Case Studies
Increased Profit through Supply Chain Management
Many of today's companies are functioning with potential profit trapped within the organisation's supply chain.
Various operating systems, from communications to skills profiles, can contribute. If allowed to continue, not only is the profit potential wasted, but it becomes increasingly difficult for the company to maintain current performance. Staff often evolve and operate their own informal procedures and subsystems, which lengthen the supply chain, adding cost rather than value. Equally, there is no accountability for these processes. Individuals do not take responsibility for them, resulting in a decline in customer service.
The key to releasing trapped profit is through compressing the supply chain to remove non-value-adding activities and to increase profit margins at each stage of the chain.
Once trapped profit is recognised within a company, re-engineering is required, which may be unpopular. But the benefits certainly outweigh any potential objections. Compressing the supply chain leads to greater value with less cost added. In addition, shorter lead times, improved efficiency, reduced working capital, improved cash flow and increased profits will follow.
Critically, managing the supply chain in this fashion will improve the human resource within the company. Re-engineering procedures and the associated staff training requirement result in developed "capability" in both management and staff.
These individuals in turn become "centres of excellence" within the company, disseminating their expertise throughout the organisation, ensuring that new systems are maintained and deliver sustained and continuous improvement.
System 21 provides professional help in reviewing processes to identify how profit can be released. This includes analysing how well defined the corporate strategy is throughout the company; assessing the suitability of the company structure for meeting its objectives; ensuring the right people are in the right place and that they are accountable for the achievement of objectives; checking whether control systems add or subtract value to performance; and questioning whether processes need to change for the future.