Home' MHD Supply Chain Solutions : MHD Jan-Feb 2015 Contents level of risk. Likewise, if highly skilled people are
leaving the business and the remaining talent
pool is low, then a turnaround or reinvestment
requires more thought. If the skill base is still
above a 'critical mass' level, then the risk of
reinvestment and turnaround are reduced.
The skill base of the supplier is especially
critical when you are considering outsourcing.
How can you truly satisfy yourself that their
promised skills exist in reality? Contact with
other customers in similar markets and
extensive site auditing are essential before you
decide to work with them.
9. Customer experience
How will the choice impact the customer
experience and therefore the customer
relationship? Unless the choice made can
confidently and logically result in an enhanced
customer experience in all areas, then we must
keep looking to enhance our solution.
Customers care about price, we all know
that. Low price and poor quality or availability
will soon have them screaming and moving
elsewhere. Our solution should provide
enhanced profitability for our business and
an improved experience (at least one of price,
availability or quality) for the customer.
Is there a hard and fast method?
Sadly, there is no hard and fast method. IRR,
NPV, Unit Cost all have flaws as a methodology
as they do not consider the risk profile of the
assumptions used in the calculations. The
Strategic Sourcing Matrix outlines a simplified
framework to look at the many issues involved
and provide a guide as to the style of solutions
that are directionally correct.
The most pragmatic approach is to pursue
all three solutions in parallel. Pursuing a
turnaround project is going to be worthwhile
in any significant sized decision. Major
reinvestment and outsourcing projects will take
more than nine months to explore, test, and
conclude. During this investigation period a
turnaround project can be executed, and the
results will be there for all to see, good or bad.
Trial sourcing and dual sourcing are
all valid risk-mitigation strategies before
fully committing beyond the point of no
return. Likewise for a reinvestment project,
significant site visits to previous projects and
highly competent project management are
When evaluating options, use integrated
cash flow and the global return on investment
to evaluate your decisions. Scenario analysis is
critical to qualify how sensitive your solution is to
changes in assumption.
In the end, you do need to make the decision
and you will not be able to totally quantify and
mitigate all the risks. Doing nothing is rarely an
option. You can choose to stay where you are or
choose to move...
...your time to choose is now!
Jason Furness is the CEO & founder of
Manufacturship. Jason's career spans over
20 years in manufacturing enterprises where
he has overseen the turnaround, transition or
transformation of many projects from single
production lines through to entire business
units of over 600 people as a general manager.
As CEO, Jason oversees the development
and delivery of the core Manufacturship
curriculum, leads the mentoring of
business owners and managers through
the core Manufacturship process, and
sponsors all Manufacturship client projects.
Several of these have been part of the
implementation of actions plans from
Enterprise Connect Business Reviews. For
more information call 1300 226 121, email
email@example.com, or visit www.
MHD SUPPLY CHAIN SOLUTIONS --- JANUARY / FEBRUARY 2015
ACCURATE & SCALABLE
Swisslog is helping online retailers around the world adapt to the
demands of eCommerce to manage their order ful lment process
more e ciently, consistently and cost e ectively.
Intralogistics Automation -- Design, Develop and Deliver.
To nd out more, visit our website or contact us on:
02 9869 5900
We will also be at the Online Retail Supply Chain Summit in
Melbourne from February 18-20.
SOLUTIONS FOR ECOMMERCE
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