Supply Chain Overview Supply Chain Metrics California Computer manufacturer Cost per Placement Indiana Component plant of auto manufacturer Inventory Inventory Turns Annual Sales at Inventory Cost/Value of Inventory

Customer Service Line Item Fill Rate Order Fill Rate On-Time delivery Order cycle time Invoice Accuracy ….

Information to Customers Provide accurate information of delivery Get it there on time Provide up-to-date information in exceptions Preferably in advance

Information Internally Accurate and timely information easy to retrieve Short planning cycles Short forecast accurate forecasts

Manage Variability Identify it Eliminate it Hedge against it

Don’t Cover Up Don’t hide behind unnecessary inventory Why is it there? Is it necessary? Is it the right amount?

Understand the Cost of Inventory Cost of Capital Return on Assets Obsolescence Damage and Shrinkage Capital investments Location

Product Design Postpone differentiation

Communicate Know your customers’ customers Inform your suppliers’ suppliers

Coordinate Expediting costs money Avoid “hurry-up and wait”

Minimize Total Cost Freight Inventory Order processing Packaging Handling ….