Strategic Supply Chain Management - Supply Chain Online

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268 Strategic Supply Chain Management is notable that a greater portion of their inventory is in finished goods, whereas a smaller portion is tied up in raw materials and work in progress (WIP). The BICCs are operating with only about one month of inventory versus two to three months for other companies (see Figure A-7). BICCs also are able to respond to increases in demand by obtaining labor, materials, or manufacturing capacity needed to react to a 20 percent unforeseen increase in demand within about 3 weeks, compared with about 8 to 10 weeks for the other companies (see Figure A-8). By definition, significantly lower inventory days of supply are highly correlated with lower cash-to-cash cycle time, which represents the days of inventory plus days of receivables net days of payables. Somewhat shorter cash-collection and accounts-payable cycles translate to about 3 weeks for cash-to-cash cycle time for BICCs versus 9 weeks for median companies and more than 16 weeks for WICCs (see Figure A-9). In addition to lower inventory financing costs, BICCs showed lower supply chain management costs. While the percentage of revenue spent on supply chain IT assessments and supply chain-related finance and FIGURE A–6 BICCs’ higher forecast accuracy. 82% 80% 78% 76% 74% 72% 70% Unit Dollar BICC Median WICC © Copyright 2004 The Performance Measurement Group, LLC
APPENDIX A Source and Methodology for Benchmarking Data 269 FIGURE A–7 BICCs’ performance on days of supply. 120 100 Days of Supply 80 60 40 20 0 BICC Median WICC © Copyright 2004 The Performance Measurement Group, LLC FIGURE A–8 BICCs’ performance on upside production flexibility. 80 70 60 50 Days 40 30 20 10 0 BICC Median WICC Note: Upside production flexibility was 1 of 4 metrics used to determine the BICC population © Copyright 2004 The Performance Measurement Group, LLC
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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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Page 298 and 299: Stage 4: Cross-Enterprise Collabora
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Page 330 and 331: 308 Index Business strategy: metric
Page 332 and 333: 310 Index F Faught, Laura, 175-176
Page 334 and 335: 312 Index Mexico, 96, 196 Michelin,
Page 336 and 337: 314 Index Regional planning group,
Page 338: 316 Index Toys “R” Us, 53 Trace
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