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The Supply Chain Essentials Checklist Every CEO Should Use

The Supply Chain Essentials Checklist Every CEO Should Use

If you’re a CEO and you keep yourself up-to-date with executive trends, you’ve probably heard a lot lately about the importance of understanding your company’s supply chain. As someone once said though, there’s no such thing as CEO training and the demand for your attention across the business is never-ending. With so much going on it can be hard to even know where to start thinking about the supply chain essentials, unless your background is in logistics or something similar. Still, the need to get involved with supply chain won’t go away anytime soon, so you might find this quick checklist handy. It provides you with some of the essential supply chain points that you as CEO should focus on and get involved with, at least as far as practicable.   15 CEO Supply Chain Essentials to Get Your Teeth Into   CEO Essentials Section A: Supply Chain Strategy and Leadership 1) Does your company have a supply chain strategy? 2) If the answer to point 1) is yes, does the supply chain strategy align with your company’s mission? 3) Do you have a Chief Supply Chain Officer and if not, is your company large enough to think about appointing one? 4) If the answer to point 3) is yes, does your CSCO have a background in supply chain or logistics? 5) Do your senior supply chain leaders have strong skills and experience in supply chain management?     CEO Essentials Section B: Supply Chain Performance 6) Do you know how well your supply chain performs in comparison with best-in-class companies, the industry average, and peer companies with similar operations? 7) Is your supply chain performance measured using cross-functional metrics which drive internal collaboration and discourage teams from working in silos? 8) Are performance-KPIs externally focused, providing visibility of customer service levels?     CEO Essentials Section C: Service and Efficiency 9) Does your company regularly capture logistics service-related feedback from its customers? 10) Do you know, or can somebody in your management team tell you the following information: The supply chain cost per unit-sold? Supply chain cost-per order? The number of stock turns per year? 11) Does your company take steps to influence customer behaviour in a way that reduces supply chain cost? 12) Is your supply chain network design optimal for cost-effective service delivery? 13) Do you know, or can somebody in your team tell you why...

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3 Benefits of Transportation Fleet Benchmarking in Logistics Companies

3 Benefits of Transportation Fleet Benchmarking in Logistics Companies

Are you responsible for transport and distribution in a manufacturing or retail organisation? Is your company a third-party logistics provider with its own fleet of transport assets? Or are you in charge of a field service company or division, trying to maximise the ROI of your technicians’ vehicles? Whatever the purpose, if you have responsibility for road-going vehicles, transportation fleet benchmarking can help you answer those difficult questions which continually crop up in your operations meetings … You know, questions like “Are our services competitive?” and “Do we utilise our assets effectively?”   Can You Afford to Miss Out on These 3 Benchmarking Benefits? As with other aspects of supply chain management, fleet operations can only be improved if performance is measured in the first place. That alone should be enough reason to consider regular transportation fleet benchmarking. If that’s not sufficient to pique your interest, though, perhaps the following three benefits will persuade you of the value being missed if benchmarking is not on your continuous fleet improvement agenda.   1. Benchmarking Highlights Fleet Management Weaknesses To speak only of the inability to improve what isn’t measured is to understate the importance of transportation fleet benchmarking. In reality, if you have never actually compared your transport fleet performance with a peer group, you can’t even know if you need to improve, or if so, where, and by how much. Transportation fleet benchmarking will show you where your fleet is performing strongly in comparison with your peers and competitors. More to the point, though, it will highlight weaknesses, giving you the opportunity to concentrate efforts where improvement will yield best results.   2. Benchmarking Helps You Prioritise Improvements Okay, so it’s probably not fair to conclude that you have no idea of your fleet’s performance, even if you don’t regularly practice transportation fleet benchmarking, but here’s the thing. You and your team may have ideas about what needs improving, but without a single, objectively measured version of the truth (which benchmarking will provide); you could easily waste time, money and effort trying to improve the wrong performance elements. If you practice transportation fleet benchmarking, and do so on a regular basis, you can train a laser focus on the improvements most likely to drive profits and competitive strength. For example, there would be little point in pursuing fuel consumption reductions in an operation with trucks that cover excessive distances...

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Supply Chain and Logistics Process Mapping: Why and When to Do It

Supply Chain and Logistics Process Mapping: Why and When to Do It

If your company has ever hired a logistics consulting company (or any type of consulting firm for that matter), you may have noticed how keen their consultants are to carry out logistics process mapping at the start of a project. Rest assured, process mapping is not simply a way to earn some extra consulting revenue. There is a very good reason why supply chain or logistics process mapping is high on the list of consultants’ priorities— and why it should be high on yours too.   Why Consultants Love Logistics Process Mapping So why are consultants so enamoured with logistics process mapping? It’s simply because it’s a great way to learn about your business, as well as to gain knowledge crucial in solving the problem or issue at hand. During the time they spend mapping your processes, consultants come to understand how and why things currently work the way they do. It’s also an excellent opportunity to pinpoint possible bottlenecks and pain-points, which can then become the basis for improvement initiatives.   Why You Should Love Process Mapping Too Logistics process mapping is a very worthwhile exercise for your company to execute, regardless of whether you use consulting help or not. For one thing, creating and maintaining current process flow diagrams will save you some money if you should hire a consulting company in the future (since consultants can refer to your documentation instead of carrying out their own process mapping). For another … well, actually there are many other ways in which logistics process mapping can benefit your operation. For example: It makes process improvement projects a lot easier from the outset It can improve general process understanding across your organisation Process maps are invaluable for use in training activities, particularly when on-boarding new hires Process maps are also perfect for presenting key business processes to external stakeholders, suppliers, service providers, supply chain partners, and customers   When to Perform Logistics Process Mapping Given the advantages of a set of fully detailed process maps, there is really no bad time to map your “as-is” logistics processes. However, there are some situations in which it’s especially desirable for processes to be documented in a visual format. Here are some examples of just such a scenario: Internal Benchmarking: If you are benchmarking performance across a large logistics network, process mapping will make it easier to identify how and why some...

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Supplier Days: A Great Way to Jump Start Supply Chain Collaboration

Supplier Days: A Great Way to Jump Start Supply Chain Collaboration

It’s also no secret that supply chain collaboration, while invaluable, is something easier said than done. If this is something your company is endeavouring to master, a great place to start is with your direct suppliers. One way to get the collaborative ball rolling with suppliers is to host a supplier day (or a series of them). Let’s take a look at how supplier days can work and the benefits to be obtained from using them to promote supply chain collaboration.   The Objective of Supplier Days The main purpose of a supplier day is to host representatives from your direct suppliers at your plant or distribution centre, inviting them to take part in a one-day program of collaborative activity. During that day, you will offer a tour of your facility and present some information about how your business and supply chain operates. The remaining slots on the schedule would allow for one-to-one (or team-to-team) discussions between your team members and those of each supplier, to generate ideas and begin formulating plans for ongoing collaborative initiatives. Ultimately, the goal of a supplier day is to jump start supply chain collaboration by cementing relationships between individuals and teams, and identifying ways in which collaborative efforts can deliver add value/reduce costs within your supply chain.   Maximising the Value of Supplier Days In order to get the best from a supplier day, activities should be carefully planned. Aside from promoting collaboration, you can derive extra value from the event by tapping into the knowledge of each supplier. There is no better time to do that than while providing a day’s hospitality and giving them a close-up insight into your operation. Try to steer clear of discussions about pricing, but instead focus on how each supplier can help you to reduce operational costs and/or improve your product and service quality. To aid this approach, it can be helpful to revisit your factory or DC floor with each supplier and let them see how their materials/products are used or how they flow through your facility.   Tips to Aid Supply Chain Collaboration With Supplier Days Remember that a supplier day should provide value for the companies that you invite as well as for your own organisation. The following tips will help you to plan supplier days in a way that actively encourages supply chain collaboration: Listen more than you talk: The focus for...

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3 Steps to Keep Forced Labour Out of Your Supply Chain

3 Steps to Keep Forced Labour Out of Your Supply Chain

Australian fashion companies have been making the news lately, but not all of them in a good way. At least two luxury clothing brands were publicly criticised for their inability or unwillingness to disclose the sources of their products, leading to speculation that slavery or forced labour might be an issue within their supply chains.   Keep an Eye on the Neighbours Of course the problem of forced labour is an issue for supply chains everywhere in today’s global economy, but with Southeast Asia’s (home to Australia and New Zealand’s closest trading neighbours) notoriety as a hotbed of modern slavery, it behoves Australian retailers especially, to protect their reputations by ensuring product and material sources are squeaky clean, at least to the first two or three tiers of supply. That’s not necessarily an easy task, but it’s certainly possible, as companies like Cotton On and Kmart have demonstrated. If your organisation sources materials or products from overseas (or even if your first or second-tier suppliers do), the following steps are strongly recommended to safeguard its reputation in a society increasingly sensitive to human injustices. 1. Map All Supply Chain Sources It’s no longer OK to be satisfied that your direct suppliers claim no involvement with forced labour. The sensible—if onerous—thing to do is to map all your supply chain sources to at least two-levels deep, but ideally all the way back to the source of raw materials. 2. Assess The Risk Once you know the location of all material sources in your supply chain, you should base next steps on a risk assessment. The assessment itself should not prove too difficult. Quite simply, if your company is connected with suppliers in China, Southern Asia, or Central Africa, these will be your high-risk regions. 3. Audit all Your Known Suppliers This step can be expensive, but not as expensive as a loss of reputation might be if forced labour is discovered in your supply chain. An audit means someone—either from your company or appointed to act on its behalf—physically visits the suppliers to investigate working conditions and the employment status of their workers. A physical audit of suppliers is the only sure way to uncover forced labour or similar unethical practices. The alternative, should any of your suppliers be acting unethically, is to try and limit damage if the public eventually discovers the issue. Before discounting the expense of auditing...

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What’s in Your Supply Chain Insurance Portfolio?

What’s in Your Supply Chain Insurance Portfolio?

The last few years have provided a number of opportunities (if that’s the best expression) to test what happens when disaster strikes at the heart of just one link in today’s convoluted supply chains. Flooding in Thailand, the Japanese earthquake and tsunami, and a number of other disasters left companies across the world struggling to make products available to their customers and remain profitable. With that in mind, does your company have adequate supply chain insurance to cover against all eventualities?   How Much Supply Chain Insurance is enough?   Of course there might always be circumstances in which insurance won’t protect your organisation. However, by taking steps to access the following four insurance types, you will at least be protected against the most likely scenarios: Cyber insurance: Who would have thought the day would come when supply chain insurance would be needed for electronic information? However, losing control of your ecommerce platform or your customers’ personal data can have effects just as damaging as physical losses. Cyber insurance has hence become an essential part of every supply chain insurance portfolio. First-party commercial property insurance: A good first-party commercial property insurance policy will cover your company against supply disruption resulting from loss or damage, not only to your own facilities, but also to those of upstream suppliers and downstream customers. Cargo insurance: Containers fall off ships all the time, truck hijackings and trailer thefts are commonplace. To make sure you can recover inventory losses resulting from such events, your supply chain insurance portfolio should certainly include cargo coverage. Trade disruption insurance: Neither first-party commercial property or cargo insurance will protect your organisation from a supply chain interruption caused by supplier bankruptcy, workers’ industrial action in the country of your supplier, or similar event; unless that event somehow results in suppliers’ property damage or the loss of goods-in-transit. Trade disruption insurance therefore, should be sought to plug the gaps left by the other two instruments.   Secure the Broadest Coverage When shopping around for the insurance products you need to cover your own company, it’s critical to try and secure policies that also protect you against events befalling first or second tier suppliers and customers, wherever they may be located. Supply chain insurance is not cheap and when things are peachy in your supply chain, it’s easy to wonder at the justification for premiums. It only takes one significant event...

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