Supply Chain Playbook

Supply Chain Strategy

TASK:

• • Create an approach to creating a lean supply chain strategy by utilizing Group50’s Supply Chain Hierarchy of Needs™
  • Review supply chain strategies and validate that they support corporate strategies. Create one or modify existing strategy if necessary. Define strategic metrics.
  • Review supply chain objectives and metrics – Identify problem areas and improvement opportunities.
  • Assess Intelligent Enterprise – Control Tower initiatives and fit for use in enterprise

DESCRIPTION:

• The supply chain strategy defines the operational, structural and financial requirements to effectively and efficiently support the delivery of a company’s products and services: Quote to Cash and Raw Materials to finished goods. It should also define the future state of a company’s supply chain.

Strategic and Operating Gaps

TASK:

• Complete a supply chain assessment against best practices
• Conduct a Value Stream analysis of supply chain processes
• Conduct a SWOT analysis
• Identify strategic and operating gaps – Create plan to address gaps

Supply Chain Risk and Mitigation

TASK:

• • Conduct a nodal network analysis through multiple tiers and create a supply chain risk register
  • Review supplier certifications and assess risks: financial, geopolitical, regulatory, etc.
  • Identify upstream supplier risks
  • Identify financial risks and liabilities: inventory, tooling, contractual
  • Create a risk mitigation strategy for the company

DESCRIPTION:

• Resiliency is the ability of the supply chain to quickly respond to disruptions that are caused by global events, acts of nature, economic turmoil and other unforeseen impacts.

Supplier redundancy and sourcing

TASK:

• • Review supplier concentration risk and make recommendations on how to reduce risk
  • Model supply chain responsiveness
  • Assess supplier capacity and capacity to accommodate demand fluctuations

DESCRIPTION:

• Supplier diversification (both countries and suppliers) is an important part of mitigating supply chain risk. Risk is mitigated by having multiple options for the same products.

Multiple vs. single supply chains

TASK:

• Develop synergies between suppliers to reduce variation and risk

Working Capital Optimization

TASK:

• • Review working capital performance targets against corporate strategy
  • Assess process of forecast working capital requirements
  • Review excess and obsolete inventory and programs to reduce working capital
  • Assess tooling management, inventory and ownership
  • Assess inventory accuracy reporting

DESCRIPTION:

• The supply chain consumes the largest amount of working capital in a manufacturing and distribution company. It is important that companies minimize working capital to free up cash to support other business priorities.

Inventory stocking and replenishment points

TASK:

• • Review processes used to set Min/Max reorder points
  • Analyze set point effectiveness
  • Review lead times and replenishment processes

DESCRIPTION:

• Many MRP systems are not set-up correctly, providing the timely replenishment of raw materials

Inventory turns and expectations

TASK:

• Review delivery expectations and metrics
• Identify methods for increasing inventory turns
• Analysis of product and component lifecycle controls in inventory
• Establish programs for reducing lead times

Planning systems

TASK:

• • Review Sales, Inventory & Operational Planning processes: cadence, models used, management interaction, etc.
  • Review forecasting and planning models
  • Test planning assumptions against operational capabilities and actualization of the plan

DESCRIPTION:

• Planning systems are fundamental to the effective operation of a supply chain.

Financial

TASK:

• • Review Manufacturing P&L for performance
  • Identify problem cost areas and recommend solutions
  • Review inventory management systems and inventory accuracy
  • Perform a labor and material variance analysis
  • Review capital budgets

DESCRIPTION:

• Manufacturing financial performance provides insight to how well things are managed inside the value added portions of the supply chain

Manufacturing

TASK:

• • Perform a Lean Manufacturing Assessment
  • Review manufacturing strategic plan
  • Review key operating metrics
  • Assess effectiveness of manufacturing footprint
  • Review effectiveness of cost reduction programs
  • Assess the use of Six Sigma and Continuous Improvement tools in manufacturing
  • Assess the use of technology in managing manufacturing operations
  • Assess the supply/demand flex capacity for each manufactured product
  • Identify levels of automation and opportunities to improve
  • Complete a facility utilization assessment
  • Review environmental reports if they exist
  • Assess the effectiveness of work stations, work cells, assembly lines and material flow

DESCRIPTION:

• Group50 has a 200 point lean manufacturing assessment that looks at best practices across all supply chain operations

Material management

TASK:

• Push / Pull analysis of manufacturing
• Perform a material flow analysis in each factory
• Assess use of best practices for material management – KANBAN, Bar Coding, WIP management, etc.
• Perform a housekeeping audit

Equipment

TASK:

• Review capital budget forecasts
• Assess quality of maintenance function and use of predictive failure techniques
• Assess equipment condition – Downtime reports
• Review equipment utilization reports and operational equipment effectiveness (OEE).

Performance

TASK:

• • Review Purchasing Strategy
  • Review supply chain metrics and assess performance
  • Review purchasing processes and procedures documentation
  • Review use of buying programs – Pooled buying, use of auctions, etc.
  • Assess lead times and make recommend improvement
  • Assess processes and cadence for requoting components
  • Assess cost effectiveness of MRO management
  • Identify processes used to validate regulatory compliance
  • Review purchase order processes
  • Review Terms and Conditions
  • Assess contract management effectiveness – may include legal reviews of contracts based on geography and rule of law.
  • Vendor collaboration metrics

DESCRIPTION:

• Purchasing plays a pivotal role in the cost effectiveness, resiliency and scalability of the supply chain.

Supplier management

TASK:

• • Review Key Performance Management Metrics – Identify gaps and improvement programs
  • Perform a total cost of ownership analysis
  • Review supplier certification and onboarding processes – establish cadence for reviews
  • Assess methodology and cadence for management review of KPI’s
  • RFP & RFQ process review
  • Push / Pull analysis of supply chain
  • Assess the utilization of vendor subject matter experts

DESCRIPTION:

• Most companies do not leverage the complete capabilities of their suppliers with an effective review and integration process

Warehousing and inventory management

TASK:

• Review warehouse utilization metrics
• Review methods and standards for warehousing
• Assess inventory accuracy
• Identify VMI programs and opportunities
• Review programs for supporting replacement parts during each product’s life cycle

Distribution centers

TASK:

• Review efficiency and cost of DC footprint
• Identify operating gaps in DC performance
• Review operating KPI’s
• Assess DC capabilities and scalability

Logistics strategy (internal, 3PL to 5PL)

TASK:

• Review Logistics Management – Shipment tracking, Distribution, Order Fulfillment, use of 3/5 PL’s, etc.
• Assess integration to logistic networks
• Review opportunities for shipment consolidation

Systems Utilization

TASK:

• Assess technology utilization
• Understand quality of item masters
• Assess effectiveness of MRP utilization

Engineering

TASK:

• Assess effectiveness of document control
• Use of standardized vendors
• Report on the effectiveness of the utilization of supplier capabilities to support NPD and R&D
• Assess effectiveness of revision control and life cycle planning
• Establish effectiveness of Make vs. Buy programs
• Assess the utilization of Engineering BOM’s and interaction with purchasing in new product programs – Stage Gate Process

ERP, EDI, MRP, Etc.

TASK:

• • Complete a supply chain technology systems inventory
  • Perform a capabilities review – technology and people
  • Create supply chain systems architecture
  • Identify gaps in technology
  • Identify shadow systems
  • Assess data reliability
  • Review reporting capabilities to support KPI’s, visual management, etc.

DESCRIPTION:

• Match the maturity of the organization infrastructure and processes with the supply chain

Create a future technology roadmap

TASK:

• • Assess the applicability of new technologies – Blockchain, IoT, AI, Machine Learning, Warehouse Automation, etc. – Include addressing operating and strategic gaps in the roadmap

DESCRIPTION:

• Emerging technologies make supply chains more efficient and automate the management process

Visibility – Business networks – Nodal maps

TASK:

• Assess systems for tracking PO’s, follow-up actions, shipping status, etc.

Supply Chain Quality Management

TASK:

• • Review Quality manual
  • Asses supplier certifications – quality systems
  • Review auditing processes and procedures: suppliers, in-process, finished goods
  • Review supplier scorecards and performance to SLA’s, service levels, quality, etc.
  • Assess effectiveness of management review process
  • Review quality performance
  • Assess utilization of Lean/Six Sigma techniques
  • Review RMA systems
  • Assess effectiveness of Corrective Action Systems (CAS)
  • Validate quality certifications (ISO9000, etc.)
  • Assess capabilities to integrate Voice of the Customer (VOC) into quality improvement programs
  • Review programs to improve business processes using core tools such as Value Stream Mapping, etc.

DESCRIPTION:

• Quality Control and Quality Assurance are corporate risk mitigation functions. Robust quality systems are important to risk mitigation.

Contractual quality processes

TASK:

• Assess effectiveness of flow down of requirements and tools for managing quality
• Assess order fulfillment expectations and roll down

Material Review Board (MRB)

TASK:

• Review of supplier related quality issues
• Review use of Corrective Action Systems: Accountability, timeliness
• Assess systems to manage component warranty management to supplier assessment

Structure

TASK:

• • Review reporting lines and management

DESCRIPTION:

• Organization structure and capability is critical in the effective management of a supply chain and utilization of supply chain technologies.

People

TASK:

• Assess skills and capabilities
• Develop a supply chain skills map
• Review turnover rates by employee category
• Assess union relations (if a union exists)