Supplier Valuation and Segmentation

Supplier Valuation and Segmentation

Based on performance to established targets and inbound logistics volumes, suppliers should be classified into three or four segments.  One large retailer classifies suppliers as red light (100% receiving inspection), yellow light (50% receiving inspection), and green...
Supplier Quality Metrics

Supplier Quality Metrics

Four helpful indicators of supply quality are: perfect purchase order percentage (PPOP), supplier fill rate (SFR), supplier satisfaction index (SSI), and matching rate of receipts and purchase orders. Perfect Purchase Order Percentage The perfect purchase order...
Supplier Financial Metrics

Supplier Financial Metrics

Purchase Order Cost The cost per purchase order is a critical element in supply planning, effecting the size of order quantities and related inventories. The most familiar affect is in the economic order quantity where the greater the purchase order cost (POC), the...
Inventory Visibility Optimization

Inventory Visibility Optimization

Inventory levels to a large degree are about trust. Since we tend to not trust what we can’t see, any blind spots or poor visibility in the supply chain will be places where excess inventory accumulates. The value of visibility is replacing information about inventory...
Leadtime Reduction

Leadtime Reduction

There is a near maniacal emphasis on leadtime reduction in many organizations. A few years ago we completed a supply chain benchmarking project with a large company in the computing industry. I met a group of engineers there unlike any I have ever met; the velocity...
Interleaving

Interleaving

A good warehouse management system should maintain an on-going to-do list of required transactions based on event triggers. The system should assign efficient batches of multiple transaction of work to warehouse resources. The execution of multiple tasks in a single...
Sales and Operations Planning

Sales and Operations Planning

Sales and operations planning (S&OP) receives a lot of attention as a potential panacea for inventory optimization and rationalization. Done properly it can help along those lines. The key, usually missing, is “done properly”. Over the last few years I have...
Deployment Simulation System

Deployment Simulation System

A few years ago we developed a supply chain strategy for the spares group in a large semi-conductor company. The catalyst for the project was a request from their sales group to provide each customer with their own spares warehouse located inside each customer’s...
Inventory Deployment

Inventory Deployment

Sometimes it’s not the amount of inventory but where it is located that makes the difference. The allocation and assignment of inventory to multiple locations is inventory deployment. It is one of the most complex inventory strategy decisions because it opens up...