We all know the traditional supply chain mandate;
“Get the right product, to the right customer, at the right time, at the lowest cost."
This mandate is creating cascading problems and continual operational stress due to capacity shortages, increasing complexities and escalating costs. Working harder and longer can only take you so far, often with disappointing results. The good news: there's an approach that works 100% of the time using net landed profit analytics.
Look at your challenges more holistically.
You can only stop fire-fighting when you can see a bigger picture.
This starts with the servicing of customers and the availability of products based on their profit performance. This extends to the entire value chain including strategic vendor alliances.
The power of having an effective and sustainable approach to tackling this issue is well documented in the Harvard Business Review article Managing Alliances With A Balanced Scorecard by Robert S. Kaplan, David P. Norton and Bjarne Rugelsjoen. In this article, the work done by Christopher Adams and his Team at Lagasse Wholesale, now Essendant, yielded significant results.
Create specific Cost-to-Serve and Net Landed Profit performance information for every Customer and Product.
This was a key impactor for for Lagasse Wholesale’s operation because it focused resources on profit impact at a level that addressed specific targets, rather than a cost-accounting approach which either can't see problems or can't pinpoint their source.
How is this done? Don't try and plow through ongoing supply chain operating requirements without the ongoing benefit of prioritizing available resources.
The following videos summarizes the approach.
CLICK HERE FOR EXPLAINER VIDEO (two minutes)
CLICK HERE FOR INTERVIEW / EXPLANATION OF BENEFITS (seven minutes)
2022 will continue to see ongoing end to end supply chain disruptions. How will your company deal with these ongoing stress points and battle fatigue?