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OPS Rules Blog: Insights into Supply Chain and Operations Strategy

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Cultivating Integrators to Overcome Organizational Complexity

 
Integrator

In Capturing Value within Complex Organizations, we discussed at a high level how supply chain analytics and organizational techniques can be used to identify and capture hidden opportunities to reduce costs, cycle-times and inventory. The concepts are based on Six Simple Rules:How to Manage Complexity without Getting Complicated. Here we introduce the concept of (organizational) integrators and explain why they are so important to the change process but are often over-looked and describe techniques we use to encourage them to engage early and well in the planning and executing end-to-end transformation projects.  

What can you do about higher inventory in Pharmaceuticals?

 
Pharmaceuticals
For pharmaceutical companies the focus is typically on assuring revenue with the goal of one hundred percent fulfillment. Therefore, it is not surprising that pharmaceutical companies, and especially bio-pharmaceutical companies have much higher inventories than other industries. Yearly Inventory turnover is often below 2 and in some cases even below 1, meaning that the company in question holds a year’s worth of sales in inventory, which is an expensive and inefficient proposition.
Financial analysts often track these numbers to assess the health of a company, this assessment of Teva yearly turns is around 2 whereas for Taro Pharmaceuticals  they are evaluated at 1.5 turns. Other industries tend to do a lot better. Dell yearly turns are 32 and it is considered a leader in inventory management in the hi tech industry, Toyota has around 11 turns, in a somewhat slower industry. 

The following are six possible reasons for the high turns in pharma:

A Five Step Process for Current State Complexity Analysis

 
Complex DNA

Capturing Value within Complex organizations discussed at a high level how supply chain analytics and organizational techniques can be used to identify and capture hidden opportunities to reduce costs, cycle-times and inventory.  In this blog, we will review five techniques we use to understand why individuals and organizations behave as they do within complex organizations.

Capturing Value Locked up within Complex Organizations

 
Capturing Value Locked within Complex Organizations

OPS Rules has an active practice in helping companies reduce complexity.  Our standard methodology is to use analytics to identify gaps between current performance and efficient frontier performance and then to identify the strategy, policy, practice, process, data and organizational problems that are inhibiting performance.

Most popular OPS Rules blogs of 2014 – the power of analytics!

 
Top10 resized 600

Our team has been busy with various projects in 2014 and have reflected on some of the topics in blogs that have been well received by readers. They cover a wide range of operations topics that OPS Rules engages in focusing on innovative analytics solutions for inventory, revenue management, network design and supply chain complexity.

Network design modeling with Excel

 
Network Design in Excel Video

By Neil Fernandes and Tim Kachur. It is often said that the most commonly used supply chain software is Microsoft Excel. One can do almost anything with some knowledge of VLOOKUPs, PivotTables, and macro functionality. Supply chain software tools can offer advanced functionality well above and beyond Excel’s capabilities, but many business users still preferflexibility and simplicity.

iPhone 6: Apple Supply Chain Revisited

 
iphone 6 announcement resized 600

By Justin Wong and Tim Kachur. When the iPhone 5 in was released in September 2012, we commented on some of Apple’s supply chain capabilities.  Now that the iPhone 6 has been available for a few months, with a staggering 10 million units sold in the first week, let’s revisit the discussion to see what Apple has done this time around to ensure a successful launch.

Supply chain impact of West Coast Port disruptions

 
West coast port

By Tim Kachur and Zhiheng Ivan Xu.  East Asia is the primary manufacturing hub for products Americans use everyday: consumer electronics, clothing and appliances make the long journey by sea to major West Coast ports. Any disruption in this link would have disastrous consequences for the supply chain.  A 10-day lockout of West Coast ports in 2002 cost the U.S. economy an estimated $1 billion a day, and took half a year to clear up the backlog.  

Pay attention to retailers' inventory not just sales

 
Tshirts

As another competitive Holiday retail season kicks off, we are going to see the successes and failures of retailers dissected and analyzed extensively. While most of the focus is on sales revenue, it also important to take into account inventory. 

How to reduce data Complexity for Supply chain analytics

 
Bill of materials

By Haresh Gopalan and Jeff Keene. Supply chain analytics requires expertise both in the subject matter as well as in the tools. The challenges, in particular around data wrangling, require deep understanding of the pitfalls and opportunities.

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