Most supply chain applications that we work on have significant ROIs. But sometimes it’s hard to see where the return on investment will be coming from.
At Halo, we like to focus on the tangible benefits of improving your supply chain and how we go about producing hard number results. We’re all very well versed in the traditional areas to look for: cost structure; growth; and capital. Now let’s look at what’s really behind those.
Some of the areas we tend to focus on when developing an ROI for Supply Chain Analytics are:
- Cost reduction. We’ll find cost savings in people, reduced warehouse space, fuel, retained customers, and lower cost to serve.
- By providing timely analytics tied with a singular version of internal data truth and third party data, S&OP becomes an inherently more efficient process as forecasts reflect reality.
- Supplier score-carding. Developing KPIs for your suppliers and knowing good ones from bad ones seems like a business basic, it’s not. Sharing these scorecards with your suppliers, may make a few of them angry, but it will improve the quality and timeliness of your supplied products. And that saves you money.
- Customer score-carding. Almost the reverse of supplier scorecards. Sometimes a customer is just too costly to keep. Customers need KPIs applied to them as well. It’s for the good of the business as well as the good of the employees servicing that customer.
- Knowing the areas that your supply chain is vulnerable in provides you the ability to reinforce those areas and reduce your risk. From backup suppliers to weather disruption prevention, a little insight can go a long way.
These are just some of the many areas that derive increased value from supply chain analytics. Everyone has a supply chain. Successful companies are using their supply chains as a competitive advantage. Isn’t it about time yours did too?