The test of supply chain performance
Answering these 12 questions tell more about your supply chain performance than nearly all benchmarks and audits that the market has to offer. This test should take about 5 minutes of your time.
- Can supply chain operate without Excel?
- Is ABC analysis regarded as obsolete?
- Is all relevant data documented by the supply chain teams?
- Do you record historical stock levels?
- Do supply chain teams monitor the quality of their data?
- Do you forecast lead times?
- Do you prevent any manual intervention on forecasts?
- Do you manage operational constraints, e.g. MOQs, as data?
- Do you quantify the cost of supply chain failures?
- Can decision-making systems be left unattended for a week?
- Can you recompute all decisions in one hour?
- Are all decisions prioritized against each other?
If your company isn’t answering yes to at least 10 of those questions, then, a supply chain initiative has the potential to deliver a sizeable ROI. If you don’t have 8 positive answers, ROI can be expected to be massive. If your company does not reach 6 positive answers, then, in our book, supply chain optimization hasn’t even started yet.
Read more about the Lokad test of supply chain performance.