Souhaïb MGHARBI’s Post

33 KPIs for supply chain management (cont.) #echelon_scs #supply_chain_consultant #sc_kpi 15. Total supply chain cost as a percentage of sales You want every cent you invest in your supply chain to yield a measurable increase in sales. Tracking the total supply chain cost as a percentage of sales is one of the ways to do this. Generally, supply chain investment outpacing sales increase is not the best, although there are caveats. That’s why this metric is better assessed over a long period to give time for the investment to yield its intended outcomes. Knowing this metric can help with scaling decisions. When should I upgrade the supply chain processes and inventory management system? This metric can help. The formula for this metric is: (total supply chain costs / total sales) * 100

Do you know how crucial it is in the supply chain industry to get products from point A to point B quickly and cost-effectively? These supply chain problems can hold your business back and keep you up at night worrying about delayed shipments, inventory management, and rising costs. By streamlining your procurement processes, you can reduce lead times, lower costs, and improve quality. Here are some effective ways to improve your supply chain game through procurement: - 𝗦𝘁𝗿𝗲𝗮𝗺𝗹𝗶𝗻𝗲 𝘆𝗼𝘂𝗿 𝘀𝘂𝗽𝗽𝗹𝗶𝗲𝗿 𝘀𝗲𝗹𝗲𝗰𝘁𝗶𝗼𝗻 𝗽𝗿𝗼𝗰𝗲𝘀𝘀 Evaluate potential suppliers based on factors like quality, reliability, and pricing. Implement a standardized selection process to ensure fairness and transparency - 𝗡𝗲𝗴𝗼𝘁𝗶𝗮𝘁𝗲 𝗯𝗲𝘁𝘁𝗲𝗿 𝗽𝗿𝗶𝗰𝗲𝘀 𝗮𝗻𝗱 𝘁𝗲𝗿𝗺𝘀 Build relationships with suppliers to negotiate better prices and payment terms. Consider bulk purchases or long-term contracts to secure discounts. - 𝗜𝗺𝗽𝗹𝗲𝗺𝗲𝗻𝘁 𝗮 𝗿𝗼𝗯𝘂𝘀𝘁 𝗶𝗻𝘃𝗲𝗻𝘁𝗼𝗿𝘆 𝗺𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝘀𝘆𝘀𝘁𝗲𝗺 Track inventory levels, movement, and storage in real-time. Use data analytics to predict demand and adjust inventory accordingly. - 𝗢𝗽𝘁𝗶𝗺𝗶𝘀𝗲 𝗹𝗼𝗴𝗶𝘀𝘁𝗶𝗰𝘀 𝗮𝗻𝗱 𝘁𝗿𝗮𝗻𝘀𝗽𝗼𝗿𝘁𝗮𝘁𝗶𝗼𝗻 Evaluate transportation modes and choose the most cost-effective option. Implement route optimization and scheduling tools to reduce transit times. - 𝗟𝗲𝘃𝗲𝗿𝗮𝗴𝗲 𝗱𝗮𝘁𝗮 𝗮𝗻𝗮𝗹𝘆𝘁𝗶𝗰𝘀 𝘁𝗼 𝗺𝗮𝗸𝗲 𝗶𝗻𝗳𝗼𝗿𝗺𝗲𝗱 𝗱𝗲𝗰𝗶𝘀𝗶𝗼𝗻𝘀 Collect and analyse data on supply chain performance. Make data-driven decisions to cut costs and maximise supply chain efficiency. By optimising your supply chain, you are not just streamlining your operations but you are building a stronger future for your business. #supplychain #business #efficiency #zopoxo

Maintaining optimal inventory levels is a balancing act – too much ties up capital, too little leads to stockouts. 𝙃𝙚𝙧𝙚'𝙨 𝙖 𝙦𝙪𝙞𝙘𝙠 𝙜𝙪𝙞𝙙𝙚 𝙩𝙤 𝙘𝙤𝙢𝙢𝙤𝙣 𝙧𝙚𝙥𝙡𝙚𝙣𝙞𝙨𝙝𝙢𝙚𝙣𝙩 𝙨𝙩𝙧𝙖𝙩𝙚𝙜𝙞𝙚𝙨: 𝟭. 🔄 𝗖𝗼𝗻𝘁𝗶𝗻𝘂𝗼𝘂𝘀 𝗥𝗲𝘃𝗶𝗲𝘄 (𝗥𝗲𝗼𝗿𝗱𝗲𝗿 𝗣𝗼𝗶𝗻𝘁): 𝗕𝗲𝘀𝘁 𝗳𝗼𝗿: High-volume, stable-demand items. 𝗛𝗼𝘄 𝗶𝘁 𝘄𝗼𝗿𝗸𝘀: Automatically triggers orders when inventory hits a pre-set point. 𝗣𝗿𝗼𝘀: Simple, automated. 𝗖𝗼𝗻𝘀: Relies on accurate forecasting and lead times. 𝟮. 🗓️ 𝗣𝗲𝗿𝗶𝗼𝗱𝗶𝗰 𝗥𝗲𝘃𝗶𝗲𝘄: 𝗕𝗲𝘀𝘁 𝗳𝗼𝗿:  Seasonal demand or fixed supplier schedules. 𝗛𝗼𝘄 𝗶𝘁 𝘄𝗼𝗿𝗸𝘀: Reviews inventory at fixed intervals, allowing for consolidated ordering. 𝗣𝗿𝗼𝘀: Potential cost savings through bulk orders. 𝗖𝗼𝗻𝘀: Requires larger safety stock, potentially higher carrying costs. 𝟯. ⚙️ 𝗠𝗮𝘁𝗲𝗿𝗶𝗮𝗹 𝗥𝗲𝗾𝘂𝗶𝗿𝗲𝗺𝗲𝗻𝘁𝘀 𝗣𝗹𝗮𝗻𝗻𝗶𝗻𝗴 (𝗠𝗥𝗣): 𝗕𝗲𝘀𝘁 𝗳𝗼𝗿: Complex manufacturing environments. 𝗛𝗼𝘄 𝗶𝘁 𝘄𝗼𝗿𝗸𝘀: Optimizes inventory based on production schedules and lead times. 𝗣𝗿𝗼𝘀: Minimizes waste, ensures timely material availability. 𝗖𝗼𝗻𝘀: Requires accurate data, can be complex to manage. 𝟰. 💨 𝗝𝘂𝘀𝘁-𝗜𝗻-𝗧𝗶𝗺𝗲 (𝗝𝗜𝗧): 𝗕𝗲𝘀𝘁 𝗳𝗼𝗿:  Businesses with highly reliable supply chains and precise forecasting. 𝗛𝗼𝘄 𝗶𝘁 𝘄𝗼𝗿𝗸𝘀: Receives materials precisely when needed for production. 𝗣𝗿𝗼𝘀: Significantly reduces carrying costs. 𝗖𝗼𝗻𝘀: Vulnerable to disruptions, requires close supplier collaboration. 𝘊𝘩𝘰𝘰𝘴𝘪𝘯𝘨 𝘵𝘩𝘦 𝘳𝘪𝘨𝘩𝘵 𝘴𝘵𝘳𝘢𝘵𝘦𝘨𝘺 𝘥𝘦𝘱𝘦𝘯𝘥𝘴 𝘰𝘯 𝘺𝘰𝘶𝘳 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴 𝘯𝘦𝘦𝘥𝘴, 𝘥𝘦𝘮𝘢𝘯𝘥 𝘱𝘢𝘵𝘵𝘦𝘳𝘯𝘴, 𝘢𝘯𝘥 𝘴𝘶𝘱𝘱𝘭𝘺 𝘤𝘩𝘢𝘪𝘯 𝘤𝘢𝘱𝘢𝘣𝘪𝘭𝘪𝘵𝘪𝘦𝘴. 𝗪𝗵𝗮𝘁 𝗶𝗻𝘃𝗲𝗻𝘁𝗼𝗿𝘆 𝗿𝗲𝗽𝗹𝗲𝗻𝗶𝘀𝗵𝗺𝗲𝗻𝘁 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆 𝘄𝗼𝗿𝗸𝘀 𝗯𝗲𝘀𝘁 𝗳𝗼𝗿 𝘆𝗼𝘂? 𝗦𝗵𝗮𝗿𝗲 𝘆𝗼𝘂𝗿 𝗲𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲𝘀 𝗮𝗻𝗱 𝘁𝗶𝗽𝘀 𝗶𝗻 𝘁𝗵𝗲 𝗰𝗼𝗺𝗺𝗲𝗻𝘁𝘀! 👇 >>>> ♻️ 𝙁𝙤𝙪𝙣𝙙 𝙩𝙝𝙞𝙨 𝙝𝙚𝙡𝙥𝙛𝙪𝙡? 𝙎𝙝𝙖𝙧𝙚 𝙞𝙩 𝙬𝙞𝙩𝙝 𝙮𝙤𝙪𝙧 𝙣𝙚𝙩𝙬𝙤𝙧𝙠 𝙩𝙤 𝙨𝙥𝙧𝙚𝙖𝙙 𝙩𝙝𝙚 𝙠𝙣𝙤𝙬𝙡𝙚𝙙𝙜𝙚! 𝘼𝙣𝙙 𝙙𝙤𝙣'𝙩 𝙛𝙤𝙧𝙜𝙚𝙩 𝙩𝙤 𝙛𝙤𝙡𝙡𝙤𝙬 𝙛𝙤𝙧 𝙢𝙤𝙧𝙚 𝙞𝙣𝙨𝙞𝙜𝙝𝙩𝙨 𝙤𝙣 𝙤𝙥𝙩𝙞𝙢𝙞𝙯𝙞𝙣𝙜 𝙮𝙤𝙪𝙧 𝙨𝙪𝙥𝙥𝙡𝙮 𝙘𝙝𝙖𝙞𝙣! #inventorymanagement #replenishmentstrategies #supplychain #JIT #MRP #procurement

📦⏳ Managing Expiring Materials: Best Practices for Inventory Efficiency In the fast-paced world of inventory management, handling expiring materials is crucial to minimizing waste and optimizing resources. Here’s how to tackle this challenge: 1. Implement a FIFO System First-In, First-Out (FIFO): Ensure that older stock is used or sold first. This can be facilitated by organizing your storage area so that newer stock is placed behind older stock. 2. Monitor Expiry Dates Inventory Management Software: Use software that tracks expiry dates and sends alerts when products are nearing expiration. Regular Audits: Conduct regular inventory audits to check expiry dates and rotate stock accordingly. 3. Accurate Demand Forecasting Historical Data: Use historical sales data to predict future demand accurately and order stock accordingly. Seasonal Trends: Account for seasonal trends and product lifecycles to adjust order quantities and avoid overstocking. 4. Optimize Order Quantities Economic Order Quantity (EOQ): Calculate the optimal order quantity that minimizes holding and ordering costs while meeting demand. Supplier Collaboration: Work with suppliers to adjust order sizes and delivery schedules based on your inventory needs. 5. Promotions and Discounts Clearance Sales: Run promotions or discounts on products nearing expiration to reduce waste and recover some costs. Bundling: Bundle expiring products with other items to increase sales and move inventory faster. 6. Reduce Inventory Levels Lean Inventory: Adopt lean inventory practices to keep inventory levels as low as possible without impacting service levels. Just-In-Time (JIT): Implement JIT inventory systems to reduce the amount of stock held and minimize the risk of expiration. 7. Enhance Supplier Agreements Flexible Contracts: Negotiate flexible supply agreements that allow for adjustments in order quantities and delivery schedules. Return Policies: Include clauses in supplier contracts that allow the return of unsellable or near-expiry products. 8. Employee Training Awareness: Train employees on the importance of managing expiry dates and the impact of expired inventory on the business. Procedures: Develop and implement standard operating procedures (SOPs) for handling expiring inventory. 9. Sustainability Initiatives Recycling and Repurposing: Explore options for recycling or repurposing expired products to reduce waste. Sustainable Practices: Implement sustainable inventory management practices that minimize environmental impact. By adopting these strategies, companies can effectively manage expiring inventory, reduce waste, and optimize their inventory management processes. 📦📊🚀✨ #InventoryManagement #SupplyChain #Efficiency #Sustainability #ContinuousImprovement #Logistics #FIFO

Safety stock plays a vital role in supply chain management by ensuring businesses can meet unexpected spikes in demand. Effective safety stock planning optimizes inventory levels to maintain service levels while minimizing excess stock, benefiting companies in various ways: - Reduces Working Capital: Optimizing safety stock levels helps reduce tied-up capital, freeing resources for other investments. - Improves Freshness: Lower excess inventory enhances product freshness, crucial in industries like food and pharmaceuticals. - Enhances Order Fulfillment Rate: Proper safety stock ensures customer orders are met, even during demand surges, boosting customer satisfaction. To achieve effective safety stock planning, businesses should focus on: - Demand Variability Analysis: Understanding demand fluctuations is key to setting appropriate safety stock levels. - Service Level Mix Optimization: Balancing service levels across the supply chain ensures the right amount of safety stock without overstocking. #SupplyChainManagement #InventoryOptimization #BusinessStrategy

In the intricate world of supply chain management, carrying costs often take a backseat compared to more glamorous metrics like order fulfillment and lead times. However, they are a crucial component that can significantly impact a company’s bottom line. 📉 What are Carrying Costs? 🤔 Carrying costs, also known as holding costs, refer to the total expense of storing unsold goods. This includes: 🔹 Storage Costs: Rent, utilities, and insurance for warehousing space. 🔹 Inventory Costs: Obsolescence, deterioration, and shrinkage. 🔹 Capital Costs: The opportunity cost of tying up capital in inventory rather than investing elsewhere. 🔹 Management Costs: Labor and administrative costs associated with managing inventory. Why Should We Care? Carrying costs can often be overlooked, but they play a pivotal role in: Optimizing Inventory Levels: Striking the right balance between supply and demand can minimize unnecessary expenses. Improving Cash Flow: Reducing excess inventory frees up capital for other strategic investments. Enhancing Profit Margins: Lower carrying costs can directly impact profitability by reducing overhead. Strategies to Manage Carrying Costs: Adopt Just-in-Time (JIT) Inventory: Reduces excess inventory and minimizes storage needs. Implement Inventory Optimization Tools: Use advanced analytics to forecast demand more accurately. Regularly Review Inventory Policies: Ensure your policies adapt to market changes and operational needs. By focusing on carrying costs, we can drive more informed decision-making, enhance operational efficiency, and ultimately contribute to a healthier bottom line. #SupplyChain #InventoryManagement #CarryingCosts #SupplyChainManagement 

Supply Chain Daily Supplement: KPI’s need synergy between them. Sounds straightforward but I find many businesses have their metrics conflicting each other. An example of this could be per unit cost for Procurement being directly affected by the buying group needing to have a low stock level on hand. This lowers the ability to gather these savings, just to achieve a just in time supply chain model. Is there something in contracts that can help overcome this? Sure but instead shouldn’t we understand that these work against each other and allow the teams to come forward with the best plan? What other KPI’s are in conflict with each other at your organization? #procurement #KPI #SupplyChain

The Power of Your Supply Chain! Are you ready to transform your business and boost efficiency? Let's delve into the world of supply chain management, where precision and strategy meet to deliver outstanding results. Before you can optimise your supply chain, you need a comprehensive understanding of its processes. Here's an overview of the essential stages of Supply Chain: 1. Planning: 📊 Demand Forecasting: Accurately predict future customer demand. 📦 Inventory Management: Maintain optimal stock levels. 🏭 Production Planning: Schedule production activities efficiently. 2. Sourcing: 🔍 Supplier Selection: Identify and select the best suppliers. 🛒 Procurement Processes: Manage purchasing activities effectively. 🤝 Supplier Relationship Management: Foster strong supplier partnerships. 3. Manufacturing: ⚙️ Production Processes: Streamline manufacturing operations. 🔍 Quality Control: Ensure product quality and excellence. 📈 Capacity Management: Maximise production capabilities. 4. Delivery: 📦 Order Management: Handle customer orders efficiently. 🚚 Logistics and Transportation: Optimise shipping and transportation. 🏬 Distribution Channels: Ensure products reach the right destinations. 5. Returns: 🔄 Return Processing: Manage product returns smoothly. ♻️ Reverse Logistics: Efficiently handle returns and repairs. 🌍 Refurbishment and Recycling: Promote sustainability through effective recycling. Understanding your processes and measuring your performance are critical steps in taking control of your supply chain. Enhance efficiency and customer satisfaction by implementing strategic improvements. Ready to revolutionise your supply chain? Contact me now to get started. info@demandmgmt.com or DM me. #supplychainexcellence #supplychain #dmsletschat

#Procurement isn't just about getting the lowest price. There are lots of situations where it's worth paying more to get #better_quality, #better_reliability, or #faster_deliveries because that could save you money on inventory and on rework costs. In the supply chain, we're always focused on creating value. And by analyzing the total cost for the things you buy, procurement plays an important role in #creating_value for the entire supply chain.

As supply chain disruptions continue to impact the manufacturing industry, the importance of taking a systematic approach to supply chain improvements is highlighted. However, instead of trying to tackle everything at once, a better approach could be to incrementally address issues, focusing on smaller changes to help manage cost efficiency and resilience. For example, the first step would be to gather data across all parts of your supply chain and then use the ABC system to classify inventory and create buffer stock. #thefreightarchitects #jaguarfreight #logistics