Companies are in business to make money and a profit. In order to do both, company executives must be able to define performance measurements and have clear performance indicators. Performance indicators in the Supply Chain include:

1. Percentage of quality rejects.
2. Percentage of on time delivery to the customer.
3. Number of back orders.
4. Sales forecast accuracy.
5. Exception message performance measurements.
6. Inventory levels and turnover.
7. Total lowest cost.
8. Leadtime reduction.

Company's resources must work towards the same goals. Once the Key Performance Indicators are in place, people throughout the company will share the same vision and have overlapping common goals. Executives must share their vision and expectations to all levels of the company. Because the supply chain is a set of subsequent processes it is absolutely essential that excellent communication information exchange be maintained to effectively connect departments and goals. This includes Marketing, Sales, Planning, Procurement, Quality, Finance and Warehouse operations.

Change management requires that as the supply chain evolves, any departments affected by the change must be advised as early as possible in the change process. This assures that the best ideas are brought early to the table and that everyone is aware of why, how, when and where the company is adding value to the supply chain.

1. Executives must share their vision and expectations to all levels of the company.
2. Excellent communication is maintained to effectively connect departments and goals.
3. Departments affected by change must be advised as early as possible in the change process.

Master Data - It all starts here. The Master data process must insure that data input is 100% accurate and efficient.

Sales and Operations Planning Smoothing - The Sales plan will blow down to your demand affecting master scheduling, capacity, and subsequently MRP and Shop floor control.

MRP Exception Message measurements - Exception messages indicate that there is an exception to the MRP plan. After action has taken place the root causes must be addressed.

Component Shortage Reporting and Expediting - Weeks before components arrive procurement should be expediting vendors with a shortage report highlighting potential shortages. This can be linked to the exception messages. Overdue shortages should be communicated in weekly meetings throughout the supply chain so that each department understands the criticality and can make adjustments.

Inventory Reduction - Once senior management has defined inventory level goals then a number of tools can be engaged, for example using MRP exception messages to drive reduction targets and JIT techniques available in Schedule Agreements.

Capacity Planning And Capacity Optimization - Long term Capacity or detailed capacity planning highlights resource requirements for both shop floor machinery and manpower. Capacity planning compares requirements with availability, highlights overloaded work centres or shop floor sections and allows levelling to adjust the Material Requirement Plan and Shop Floor Schedule.

Shop Floor Schedule - The shop floor schedule can be derived from the detailed capacity plan and highlight shop floor priorities funnelled from all areas of the company including planning, R&D and engineering change management.

Procurement Contracts - The most interesting contract for the production environment is Schedule Agreements. Send your vendor the long-term MRP plan, allowing him to accurately plan future deliveries. First rate vendors and a stable MRP schedule are essential.

Vendor Evaluation - The top four vendor measurements should be quality, on time delivery, lead-time and cost.

Engineering Change process - Creating an engineering change in the system will create a valid-from date allowing long term planning across various types of master data. Changes will take effect automatically in all supply chain areas including MRP, BOM's, work centres and the shop floor.

Each company usually has their own set of project tools and documentation for IT/Process improvement techniques. The tools must be robust enough to accurately and efficiently support the steps of Project Preparation (Business Case, Budget, Executive Summary and Approval), Business Requirements Gathering, Design, Testing, Training, Rollout and don't forget Project follow up using specific Key Performance Indicators.

Another absolutely crucial project task is creating a process flow of the current Supply Chain processes and identifying key areas for improvement, precisely defining benefits, ROI (Return On Investment) and value adding. This road map is a major key to project success for any company.

It's also recommended that to accurately document during the project that you incorporate Japanese Poke Yoke (mistake proofing) techniques. Documentation free for all is a sure sign for project disaster. Mistake proofing techniques will minimize chances of error. Make the documentation instructions simple and clear.