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On-Time Delivery: The Measurement that Matters
By: Simon Kaye
Posted: November 2, 2011, from the November 2011 issue of GCI Magazine.
page 2 of 3
Information technology with trace-back capability is the essential performance measurement tool in the supply chain infrastructure. Such computerized tracking and reporting must give businesses along the supply chain a common platform for information exchange to capture, retrieve and report on shipment information and history at any stage. Furthermore, the system must be designed for flexibility, taking into consideration the highly varied documentation and quality requirements of multiple customs regimes and related national security concerns. Using electronic tracking systems is the comprehensive measurement standard at every supply chain link. It can save enormous amounts of time, energy, and resources and eliminate the high, hidden cost of supply chain inefficiency in load aggregation, route planning and fuel consumption.
From door-to-door service backed by visibility to critical KPI’s as well as customs clearance, storage and distribution, to a straight one-off transactions, supply chain tracking systems should provide seamless integration of what a shipper's customers want in light of their business requirements. That’s why customized approaches are needed to meet the complex supply chain requirements of leading beauty companies. With global sales well on the way to $400 billion by 2015, beauty products present one of the most complex global freight challenges of any industry.
Measurement of successful performance requires more than general logistics or freight forwarding experience. It requires a supply chain management mentality with in-depth logistics and purchasing knowledge as it relates to the global beauty industry itself.
Such an industry focus dramatically advances the performance paradigm and furthers a value proposition based on understanding freight requirements for beauty products. That involves specific levels of tailored, flexible service that can adapt as customer specifications evolve. The ultimate objective is efficiency: minimum downtime and as few obstacles to delivery as possible, complemented by maximum uptime as freight gets to where it needs to be. That is the ultimate performance measurement.
The use of the strategic management and measurement tools described here is the best way to make sure mission critical supply chain target measurements are met. Customs, security, technology and processing concerns all have been transformed in less than a decade. The beauty brand owner that is not transforming its logistics processes to meet these requirements, and consistently measuring how well it meets them, will have a dysfunctional sourcing and shipping effort that is a competitive disadvantage in the constantly changing global marketplace.