Strategic Supply Chain Management - Supply Chain Online

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86 Strategic Supply Chain Management You won’t be able to follow all these principles without integrating delivery with other core business processes. For example, data management requires getting product-related data from the technology, product, and service development processes. Customizing supply chain processes as part of customer collaboration will require adjustments to the marketing and sales process so that customer contracts systematically take logistical aspects into account. Moreover, the marketing and sales process must provide deliver with information on pricing, customer-specific terms and conditions, and the clear guidelines on customer priorities needed to balance service and the cost to serve. To meet your customer delivery commitments consistently, you’ll also have to integrate delivery with your company’s other supply chain processes. Plan depends on the deliver process for information on demand—based on order backlog and customer shipments—for both resource and revenue planning. In addition, creating collaborative business models and tailoring deliver processes can have significant implications on plan, source, and make. For instance, the make and the plan processes provide deliver with the inventory and production scheduling data needed for customer order promising. Depending on the collaborative model chosen, the type of information needed and transaction frequency can change significantly. See Figure 2-12 for the metrics of top performance in deliver. Return The return process ensures that previously sold products are supported, collected, and dispositioned according to business policies and customer FIGURE 2–12 Metrics of top performance in deliver. Deliver Order Fulfillment Lead Time for Make to Stock Products Order Management Costs Days Sales Outstanding Discrete Process Discrete Process Discrete Process Best Performer Advantage Over Median/Average 4 times faster 4 times faster Spend 42% less Spend 31% less 43% less days 36% less days © Copyright 2004 The Performance Measurement Group, LLC
CHAPTER 2 Core Discipline 2: Develop an End-to-End Process Architecture 87 agreements and covers all activities from return authorization to financial settlement. The primary drivers behind return differ by industry but typically include the return of defective, wrong, or unsatisfactory products; maintenance, repair, and overhaul (MRO) based on service agreements; excess channel inventory returns; and recycling/refurbishment/reuse. Different activities may be associated with each of these return “types.” Return is a reverse supply chain process and has specific requirements and characteristics that differ from the forward supply chain. For example, return involves capturing item-level data from the point of return, tracking a product until disposition, and managing warranties for the complete product life cycle. It also requires capturing a range of analytics, including the causes of returns, originating locations, costs, and credits. In addition, the return physical network entails specific challenges. For example, returns typically feature small volumes of many different items with irregular frequency. Companies must find a way to collect, sort, and distribute this array of items as efficiently and economically as possible. Often, central collection points provide a way to aggregate volume in a cost-effective manner. For return process excellence, follow these four key principles: ◆ ◆ ◆ Create a distinct supply chain for return, such as deciding whether a product can be returned, how it will be disposed of, and how to manage supplier or customer credits and other financial transactions. Return requires a separate supply chain, with its own end-to-end processes, information systems, performance scorecard, and organizational responsibilities. Feed back return information quickly. Provide timely information on returns to guide both disposal and preventive actions. For example, procurement will deal with suppliers appropriately, based on return information. Production, engineering, and logistics will learn from return information and use it to take corrective action in their respective areas. Return managers will use data on costs, credits, and revenues to manage reverse supply chain operations. Base return policies on total cost of returns. Set up an explicit return policy for each item sold, whether manufactured internally or purchased for resale. Consider using an external returns specialist depending on the nature of the return, the total costs of the return—including assessment, collection, sorting, and disposal— and your company’s existing return capability.
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Copyright © 2005 by The McGraw-Hil
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viii CONTENTS OWENS CORNING PROFILE
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x FOREWORD now it has to be brought
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xii FOREWORD Another “early adopt
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xiv FOREWORD through research, use,
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xvi FOREWORD on its promise. Is thi
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xviii ACKNOWLEDGMENTS owe thanks to
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2 Strategic Supply Chain Management
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10 Strategic Supply Chain Managemen
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Stage 4: Cross-Enterprise Collabora
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FIGURE B-3 Summary results of popul
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308 Index Business strategy: metric
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310 Index F Faught, Laura, 175-176
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312 Index Mexico, 96, 196 Michelin,
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314 Index Regional planning group,
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316 Index Toys “R” Us, 53 Trace
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