1. 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

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

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

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

5. Manage Variability
Identify it
Eliminate it
Hedge against it

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

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

8. Product Design
Postpone differentiation

9. Communicate Know your customers’ customers
Inform your suppliers’ suppliers

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

11. Minimize Total Cost Freight Inventory Order processing Packaging
Handling ….