How Do I Sell The Value of Good Supply Chain Management ?

The Supply Chain gets products manufactured and distributed into the hands of the end-user. Often times the benefits of a good supply chain are overlooked until something goes wrong. It's like the offensive line in football. When things run smoothly, everyone looks great. When things break down, everyone notices quickly. However, the benefits of a good supply chain are more tangible than this. You just have to look at the right performance metrics to see the impact.

 Here's a riddle: What belongs to you but is mostly used by others?

The board is listening. How are you going to convince them?

Here are four tips on which metrics to highlight:

Sales Forecasts

This one is probably the most obvious measure. If you have a good responsive supply chain, the company can do a better job of keeping up with the market demands. This is not to be ignored. Businesses exist to make a profit. Make the correlation for them. For example, " Next quarter 's market demand is expected to increase by " x." Currently, our product fulfillment time is too slow to keep up with the stresses of this demand. We need to improve the infrastructure of our supply-chain to decrease the order fulfillment time. To do this, we will need to invest in " x" or outsource this function. "

The Data

Data is also your best friend. Show the board how much money the company is losing due to inefficiencies within the organization. This can be due to a variety or reasons. However, a common cause of this can be due to the organization performing a function that is not core to what it does best. If this function is outsourced, it could be done more efficiently.

The Value

Executives are judged on generating a good return on capital. Align these goals with the day-to-day deliverables of good supply - chain management. You need to explain what creates value in the supply chain. Have you heard of the Cash-Conversion Cycle? It's a performance metric that captures how fast an organization turns the investment into materials into revenue. An objective of any supply chain professional is to keep that cycle as brief as possible. Investing in Supply - Chain Management and effective strategies can reduce risk and the amount of capital tied up.

Emphasize the most visible aspects: Productivity

Cost savings will always interest shareholders. Show them how much more productive the organization will become by employing effective technologies and strategies.

Answer: An idea.

Plant the seed inside of the Board of Director's mind.

- RBW Logistics Team

Think Beyond Normalcy. Excellence is found within the details.