Reduce Risk in Your Supply Chain with Supply Chain Performance Management
- by William Newman, Managing Principal, Newport Consulting Group
- March 12, 2010
As part of its positioning for the corporate boardroom set of enterprise performance management applications, SAP BusinessObjects Supply Chain Performance Management enables full visibility of the value chain using metrics and indicators. Learn how to reduce risks in material and intellectual property flow in your supply chain and create a more effective organization using the features available in SAP BusinessObjects Supply Chain Performance Management.
SAP BusinessObjects Supply Chain Performance Management, as part of the enterprise performance management (EPM) solutions suite, allows you to quickly determine real-time changes to the flow of ideas, material, and products within your value chain, ensuring strategic alignment of enterprise operations based on a holistic and risk-based approach.
As a result of the financial crisis, operations managers around the world have reexamined their operating models and suppliers that participate in their business to achieve higher levels of cost and time efficiency. This reexamination, combined with an overall decrease in risk appetite, is difficult on many fronts as it calls into question old trading partner relationships and the habits that come with those relationships over many years.
Conventional management suggests reexamination built on the current business model to discover ways to make the business more efficient. In the post-crisis world, however, yesterday’s business model may not suit the forward direction of the organization. A fundamental discussion around effectiveness versus efficiency based on new realities is in order.
Unfortunately, for executives and management teams, it makes absolutely no difference if a company with poor operations is efficient. In fact, it can have catastrophic results when a company is simply executing a bad process more quickly or focusing on improvements in areas with little or no relevance to financial return. Figure 1 shows an example using manufacturers, retailers, and distributors in the grocery business. Important upside could exist for particular initiatives (such as perceived value in technology improvements) in one area of the value chain but to a lesser degree in others. Looking at broad, holistic improvements in the overall supply chain to drive effectiveness gains must address these disparate points of view across participating supply chain members.
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