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CHAPTER 3 Supply Chain Metrics: Measuring Up to High Standards Flashpoints
ОглавлениеStatistics are a vital part of managing a supply chain.
The smarter you are at measuring performance metrics, the better your supply chain will run.
Benchmarking lets you know exactly how good (or bad) your company is doing.
Keeping a supply chain scorecard will help you set and achieve attainable targets.
It's probably just a coincidence, but the rise in popularity of supply chain management occurred at the same time as the emergence of sabermetrics. No, you're not going to find that term defined in any business management journal; sabermetrics is the application of statistical analysis and research to the game of baseball. When personal computers became affordable in the early 1980s, supply chain analysts and sabermetricians alike fell in love with databases and spreadsheets that could crunch months' worth of product forecasts and decades' worth of box scores in minutes, rather than days. These days, “keeping a scorecard” is as much a part of the supply chain language as it is sports talk.
To paraphrase John Thorn, coeditor of Total Baseball, statistics are not just a cold-blooded means of dissecting profit-and-loss reports in order to examine a company's performance; rather, statistics are a vital part of the supply chain. The supply chain may be appreciated without statistics, but it cannot be understood without them.1
To continue the sports analogy, in the fall of 2018, the only event in which cosmetics manufacturer Coty seemed to be excelling was poor planning. Camillo Pane, Coty's CEO, had to explain why various supply chain disruptions cost the company $60 million in its latest quarterly report. Much like a beleaguered baseball manager explains away a loss by pointing to the team's failure to execute on a late-inning play at home plate, so too did Coty find a convenient scapegoat: He blamed it on the supply chain.2
Specifically, Pane singled out the problems Coty had in realigning its distribution centers in the United States and Europe after acquiring several dozen brands from Procter & Gamble. He also cited unanticipated product shortages at key suppliers. He even resorted to the time-tested standby of blaming the weather—specifically, on production interruptions resulting from Hurricane Florence. The distribution centers couldn't match the pace of the orders coming in. Pane didn't dwell on his role in acquiring the P&G product lines or approving the go-live dates of the distribution centers, much as a baseball manager tends to gloss over whether he rushed a player to the big leagues before he was ready, but within a week of announcing the supply chain disruptions Pane resigned.
Simply put, Coty was having major league problems fulfilling its orders. And Wall Street responded promptly, as Coty's share price dropped 22% when the disruptions were announced.3