPM) solution improves end-to-end supply chain visibility, which supports departmental and organizational performance management.
Do you have “data data everywhere” across your supply chain? Do you have to tools to analyze that data?
The key to leveraging this data is to focus on the right process metrics to track performance, diagnose bottlenecks, and uncover opportunities. You can then take informed action towards improved supply chain performance and quench your thirst for information and decision support across your supply network.