Customers expect perfection in service.
But what do our superiors expect?
For those among us who are supply chain professionals or managers, we answer to our employers, our superiors or bosses, the owners and executives who rule the enterprises we work for.
And as much as customers expect us to be perfect in serving them, our superiors expect us to be productive.
Supply chain management is a two-pronged job. Not only do we aim to perfectly fulfil the promises made to our customers and clients, but we also are expected to productively perform for our employers.
The complexity of supply chains doesn’t make it any easier for those of us who work in the operations side of the enterprise. We must be familiar with just about everything that happens because we are expected to. Our performance counts on it and it’s a challenge that we perform for two audiences: customers and superiors.
We aim for perfect fulfilment or perfect orders in the management of our supply chains. For our superiors, we shoot for productivity.
Productivity in demand fulfilment is about achieving results which lead to attainment of our enterprises’ strategic objectives. It’s about meeting goals we as operations managers have set and we have made ourselves accountable for. These goals usually fall under the four (4) priorities of the enterprises:
- Accumulating Wealth
- Gaining Competitive Advantage
- Getting a Good Reputation
- Growth in Influence
We promise our employers to be productive via the goals we set that shall support these priorities and their related strategic objectives. Being productive, therefore, is about making & keeping promises we make to our employers, bosses, or superiors.
Unlike the flagship metric of perfect orders that gauge how we perform for customers, productivity comes with multiple measures that cover the four (4) priorities of the enterprise.
The following are some typical key performance areas that determine how productive our supply chains are:
- Total Delivered Cost
Total delivered cost is the sum of all expenses and purchasing costs directly & indirectly related to the value of items at point of service to the customers.
- Distribution
Distribution is the spread, allocation, and availability of items and services in an enterprise’s target market.
- Risk Mitigation
Risk Mitigation is how well supply chain operations not only respond but also prevent incidences stemming from seen and unseen risks. Risk covers the areas of safety, security, and internal control.
- Responsiveness
Responsiveness is how supply chains not only react but also pro-act to change, especially towards adverse disruptions. Adverse disruptions not only encompass external events such as natural disasters or socio-political turmoil but also seemingly mundane issues such as changes in local laws and the rise of entrepreneurial upstarts competing with our products & services.
From these key performance areas, we formulate metrics tailored to our operations to monitor and measure how we progress towards supporting our enterprise’s overall objectives. The sum of all these measures and how they add up for the performance areas we deem important is how we then evaluate our productivity.
Productivity, unlike perfection in customer service, can therefore be complicated to assess especially if we put in too many metrics to measure and work against. The idea is to focus on those few areas our superiors believe are important and concentrate our efforts there.
Our superiors expect us to be productive in achieving what they see as important. That’s the reality we as subordinates must accept, just as much as we need to accept that customers demand we keep the promises of service perfection.
What do our superiors expect? Productivity in meeting goals. Nothing less.
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