Why you need to look after the data in your micro business supply chain
If your data is accurate, relevant, current, useful and proportionate then it’s likely that your supply chain will be too.
A supply chain is just numbers. Probabilities, quantities, cubic dimensions, lead times, miles, delivery times the list is endless. ‘so if your data is not up to scratch then your supply chain probably isnt either. But what does a good supply chain look like?
I once managed a one million case per week distribution centre for a grocery retailer. One day all the picked orders were overspilling from the roll cages we picked into. This was quickly spiralling out of control as our load planning function used the data from the warehouse management system to schedule journeys to stores. The resulting overspill would lead to products being having to follow on a later vehicle unless we rectified the issue.
We soon discovered that a single promotional stock keeping unit (SKU) had been set up with the incorrect cubic data by the buyer. On further investigation we discovered that when this SKU was set up on the system the junior buyer had been told just to put one? in each of the dimension fields, as the system wouldnt let you leave it blank. The cost of this error was around 60, 000 on that one day as all the other distribution centres had the same problem.
If your people don’t understand why data is important they won’t be diligent in creating and maintaining it. Make sure you communicate the importance of good data and don’t leave it to chance.
How often are your databases cleansed and purged of data that is no longer relevant How many redundant SKUs are taking up space on your servers or costing you money on cloud based servers Similarly, when you are doing some analysis of your range and throughput how often do you have to filter out these SKUs, to make the data meaningful Keep your data files current and your analysis and data efficiency will be improved.
Useful and proportionate
There is a tendency amongst management to want to develop a new key performance indicator (KPI) for every issue that occurs. Many businesses Ive worked with have comprehensive KPI packs that allow the end to end supply chain to be broken down into its lowest common denominator. This is often the result of the packs being developed over a long period of time and more and more measures being added as the weeks go by so that the problem we had last Tuesday won’t happen again, and if it does well see the impact in this KPI.
Simon Dixon is the managing director of supply chain and logistics advisors Hatmill. He has worked in supply chain management for the past 19 years, both in industry and in consultancy. Simon's client experience includes the top four UK supermarkets and over 50 other clients spanning sectors such as construction and ecommerce.
Alun Morris, eSourcing expert at Wax Digital, looks at how eSourcing software can be used for more than identifying and evaluating new suppliers to get the best price, such as helping improve visibility of your supply chain as it grows. more»