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OPS Rules Blog: Insights into Supply Chain and Operations Strategy

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Does your inventory support your Service levels?

Service Level

By Mark Wahl, Jeff Keene, and Haresh Gopalan. Inventory optimization is one of the most important components of managing a supply chain, and in most complex supply chains can be an incredibly difficult problem.  A key measure of supply chain performance related to inventory management is service level or fill rate.

Industrial engineering and the inception of "supply chain"

First use of supply chain

By Haresh Gopalan and Billy Hou. Supply chain management has come a long way and nowadays, companies run increasingly complex operations systems and deploy analytics which run in minutes to make sophisticated decisions. We owe this to the engineering discipline called Industrial engineering which deals with the optimization of complex processes or systems and has had a large influence on supply chain and operations in the last three centuries.

3 Pitfalls to implementing Supply Chain Analytics

Data entry resized 600

In the last few years, companies have realized the importance of data-driven analytics for operations and invested significant resources to develop these capabilities.

FAA Facility Fire and Supplier Risk Management

O%27hare planes resized 600

Last Friday, two of the busiest airports in the US, O'Hare and Midway, were closed down due to a fire at an FAA facility in Aurora IL. Delays and cancellations rippled through the air-travel network from coast to coast after the fire. By late afternoon, about 1,950 flights in and out of Chicago were canceled.

Seven Benefits to Flat Supply Chain Costs around the Optimum

Plant rationalization

End to end optimization provides a way to take into account tradeoffs in the supply chain. These are typically between cost and service taking into account many factors that influence the design and flow of the supply chain. The advantage of taking an optimization approach is that provides a "what's best" solution that can help reach the efficient frontier thereby reducing costs while maintaining service levels.

Can you trust supply chain analytics with imperfect data?

Schneider Electric, Case Study Schneider Electric, End-to-end optimization, inventory optimization

Data-driven decision making is all the rage with the wide-range availability of data and analytics methods to glean better associations, predictions and recommendations. But one of the challenges is still matching the data available to the one needed for analytics. A recent New York Times (NYT) article on the challenges of data wrangling noted that  “Data scientists, according to interviews and expert estimates, spend from 50 percent to 80 percent of their time mired in the mundane labor of collecting and preparing unruly digital data, before it can be explored for useful nuggets.”

The Supply Chain Benefits of Postponement


By Neil Fernandes and Mark Wahl. We have been taught from early on that postponing things is a bad idea and are told not to delay things until the last minute. In the supply chain world however,

How CPOs deploy Supply Chain Analytics

describe the image

We recently described how Supplier Risk is changing the role of the Chief Procurement Officer(CPO), and provided reasons why CPOs today do more than just negotiating good deals and tracking supplier performance. 

When is it a good time for supply chain network design?

Oil prices LNP chart

It is often said that 80% of the cost of a supply chain is locked in its initial design, see Dan Gilmore’s discussion. In a similar spirit, it can be argued that 80% of a supply chain’s responsiveness, tolerance to risk, and efficiency is likewise locked in the initial design of the network. The implication of this widely recognized truism is, in short, that the more flexibility a firm has in its supply chain the greater the opportunity it has to discover better alternatives to its current supply chain network design.

Supplier Risk is Changing the Role of the Chief Procurement Officer

chief procurement officer

The article, "Companies are looking more towards their Chief Procurement Officers for a supply chain revolution" caught my attention as it summarizes succinctly what is now becoming a more important role and significant transformation in the way companies are managing their suppliers and their supply chain.

Traditionally, the role of the Chief Procurement Officer (CPO) has been a secondary one compared to others in top management. It was mostly limited to negotiating good deals and tracking supplier performance. Increasingly, however, the role is being seen as more valuable and central within many companies. In particular, the CPO is now accountable for supplier risk not only on the first tier but often on the second and third tiers. In particular, large multinationals are rethinking the way they manage and rationalize their supply chains and the way they can manage risk more centrally and strategically.

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