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Supply Chain Checkup

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How do you know that you need help in the first place, though? Benchmark studies and process maps are both expensive and time-consuming, and many companies whose earnings put them well outside of the Fortune 500 realize that their supply chains aren't all they ought to be, but they are still hesitant as to what to do about it. Consultant Mike Donovan of R. Michael Donovan & Company offers a relatively short but challenging checklist that provides a basic assessment of how healthy your supply chain might be. If you answer “no” to any of the following questions, or even worse, if you don't even know the answers to some of these questions, then the time to get serious about fixing your supply chain problems is right now:

1 Do your order fill rates meet management's specific and measured customer service strategy?

2 Are your delivery lead times competitive and predictable?

3 Do all of your supply chain departments agree on which products are made-to-stock and which are made-to-order?

4 Do sales and manufacturing share equally in determining the mix and investment in inventory?

5 Are the appropriate calculations being used, rather than “rules of thumb,” to establish the desired mix and levels?

6 Are management's inventory investment plan and customer service objectives being compared against the actual results that are achieved?

7 Are short-term forecast deviations being monitored and adjusted, and is long-term forecast accuracy continuously improving?

8 Is your inventory accuracy consistently above 98%?

9 Are you able to avoid carrying excess safety stock buffers?

10 Are your excess and obsolete inventories being measured, and are they less than 1% of total inventory?15

Supply Chain Management Best Practices

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