Here is a relatively quick but challenging checklist you and the operations team should review to judge the health of your supply chain productivity. This list was noted by Mike Donovan. The key message is if you answer no to any of the below questions, or worse, do not even know the answer, it’s critical you take a look at the root problems immediately to improve profitability.
1.) Do your order fill rates meet management specific and measured customer service strategy?
2.) Are your delivery times predicable? Do they align with customer expectations?
3.) Do the different departments of your organization agree on which products are make-to-stock and made-to-order? Is there a common product focus known throughout?
4.) Do sales and manufacturing share equally in determining the mix and investment in inventory?
5.) Are the appropriate calculations being used rather than rules of thumb to establish desired mix and levels?
6.) Are managements inventory investment plan and customer service objections being compared to actual results? Do you have a baseline in which to compare and evaluate?
7.) Are short-term forecast deviations being monitored and adjusted, and is long-term forecast accuracy continuously improving?
8.) Is your inventory accuracy consistently above 98% to continually improve productivity?
9.) Are you able to avoid carrying excessive safety stock buffers?
10.) Are your excess and obsolete inventories being measured, and are they less than 1 percent of total inventory?