A fundamental of controlling and managing your supply chain is the ability to accurately measure activities, transactions, outputs and to attribute logistics costs to these. This means logistics data needs to be captured, processed and analysed to provide actionable insights for your supply chain management team.
Having good data enables supply chains to be modelled to aid understanding of the present ‘as-is’ network, its flows, processes, costs and performance. It also facilitates modelling of ‘to-be’ future scenarios in the support of business planning and budgeting.
Obtaining good quality supply chain data is often one of the biggest challenges in the projects Bisham gets involved in.
Here are 5 common issues we regularly see and help our clients to correct:
- Master data or BOM inaccuracies or gaps, which prevent accurate future state modelling, as physical weights, volumes and hence costs cannot be accurately assessed.
- Activity volumes misrepresented as KPIs – they are not, they are just the volumes that the business dealt with over a specific period. KPIs relate to performance measures such as productivities, conformance rates, cost per unit rates etc.
- KPI report elicits a ‘So What’ response. Do the KPIs being measured actually support management action in the priority areas or are you measuring the wrong things?
- Logistics costs in P+L are over-aggregated and not structured to capture costs at sufficient granularity, meaning other non-related costs are included and logistics costs cannot be attributed to specific activities.
- Cost saving numbers not anchored to the P+L account. This is an issue in 3PL contracts, where cost saving initiatives declare numbers that cannot be seen in P+L improvements.