A lean supply chain demands continuously seeking ways to eliminate waste and become more efficient. While not all professionals agree on universal best practices, many concur that there are “bad practices” to avoid.

Using metrics and benchmarking are crucial for supply chain success. But even finding the ideal benchmark for each segment of processing calls for deep soul-searching and analysis.

A new report from Best Practices LLC captures cost savings and productivity initiatives based on interviews with and responses from supply chain leaders at 27 top companies.

From the insights gleaned come these recommendations, summarized in an announcement of the report:

• Coordinate key metrics for synergistic cost saving effects and avoid seeking performance targets in isolation of one another;

• Work closely with key customers to develop performance metrics that drive process improvements;

• Use a system such as Radio Frequency Identification (RFID) to track products throughout the chain in real-time; and

• Implement vendor-managed inventory programs to drive inventory-carrying-costs down.

Supply chain managers are also well advised to beware of conflicting measures such as having a high fill rate but poor (i.e., high) inventory days on-hand measure.

In addition, Best Practices LLC notes:

Recent supply chain management trends include increasingly powerful private trading networks, increased transparency in measuring and monitoring the value chain performance, and outsourcing of non-core activities.

Of the 27 companies selected for this report, the industries profiled include manufacturing, automobile, chemical, energy and others. The researchers also interviewed executives and used online research from more than 100 additional more organizations.

While metrics and benchmarks make good sense for supply chain managers, they’re useless without practices or processes, as consultant Gene Tyndall has told Supply Chain Digest.

Whether best practices in one manufacturing plant are transferrable to another site or company depends on how similar their processes and operations are. Regardless of your preference for squelching the supply chain weaknesses or proactively initiating new ways to achieve greater leanness, it’s always worthwhile to consider the many ideas other supply chain managers generate.

Bad Practices
While supply chain managers may argue over what the “best practices” include, the professionals interviewed by Supply Chain Digest agree on eliminating the “bad practices.” Among the undoubtedly many bad practices, here are 10 from Tielman Nieuwoudt, a certified supply chain professional and managing partner at consumer goods training and consultancy firm HuBiri:

• Not understanding processes and systems and their impact on the supply chain;

• Not understanding which services or services aspects really matter to customers;

• Customer issues not visible to all supply chain partners in the network;

• Continuous improvements not taking place as supply chains evolve;

• Fixation on the revenue implication of each customer improvement;

• Management involvement lacking in the customer service process;

• Poor partner collaboration in the feedback process;

• Poor tracking and monitoring of customer feedback;

• Not understanding service cost and breakdown; and

• Poor attention to detail.

Related

How to Manage Supply Chain Collaboration

The Big List of Logistics Quick Tips

Developing a Lean Supply Chain (Successfully)

Resources

Supply Chain Management Best Practices
Best Practices, LLC, April 22, 2008

Beyond Off-shoring and Out-sourcing: Supply Chain Imperatives
Best Practices LLC, April 22, 2008

What is Supply Chain Management Best Practice?
by Dan Gilmore
Supply Chain Digest, Feb. 1 2007

10 Key Challenges for Supply Chain Customer Excellence
by Tielman Nieuwoudt
Hubiri, April 24, 2008