Supply Chain

Pull the Speed and Productivity Levers to Boost Shareholder Value

Jan. 5, 2011

"We must do it quicker and better!" We hear this shouted a lot these days in the business world, but is it a realistic scenario?

It is realistic -- especially when it relates to how the supply chain can lead to improved operating margins. When you design business processes that are integrated, then your company naturally becomes speedier, more efficient, and holds potential for margin improvement.

I continue today with the fourth of a five-part series that looks at the supply chain mega-processes, Buy, Make, Move, Store, and Sell. (Based on a new white paper, Leveraging the Supply Chain for Increased Shareholder Value.) Here I touch on some of the key aspects of "speed and productivity" in reducing the cost of goods sold.

The Need for Speed

Increasingly, the economic focus is on "Total Delivered Cost" of goods rather than "Landed Cost." So, how do companies become quicker and smarter? Here are just a few tactics:

Supply chain benchmarking and leverage best practices
Develop strategic, tactical and operational supply chain action plans
Factor the supply chain into product development
Rationalize and strengthen supplier relationships.
Employ appropriate, current technology
Optimize distribution network(s)
Listen to the voice of the customer
Remain open to new ideas, such as designing modular and scalable operations/systems

Take the Productivity Challenge

Opportunities to improve productivity can be found throughout the supply chain, but the two most common areas are in direct labor and materials. Of course, the bread and butter of productivity is labor.

Take a good look at where your labor costs lie and compare it to productivity goals-- Is labor concentrated in the manufacturing plant? Is it in the call center, order fulfillment and/or customer service? Is it in the transportation fleet or in the distribution center?

Are you hearing more calls for "quicker and better" in your operations today? How are you meeting this challenge?

Jim
Tompkins Associates

About the Author

Jim Tompkins | CEO

Dr. James A. Tompkins is an international authority on leadership, logistics, material handling, outsourcing, and supply chain best practices. As the founder and CEO of Tompkins International, he provides leadership for Tompkins globally.

His 30-plus years as CEO of a consulting / integration firm and his focus on helping companies achieve profitable growth give him an insider’s view into what makes great companies even better. Listen to an interview of Jim Tompkins on the Business Leader Radio show.

As a high-level business advisor, his unique perspective prepares corporations and executives for the future.

To share his knowledge and provide up-to-date information on supply chain and business trends, he developed the GoGoGo! Blogand Global Supply Chain Podcast.

He has written or contributed to more than 30 books and eBooks, including Caught Between the Tiger and the Dragon, Bold Leadership, Logistics and Manufacturing Outsourcing, The Supply Chain Handbook, andNo Boundaries. Jim has been quoted in hundreds of business and industry magazines such as The Journal of Commerce, Supply & Demand Chain Executive, and FORTUNE, and he has spoken at more than 4,000 international engagements.

Jim has served as President of the Institute of Industrial Engineers, the Materials Management Society, and the College-Industry Council on Material Handling Education, and Purdue has named him a Distinguished Engineering Alum. He has also received more than 50 awards for his service to his profession.