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How do I Optimize Supply Chain Implementation?

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  • Written By: Bradley James
  • Edited By: Kathryn Hulick
  • Last Modified Date: 01 December 2016
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    Conjecture Corporation
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The most important aspect of optimizing supply chain implementation is defining the scope of the project. This will help to determine a time line for implementation. For instance, a simple process change may only require a one day roll-out, however, a complete overhaul of the supply chain strategy may take a year or more to fully implement.

Defining the scope will help to optimize the balance between cost reduction and quality in the fastest amount of time. It can also help to measure implementation progress over time. In order to optimize the speed of implementation and secure the best resources for the implementation team it is necessary to get management's buy-in. The best way to do to this is to connect the implementation of supply chain initiatives to corporate goals. This will secure executive management sponsorship for the implementation which can help speed up implementation efforts.

Senior executives are usually concerned about product life cycles, new product development, market differentiation, and cost containment. Key performance indicators (KPIs), are one way supply chain managers connect supply chain implementation goals to larger corporate initiatives. Examples of KPIs are lines per hour, cost per employee, or book value of inventory. KPIs help to identify gaps in implementation. Gaps in implementation are defined as steps in the process which are not beneficial to the overall corporate objective.

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Another commonly used measure that helps to optimize supply chain implementation efforts is return on investment (ROI). ROI helps implementation project managers to track costs along the supply chain implementation cycle. ROI also helps to find break even points which can be used as milestones along the time line.

The most common way to calculate ROI is by dividing the net income made from an investment by the investment cost. For instance, if you invest $10 U.S. Dollars (USD) and make $2 USD from the investment, the ROI is calculated by dividing 2 by 10. The answer is 20 percent. If the costs associated with supply chain implementation outweigh the expected benefits, the implementation effort should be abandoned.

One common mistake supply chain implementation teams make is not including and implementation specialist in on supply chain solution decision making or the creation of new KPIs. Implementation is a key consideration for medium to large scope projects. Therefore, implementation team members can lend considerable value in maximizing supply chain implementation efforts.

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