1. Does the Chain Enable Effective Differentiation Capabilities?
Consider, for instance, build-to-order (BTO) business models, which are used to support delivery of the mass-customization value proposition. The basic goal of build-to-order is to trigger the entire buy-make-ship cycle only when a clear demand signal is sent by a specific customer. BTO provides vendors and suppliers multiple avenues of differentiation by adjusting variables: the velocity of moving goods throughout the supply chain, exposure to inventory carrying and depreciation costs, higher volatility in demand, and transitions through product cycles.
2. Does My Supply Chain Facilitate Effective Order Fulfillment Capabilities?
Order fulfillment is the highest single cost of doing business and therefore offers a great opportunity to reduce cost and improve service. For instance, better consensus planning reduces errors that are often caused by multiple groups developing forecasts independently. The different functional groups involved in the supply chain have different priorities, and sometimes conflicting objectives. The classic example is the sales department that pads its forecast to ensure availability of a product, to the detriment of those trying to control inventory. Unless these conflicts are resolved, the supply chain can be whipsawed between extremes, resulting in increased cost and poor customer service.
3. Does My Company Have the Right Infrastructure Capabilities?
Creating a real-time SCM infrastructure is a daunting and ongoing issue, and quite often a point of failure for several reasons, chief among them being that the planning, selection, and implementation of SCM solutions are becoming more complex as the pace of technological change accelerators and the number of partners increases. SCM investments must be made surgically, while bearing in mind the existing ERP and legacy infrastructure. Large companies have already made the necessary investments in ERP systems to integrate functions such as purchasing, inventory management, production scheduling, and finance within the enterprise. The next step is to leverage ERP investments to integrate the functions and information of multiple enterprises in real time.
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