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Expert Insight: Guest Contribution

By Ramji Mani
Asst VP, Manufacturing and Logistics Vertical

Cognizant Technology Solutions

Date: July 28, 2011

Supply Chain Excellence: Overcoming Challenges to Establish a Framework for Measurable Success

Manufacturers, distributors and third-party logistics players are facing increasing challenges in developing lean, agile and efficient supply chains – while at the same time managing costs and meeting escalating customer expectations. To set the foundation for overcoming these challenges, building an efficient and effective supply chain intelligence infrastructure is a must. To fully realize the benefits available from process and technology breakthroughs, organizations will also need to realign their logistics performance measurement strategies.

Need for Performance Measurement Strategies


The total cost of logistics for organizations is growing as a percentage of sales due to increased complexity and a focus on controlling and managing costs. While logistics costs are typically cyclic, managing capacity and utilization has proven to be a differentiating factor for many of these organizations.

 

Speed is another essential factor in supply chain management. While real-time flow of information is shrinking cycle times and improving response to change, service providers need to be quick to identify market demands and refocus their efforts on more rapidly growing regions.  At the same time, identifying issues in stable markets and resolving them before competitors take away market share is of paramount importance. Declining market share and revenue could be due to multiple factors, and be disastrous if the mechanisms to capture and analyze data are not in place.


Limitations of Current Systems


Surveys suggest that while a vast majority of transportation and logistics companies have already deployed BI tools, less than half expect to deliver better and faster business intelligence. On the other hand, some operators still depend on outdated legacy applications and use independent applications to deliver analytics and generate reports. As a result, planners do not have a single view of the logistics chain and are not able to standardize reports.


Framework for Performance Management


All performance management systems have three fundamental ingredients, namely: metrics to illustrate real-time key performance indicators (KPIs), business intelligence tools designed to manage information and methodology for systematic and sustainable means of tracking, and measuring and improving business performance.


Cognizant’s Logistics Performance Management (LPM) framework helps organizations improve operational effectiveness by measuring the right metrics in a timely manner. Often, the implementation of LPM goes beyond just solution implementation and configuration and is also accompanied by organizational transformation. Process-centric management consulting along with technical systems integration is required for organizational alignment and effective change management.


Final Thoughts

To find out key trends in inventory optimization Cognizant partnered with Supply Chain Digest to survey leading executives on this important topic. The result is a must-read research report. Download your complimentary copy now: Five Strategies for Improving Inventory Management Across Complex Supply Chain Networks.

 

For more information on maximizing logistics performance and proper LPM implementation, download our complimentary report, Maximizing Supply Chain Performance in the Transportation and Logistics Industry.

Agree or disagree with with our guest contributor's perspective? What would you add? Let us know your thoughts for publication in the SCDigest newsletter Feedback section, and on the website. Upon request, comments will be posted with the respondent's name or company withheld.

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About the Author

Ramji Mani is responsible for providing consulting services across the consumer value chain and enhancing the value a customer gets with each interaction with Cognizant.

Ramji has 20+ years of consulting experience, with his core competency in SCM, Supply Chain Execution, Advanced Planning Systems and Logistics. He is an Engineer from University of Mysore and has a Masters in Industrial Engineering from University of New South Wales, Sydney.

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Ramji Says:


While transportation and logistics companies have already deployed BI tools, less than half expect to deliver better and faster business intelligence. 


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