Integration and Evaluation

Establish/review corporate,
Identify critical supply marketing, manufacturing, sourcing Align supply chain strategies
chain trading partners and logistics supply chain strategies and key process objectives

Develop internal performance Assess and improve internal Develop supply chain
measures for each of the key integration of key supply chain performance measures for each
processes processes of the key processes

Assess and improve external Extend process integrationto 2nd

Re-evaluate annually or
process integration and supply tier supply chain partners and
chain performance beyond
as required
Eight Key Supply Chain Business Processes

• Customer Relationship Management

• Customer Service Management
• Demand Management
• Order Fulfillment
• Manufacturing Flow Management
• Supplier Relationship Management
• Product Development and Commercialization
• Returns Management
Causes of Risks in the Supply Chain

• Silo Mentality
• Lack of Supply Chain Visibility
• Lack of Trust
• Lack of Knowledge
• Activities Causing the Bullwhip Effect
Activities Used to Manage Supply Chain Risks

• Increase safety stocks

• Identify back-up suppliers
• Diversify supply base
• Utilize a supply chain IT system
• Develop a formal risk management program
Measuring Performance

• Use of costs, revenues, and profits

• Use of performance standards and variances
• Use of firm-wide productivity and utilization measures
Developing World Class Performance Measures

1. Identify firm’s strategic objectives.

2. Develop an understanding of each fundamental area’s set of requirements for
achieving strategic objectives.
3. Design and document performance measures for each functional area and
adequately track each required capability.
4. Assure compatibility and strategic focus.
5. Implement new performance monitoring.
6. Identify internal and external trends.
7. Periodically evaluate firm’s performance system.