1. Supply Chain Management Winning with Logistics
AGENDA
Logistics & Supply Chain Management
Big Issues & Lessons Learned
Customer Centric Reconfiguration
Performance Metrics & Way Forward

2. Best use of Resources to Move, Store, & Apply Supply Chain Materials
LOGISTICS
LOGISTICS is the work required to efficiently and cost effectively move and position inventory throughout a supply chain to satisfy Customers
Service
Agility
Cost

3. SCM Enterprise-wide Collaboration
It’s Your Fault
I don’t Care
Blame and Punish
SUPPLY CHAIN MANAGEMENT – requires enterprise-wide collaboration to leverage strategic advantage & to improve operating/service efficiency
Dysfunctional Workgroup
Talent
Technology
Customer Service Desk
Teamwork

4. Supply Chain Management Winning with Logistics
1. Logistics & Supply Chain Management
SCM Scope, Accountabilities & Importance
Common Primary Goals & Generic Processes
Logistics Networks & Operational Differences

5. Supply Chain Management – Scope & Accountabilities
Typical Operations Key Functions
Purchasing
Manufacturing
Materials
Management
Distribution
Services
Demand & Supply
Planning
How do these Industry Functions Align with US Military SCM Functions?
Demand
Forecasting
Supply Chain Inventory Mgt
Product Life Cycle Mgt
Supplier Relationship Management
Buying
Expediting
Raw Materials & Parts Supply
Production
Planning & Scheduling
Materials Control
Production
Quality
Output Mgt
Transport
Warehousing
Freight Mgt
Maintenance
Repairs
Spares
Supply Chain Management
Inbound Logistics
Outbound Logistics
Manufacturing
Where does Your Job fit ?

6. Supply Chain Logistics Management - COMMON PRIMARY GOALS
The SCM Challenge is to Match Supply & Demand
Highest Customer Service at Lowest Competitive Cost
High Tech
Retail
Automotive/ Aviation
Healthcare
Pharmaceutical
Industrial & Chemical
Automotive/ Aviation
High Tech
Retail
Healthcare
Pharmaceutical
Industrial & Chemical
N o t O n e S i z e F i t s A l l
Key Business Differences
Products; Customer & Supplier Relationships; Logistics Network Complexity
Who do you Benchmark with?

7. 3 Generic Supply Chain Management Processes
Demand Planning
Supply Planning
Supply Allocation
Supply Plan 4 5
Allocation
Planning
Operational
(master)
& Constraints 3
Demand
Forecasting
Demand Fulfillment
Order Fulfillment
Allocations
Supply
Execution
Order Promising
Order
Creation 6 7 8 9 10
Order Delivery 1
Netted Forecast
Forecast
Netting 2

8. 4 Generic Logistics Supply Chains
Manufacture
& Distribution
Raw Materials
and /or Parts
End User
Customer
DIRECT SHIPMENTS 1
Direct Ship Finished Products from Source of Supply to End User Customer
Lead Time Must Match Customer Availability Requirement (Order to Delivery)
Typically Predictable Demand with Source Closely Connected to Customers
Raw Materials
and /or Parts
Manufacture
Distribution
Center
End User
Customer
FAST FLOW MERCHANDISE 2
Last Step in Supply Chain (DC) positioned Close to Customer for Fast Delivery
Short Lead Time availability Requires Inventory Located Close to Customer
Allows Low Cost Bulk Shipments to DC then call-off Delivery to satisfy Customer

9. 4 Generic Logistics Supply Chains
Raw Materials
and /or Parts
Manufacture
Distribution
Center
End User
Customer
Parts
Suppliers
OEM
CONSOLIDATION 3
Consolidate Products from Various Sources to Deliver as required by Customer
Added Value Customer Services e.g. Customisation and Prefit Staging
Last Mile Lead Time Must Achieve Customer Availability Requirement
MAINTENANCE & REPAIRS
End User
Customer
Maintenance
Repairs
& Returns
Input
Output
Single
Interface
Manufacturing
OEM / Suppliers
Parts Suppliers
Maintenance;
Emergency;
Exchange;
Warranty;
Chargeable;
Order 4
Repair & Maintenance
Operations +
Distribution Center
Complex Closed Loop Supply Chain (Customer to Customer)
Repairs may include ‘Like for Like’ and / or ‘Same for Same’ Service
Various Maintenance and Repairs categories e.g. Warranty; Chargeable

10. A B C Physical Supply Chain Logistics Networks
Tier 2
Material
Supplier
Tier 1 Supplier
Manufacturing
Operations
Repairs
Distribution
Returns
CUSTOMERS
A. Upstream Sourcing
B. Operations & Downstream Delivery
C. After Sales Services
Supply Locations & Inbound Transportation Modes & Connections
Manufacturing & Distribution Locations + Outbound Transportation Routes
Repairs & Returns Locations + 2-way Transportation Flows A B C
Example Supply Chain Logistics Network
Outbound Logistics
Logistics
Operations
Center
CUSTOMERS
Distribution
Inbound Logistics
Products
OEM
Supplier
Supplies
Sourcing
Raw
Materials.
Parts
Manufacturing A B
Reverse Logistics
Repairs, Spares & Returns
Maintenance &
Repair Center
Repairs & Returns C

11. Customer Focused Performance Improvements/Process Efficiency
Winning Imperatives
Meet Customer Service Requirements
Optimise Resource and Asset Utilisation
Replace Inventory with Information
Drive Productivity Improvements & High ROI
Partner with Suppliers & Outsource Selectively
Manage People to Best Advantage
Potential Public Sector Barriers
Business as Usual, Don’t Rock the Boat
State and Local Resistance to Change
Software Investment Focus is mainly on ERP’s
Budgeting Rules and Spending Windows
Complex Acquisition & Outsourcing Procedures
Civilian Workforce and Trade Union Issues
Business Logistics
Military Logistics
Profit and Growth
Service / Cost Balance
Eliminate Duplication / Redundancy
Run Lean Pipeline Inventory Levels
Drive Margin Improvement
Collaborate - Develop Alliances
Minimise Headcount Levels
Life and Death
Service First
Be Prepared / Build in Safety Factor
Hold Extra Just in Case
Control Costs & Manage to Budgets
Manage Suppliers / Enforce Contracts
Maintain Employment Levels
Changing Mindsets
U.S. DoD and Military Services are Too Big & Difficult to Change
To close a Budget Deficit we must Raise Taxes or Reduce Services
Processes are Fixed Costs (mandated and unchangeable)
Shared Winning Imperatives
Meet Customer Service Requirements
Optimise Resource and Asset Utilisation
Replace Inventory with Information
Drive Productivity Improvements & High ROI
Partner with Suppliers & Outsource Selectively
Manage People to Best Advantage
Significant Improvements can be made in Bite Size Chunks
Do same with less by focusing on Productivity Opportunities
Processes are Variable Costs (key to continuous improvement) X X X

12. Supply Chain Management
Winning with Logistics
2. Big Issues & Lessons Learned
Balancing Demand & Supply
Outsourcing Partnerships
SCM Software Systems
In Your Operation Do you have Customer Service problems and/or High Inventory levels ?
In Your Experience Are we good at Outsourcing ? - Do we Outsource Too Much or Too Little ?
In Your Opinion How would you Rate Your Supply Chain Software Information Systems ?

13. SUPPLIERS CUSTOMERS S & O Pa
How to get Closer to Balanced Demand & Supply
Lessons Learned
Distribution orders
Supplier orders
Bullwhip
Manufacturing orders
Customer orders
Share & Agree Demand Forecasts
Communicate SCM Info’ & Issues
Reduce Lead & Cycle Times
Jointly Manage Improvements
Countermeasures
Typically Customer fluctuations get magnified at each step upstream
Upstream Commitments Downstream Service
S & O P
Collaboration – Work with Supply Chain Partners to Share Information and Synchronise Actions
Visibility – Clear View of Information and Operations
Up and Down the Extended Supply Chain
SUPPLIERS
Planning – Demand & Supply Optimisation comprehending
Enterprise-wide Requirements and Constraints
CUSTOMERS
Operations – Supply Chain Operations Designed to Maximise Customer Service & Minimise Inventory Levels
Control – Measure and Manage Business Performance
Across the Extended Supply Chain
Committed Agile Supply Planning
Consensus Demand Forecasting

14. Demand Forecasting Process
Lessons Learned
MUST HAVE
Qualitative Demand Forecasting Process
Quantitative Demand Planning
Calculations
Demand Information Analysis
Customer Requirements
Expert Inputs
Product Life Cycle Information
Forecast Modeling Techniques
Expectations; Trends; Seasonality
Time Series; Moving Averages
Exponential Smoothing
Inventory Management to Help Balance Supply & Demand $ $$
$$$$
$$$$$$$$
Raw
Material
Component Production
Sub Assemblies
Final
Assembly
Finished
Goods
Product Inventory Typically Doubles in Value at each Manufacturing Stage
Holding Inventory Upstream Provides/Retains Flexibility and Saves Money
Review & Forecast in
Product Groups
Standardize & Modularize where Possible
Reduce
Lead Times
& Cycle Times
Use ABC
Inventory Analysis
Think Postponement Customization

15. Outsourcing Experience Main Reasons Why Outsource Relationships Failb
Outsourcing Experience
Lessons Learned
100 90 80 70 60 1 2 3
Expectations
Cost
Reduction
Expectation
15%
Service
Improvement
10%
Time G a i n s %
years
100 90 80 70 60 1 2 3
Reality
Time G a i ns %
years 5% X
Actual
Service
& Cost
Change
Dun & Bradstreet - GLOBAL OUTSOURCING SURVEY
1000 Companies Survey - More than 50% had Renegotiated the contract mid term
25% had terminated their Outsourced Contract before the due date
Firms are finding it Very Difficult to Take Back Outsourced activities
Main Reasons Why Outsource Relationships Fail
Oversell; Deal Confusion; Poor Planning; Handover Issues
Trying to Replicate In-house Model and Micro-Managing Outsource Company
Metrics Misalignment and Communications Problems
Clash between Low Cost (Economies of Scale) & High Service (Flexibility)

16. Outsourcing Partnershipsb
Outsourcing Partnerships
Lessons Learned
Organisation Readiness for Outsourcing Partnerships
1. Stand Alone Functional Focus
Discrete Departmental Processes
Functional Performance Measures
Resources Dedicated to Department
O r g a n i s a t i o n M a t u r i t y
Must be Ready
at Level 3 or 4
to be Successful
4. Enterprise-wide Collaboration
Enterprise-wide Aligned Processes
Shared Strategy & Execution Metrics
Joint Decision Making & Risk Taking
3. External Partnership Cooperation
Joint Business Processes & Objectives
Linked Performance Measures
Cross-Business Project Work
Be The
5 PL
2. Internal Business Integration
Cross-functional Processes & Actions
Integrated Performance Measures
Inter-department Teamwork
“Don’t give away
the keys to the
Kingdom
BEWARE !

17. Supply Chain Information Systems (SCIS)
Lessons Learned
Supply Chain Systems automate the flow of information enterprise-wide
to help optimise the planning, sourcing, manufacturing and delivery of materials
Suppliers Your Business Customers
Manufacturing
Distribution
Customer
End User
Supplier
A p p l i c a t i o n s
D a t a I n t e g r i t y
Forecasting
Purchasing
Order Mgt
Manufacturing
Finance
Distribution
Service
D a t a W a r e h o u s e s
Information Technology is Not a Solution it is Only an Enabler
We Must Improve the Processes & Streamline the Supply Chain Network

18. Processes, Systems & Tools – Implementation Experience
SCM Systems
Lessons Learned
Processes, Systems & Tools – Implementation Experience
/2 FUNCTIONALITY – Half what you expected
*2 TIME – Takes twice the planned time to implement
*2 COST – Costs twice the amount budgeted
Golden Rules
Define Requirement & Scope Software Package ‘Best of Breed’ or ‘ERP’ Module
Communicate Strategy to all Stakeholders and Gain unambiguous Agreement
Establish the Foundation with Data Integrity
Complete mapping to Match User Specification against System Capability
Select Reputable Supplier with Best Fit Software Solution & validate Feasibility
Align Processes with System Capability and Refuse User Customisations!
Pilot Introduction to Prove Functionality and Build In-house Expertise
Use Project Management techniques to Plan, Coordinate and Control

19. Supply Chain Management Winning with Logistics
3. Customer Centric Reconfiguration
The Winning Formula - Strategy & Execution
Customer Satisfaction is Paramount ! Always Put Customers First
How to Think/Plan Strategically & Execute/Deliver Operationally

20. is Useless if it is only a Wish List
The Winning Formula + =
Business
Success
Superior
Strategy
Competitive
Execution
A Great Strategy
is Useless if it is only a Wish List
The Annual Event –
Strategists Love it
Operations people
Love Fire Fighting
Excellent Operations
Without Alignment
are Wasteful
Do you have Strategy to Execution Disconnects ?

21. Competitive Execution
The Winning Formula +
Superior Strategy
Competitive Execution
Customer Focused
Organisation
Align Organisation Structure
to Achieve and Exceed
Customer Requirements
Investment
Prioritise Financial and other
Business Investments
to Support Customer Focus
Processes
Design Processes and install
Systems Targeted to Deliver
Superior Customer Service
Service
Customer Valued
Agility
Perfect Order Delivery
Expert Support, Quality,
Reliability and Special Service
Competitive Low Costs
for High Added Value
Products and Services
Availability of best Products and Services – Speed, Flexibility and Responsiveness
Cost

22. Strategy Strategy Development - step 1 Start with the Customer
How shall we
measure progress?
Start with
the Customer
Strategy
How should changes
be made?
What changes
have to be made?
Where do we want to go?
Where are
we now?
Time Line

23. Talk to Customers to find out What they want from Logistics
Perfect Order Delivery to Required Date
Dedicated Expert Logistics Leadership
Special Customised Logistics Services
Service
They want the BEST !
Agility
Delivery Speed and Responsiveness
Availability, Visibility and Flexibility
People, Process & Systems Compatibility
They want it NOW !
Logistics Cost Competitiveness
Cost Transparency & Value Add Services
Cost Reduction & Cost Avoidance
Cost
They want it FREE !

24. Customer Satisfaction (CSAT) - Integrated Approach
Example Approaches
Objective
Contact
Frequency
Functional Leadership Team
+ External Organisations
CSAT Survey / Inputs
Identify Drivers of Satisfaction, Purchase Decisions and Loyalty
Measure Product/Service CSAT
Measure CSAT against your Competitors/Best-In-Class
Identify Issues and Business Priorities for Improvement
All Customers
Customers with Competitor and/or BIC experience
Annually
Proactive
Senior Managers
Scorecards
Capture Customer Priorities and Operating Requirements
Measure Customer Specific Performance Metrics
Build Partnership Relationships
Key Customer Accounts
Quarterly
Proactive
All Employees
Interfacing with Customers
Customer Feedback
+ Service Issues & Customer Complaints
Collect Ad-Hoc Operational Information from Customers
Capture and Respond to Customer Issues
Aggregate Data to Identify Improvement Opportunities
Customers with Contact & Experience of your Business Operations
Ongoing
Every Customer issue received
Reactive

25. Example What Do Your Customers Say about You?
Common Phrases Used to Describe BEST Suppliers
Example
Best Value for Money
Easy to Do Business With
Ask How They Can Do Better & Listen
Products are Top Notch
Service is Second to None
Demonstrate That Customers Come First
Flag Issues Early – No Bad News Surprises
Experts and Leaders in Their Field
Excellent Working Relationships
We Recommend Them
Use Customer Feedback information to determine where You Are Now & Where You Want to Go

26. Strengths/Weaknesses + Opportunities/Threats
Strategy Development
- step 2
How shall we
measure progress?
Strategy
How should changes
be made?
Organisation
Investment
Processes
What changes
have to be made?
Where do we want to go?
CSAT
Feedback
Where are
we now? S W O T
Strengths/Weaknesses + Opportunities/Threats
Time Line

27. Changes Required -> Organisation Investment Processes
Example Strengths/Weaknesses + Opportunities/Threats
Strengths
Weaknesses
Expert Knowledge of US Military Customer Requirements
Beaurocratic Processes =
Slow to React & Change
SWOT Analysis
Opportunities
Threats
Benchmark & Partner with other DoD Operations/Functions
Outsourcing Core Competences
Changes Required -> Organisation Investment Processes

28. Strategy Strategy Development - step 3 CSAT Feedback S W O T Customer
Valued
Metrics
How shall we
measure progress?
Strategy
How should changes
be made?
Organisation
Investment
Processes
What changes
have to be made?
Goals
Objectives
Action Plans
Where do we want to go?
CSAT
Feedback
Where are
we now? S W O T
Time Line

29. Simple Strategy Framework
MISSION STATEMENT
Briefly describes the Organisation’s fundamental purpose
Aims of Organization
Primary Customers
Value to Stakeholders
GOALS
State future targets that the organisation wants to achieve
OBJECTIVES
Define specific measureable action requirements
Detail steps + deliverables – Who will do What by When?
ACTIONS
Specify the performance measures to monitor progress
METRICS

30. Building a Winning Strategy
MISSION STATEMENT
GOAL
OBJECTIVE
ACTIONS
METRICS
ACTIONS
METRICS
ACTIONS
METRICS

31. Example Strategy Outline for USAF Aircraft Maintenance
Example MISSION STATEMENT
To be the Leading Provider of Aircraft Maintenance to the USAF - Recognized for the Safest provision of Superior Quality, Service and Competitive Prices with a Customer Satisfaction Rating that is higher than all other similar operations/locations.
Example GOAL
Maintenance and Logistics Operations Management that provides ‘Best in Class’ Service Value by Executing Fast Turnaround On-time Delivery and Cost Competitiveness.

32. Example Strategy Outline for USAF Aircraft Maintenance
Example OBJECTIVE
Maintenance and Logistics Operations Management that provides Measureable Service and Cost Performance, Demonstrating the Highest Competitive Customer Service Levels/Ratings and Stakeholder Value Recognition.
Example ACTIONS
Benchmark Customer Satisfaction and Implement an Integrated CSAT approach + Performance Metric Steve Haynes by 1st April 2017
Introduce a Cost Reduction & Cost Avoidance Program + Performance Metric approved by Financial Controller Ed Smith by 1st July 2017

33. Strategy Strategy Development - step 4 CSAT Feedback S W O T Customer
Valued
Metrics
How shall we
measure progress?
Strategy
How should changes
be made?
Organisation
Investment
Processes
What changes
have to be made?
Goals
Objectives
Action Plans
Where do we want to go?
CSAT
Feedback
Where are
we now? S W O T
Time Line

34. Customer Centric Reconfiguration
Summary
Get Close to Customers to Service Their Requirements
Put Customers First in Everything You Do
Review & Agree KPI’s (Key Performance Indicators) with Customers
Ensure Strategy & Execution Alignment to Help Customers Win
Change Organisation, Investment & Processes to Match Strategy
Set Clear Goals; Objectives; Action Plans
Implement & Manage Value Add Performance Metrics
Drive Service, Agility and Cost Improvements
Collaborate Enterprise-wide with Customers & Suppliers
Orchestrate; Hold Accountable; Reward People

35. 3 Steps - Have a Go 1 3 Where are You Now ? Be Honest Strengths
1 to 6
Best Value for Money
Easy to Do Business With
Ask How They Can Do Better & Listen
Products are Top Notch
Service is Second to None
Demonstrate That Customers Come First
Flag Issues Early – No Bad News Surprises
Experts and Leaders in Their Field
Excellent Working Relationships
We Recommend Them
Where are You Now ?
Be Honest 1
Strengths
Weaknesses
Opportunities
Threats 1 2
What changes have to be made? 3
How should changes be made?
How shall we measure progress?
# 35 of 50

36. 4. Performance Management
Winning with Logistics
Supply Chain Logistics Management
Performance Management
Metrics Maniacs or Managers ?
Performance Metrics – Best Practice
Process Improvement – Way Forward

37. But Good Performance Metrics Drive Great Results
PERFORMANCE MEASUREMENT
Most Organisations suffer from Performance Measurement Overkill
We are Metrics Maniacs who struggle to see the Forest from the Trees
We are Not Good at Deciding What to Measure and How to do it
Common Problems
In Business - What you can’t measure is not worth doing!
But
Metrics Must Add Value & Be Used to Improve Performance

38. Performance Metrics - Imperatives
Performance Measures (Metrics) must have an Owner plus:
Definition - a clear, unambiguous Performance Measure statement
Formula - quantification, the mathematical calculation method
Chart - a table, graph or diagram showing performance information
Example 1
100% Complete On-time Delivery to match Customer Request Date (CRD)
DEFINITION
CALCULATION
CRD =
Number of Orders On-time to CRD
Total Number of Orders 2
CHART 95 96 97 98 99
100
Month
% On Time Complete to CRD
J F M A M J J A S O N D
Forecast
97.5
97.2
97.3
5867
Month Total # Orders
96.7
4892
4953
4563
5232
4432
97.9
ON-TIME DELIVERY TO
CUSTOMER REQUEST DATE
JUNE 3

39. Review, Rethink & Rationalize Your Metrics
Communicate the Importance of Performance Measures to All Stakeholders
Explain Plans for Rationalising and Improving Performance Metrics
Collect and Review All Existing Performance Metrics
Talk to Customers to Agree & Prioritise Their Value Add Performance Metrics
Publish Performance Measurement Definitions, Formulae and Metrics Charts
Manage Your Performance, Process & People
Establish New Hierarchy of Performance Metrics and Management Reviews
Optimise the Number of Metrics Produced, Sent and Reviewed at all levels
Use Performance Metrics to Focus on Key Activities and to Change Behaviour
Implement Collaborative Reviews to Monitor and Improve Performance
Benchmark Your Business Processes and Metrics against the ‘Best In Class’

40. Lagging & Leading Metrics/Indicators
Top Level Business Metrics Should Have Some Lagging & Some Leading Indicators
Outcome
Measures
Performance
Drivers
LAGGING
Typically Most Performance Metrics are Lagging Indicators
Lagging Metrics report what has already happened
Examples – Customer Complaints; Production Output; Financial Results
LEADING
Often Measure Activities or Sometimes Processes
Leading Metrics Indicate Future Events – Drivers of Business Results
Examples – CSAT; Customer Demand Forecasts; Financial Budgets
Have a Mix & Don’t Get Hung-Up on Labeling as Lagging & Leading

41. % On-time Supplier Receipts - Available for Customer Orders in 24 Hours
…….an example of a Cross-functional and Hierarchical Metric
Hierarchy
SUPPLER RECEIPTS INPUT
comprises several lower level Metrics
Supplier Receipts Input
Cross- Functional Performance
On-time Supplier Arrival
Quality and Quantity Accuracy
Receipt (all items) Registered on System
Receipt Put Away in Stock Location
Product Availability for Customer Orders 1
DEFINITION
Percentage Complete On-time, Accurate, Quality, Supplier Receipts – Registered on System, Put Away in Stock and Available to Pick, Pack and Ship for Customer Orders within 24 Hours
FORMULA
Composite of all Sub-level Metrics
CHART
Show Receipt Accuracy and
Availability for Customer Orders
Used to track performance and
Highlight Opportunities for
Improvement
% Receipts now Available
ISSUES
On-time Arrival 9
Right Quantity/Quality Registered on System 4
Receipts Put Away 2
Product Available 1 88 92 94
100
Month 23 22 31 29
88.5
Month Total # Receipts
91.5
247
230
312
266
275 90 80 84
J F M A M J J A S O N D
90.1
94.1
92.2
SUPPLIER RECEIPTS INPUT 18 82 86 96 98
No of Errors 10 20 25 30 35 40
298
% Supplier Deliveries On-Time & In-Stock
Forecast
# of Errors 2 3

42. On-time Customer Delivery Supply Chain Response Times
Must Have a Clear, Unambiguous Performance Measurement Definition 1
Definitions ?
Service
On-time Customer Delivery ?
Cost
Cost Reduction ?
Agility
Supply Chain Response Times

43. Clear, Unambiguous Performance Measurement Definition
Example Definitions
100% Complete On-time Delivery
to Match Customer Required Date
with No Damaged, Missing or Wrong
and Full Documentation Accuracy
Service
Customer
Delivery
Cost
Annualised Cost Savings resulting
from Actual Change of Process or
Practice that Reduces Real $ Spend
Reduction
Agility
SC Response
Times
Total SC Responsiveness to Changes
Comprises: Source; Make;
Order Fulfillment & Customer Delivery

44. = ? = ? = ? Service Cost Agility Formula
Must Have a Formula - Quantifiable with a Mathematical Calculation 2
Formula
Service
100% Complete On-time Delivery to Match Customer Required Date with No Damaged, Missing or Wrong and Full Documentation Accuracy
Customer
Delivery
= ?
Cost
Annualised Cost Savings resulting from Actual Change of Process or
Practice that Reduces Real $ Spend
Cost
Reduction
= ?
Agility
Total SC Responsiveness to Changes – Comprises:
Source; Make; Order Fulfillment; Customer Delivery
SC Response
Times
= ?

45. Service Cost Agility & = = =
Must Have a Formula - Quantifiable with a Mathematical Calculation
Example Formulae
Service
100% Complete On-time Delivery to Match Customer Required Date with No Damaged, Missing or Wrong and Full Documentation Accuracy =
Number of Orders 100% Complete On-time to CRD
Total Number of Orders
Errors
Information
&
Customer
Delivery
Cost
Annualised Cost Savings resulting from Actual Change of Process or
Practice that Reduces Real $ Spend
Cost
Reduction
Cumulative Actual Savings Shown for a 12 Month Period
+ Itemised Listing / Ownership Ratified by the Financial Controller =
Agility
Total SC Responsiveness to Changes – Comprises:
Planning; Source; Make; Order Fulfillment; Customer Delivery
SC Response
Times =
Total Days (Added) Supply Chain Activities (Lead Times) for -
Sourcing; Making; Order Fulfillment; Delivery

46. Must be Showable as a Chart, Table, Graph or Diagram to Track Performance Trends & Improvements3
CRD Calculation Example
CRD =
# Orders on time to CRD
Total Number of Orders
Example SERVICE Chart
Perfect Delivery
No of Errors
110
120
130
140
150
160
170
180
100
100
171
111
104
173
127
128
June Example
5694
5867
% On Time to CRD = X
100
On Time to CRD =
97.1%
173 Errors
5867 99
5232
4953
4892
4563 98 98
4432
97.9
Forecast
% On Time Complete to CRD
97.5
97.1
97.3
97.2 97
ERROR ANALYSIS
Order Entry 46
Product Available 37
Pick Pack Ship
Product Quality 16
On-time Delivery 21
Documentation
96.7 96 95
J F M A M J J A S O N D
Month
5867
Month Total # Orders
97.1
% On Time Deliveries
No. of Errors
173

47. Cost Reduction Actual v. Forecast
Example COST Improvement Chart
Cost Reduction
Annualised Cost savings resulting from an actual change of process or practice that reduces real $ spend
Cost Reduction Actual v. Forecast $K
1800
e.g. Reusable Packaging – Total current disposable packaging versus new reusable design including return handling and transport costs = CR.
1600
1400
JUNE Monthly CR $K Savings
New CR Introductions
Switch 25% Small Parcel Deliveries from FedEx & UPS to US Post Service = $14K
CR Phase Outs
MRP Software Application Upgrade = ( $37K)
1200
1000
Cumulative Savings $K
800
600
Cost Avoidance
Annualised theoretical saving gained by doing something differently from the normal method of operation thus avoiding costs
400
200
e.g. Transportation Mode – New Route select Surface versus Air to deliver on-time but save shipment costs J F M A M J J A S O N D
Actual CR
Forecast CR

48. Supply Chain Response Times
Example AGILITY Chart
Supply Chain Response Times 10 20 30 40 50 60 70 80 90
100
120
130
150
140
110
160
TOTAL
SCRT
(half scale)
Must Explain Actions & Issues for Supply Chain Response / Lead Time Reductions in each area : Source; Make; Order Fill; Delivery
e.g. MAKE Quarter 1. = Manufacturing Re-layout to Eliminate Bottlenecks & Downtime (34 to 30 days) 80 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80
Forecast
145
TOTAL SCRT
(half scale) 60
123 20 15 28
Metrics Must Identify
Activities Included &
Excluded in each Area:
Source; Make;
Order Fill; Deliver 15 12
110 55 28 W O R K I N G D A Y S
(34 to 30 Days)
SOURCE 30
ACTUAL
DAYS 20 15
MAKE
ORDER
FILL
DELIVER Q1 Q2
TIME Q3 Q4

49. PERFORMANCE LEADERSHIP
Most Metrics do Not Align with the Business Strategy & Key Drivers
Too Often we Fail to Share Metrics with Stakeholders and Customers
Many Metrics are Never Reviewed/Used to Improve Performance
Common Problems 50
100
150 Q1
MFG $K SPEND
FORECAST
ACTUAL
Bear Pit Killer
Punish the Innocent Q2 Q3
Cheer Leader Coach
Reward and Assist
What are your Reviews like ?

50. Supply Chain Logistics Management
Winning with
Supply Chain Logistics Management
Way Ahead
Talk to Customers & Align Your Business to Match Their Requirements
Collaborate & Link with Customers + Partner & Work with Suppliers
Map Your Supply Chain Processes & Implement Improvement Opportunities
Ensure Your Strategy & Execution Focuses on Best …Service Cost Agility
Establish Key Performance Metrics (to give Direction & Change Behaviour)
Concentrate on Reducing Process Cycle Times & Operations Lead Times
Use Your Time to Best Advantage – Must Do Should do Could do
Lead by Example & Inspire others to Teamwork & Help Make Improvements