Integrated Value Streams

Given the many global supply chain challenges the manufacturing industry faces today, conventional advice to tackle such challenges often includes adding inventory, increasing lead times to customers, reducing the number of product offerings, and raising prices. Unfortunately, this “conventional advice” will likely result in customer dissatisfaction, pressure on your cash flow, and ultimately, reduced profitability.

As such, before taking “conventional advice” manufacturers should first consider:

1. How well do you understand your customers and their needs?
2. Does your knowledge of your customer translate into a successful approach to provide them with products and services, I.e., an effective operating system supported by aligned value streams?
3. How do you measure customer satisfaction and performance through your value stream?

Manufacturing companies measure a lot of things – sometimes too many things.  So, what is important to measure when evaluating the robustness of value streams? 

1. Customer-focused metrics – These may be internally generated or come from your customer.  No matter the source, it’s imperative to understand how your customer perceives your supply chain performance and knows you are constantly working to improve.
2. Supplier performance – Most manufacturers have supplier scorecards, but rarely do they measure on time delivery performance (the right product, at the right time, in the right quantities). 
3. Inventory levels – Don’t forget to look inside. Your overall inventory levels may seem fine, but if you have a bimodal distribution of product on hand (too little of some items, far too many of others), then you have a disconnect in your value stream.

Create an integrated value stream to offset global supply chain challenges

For those manufacturing companies facing growing consumer backorders, an inability to predict product availability accurately, unexpected or increasing inventory levels, or a bimodal distribution of inventory, these challenges may signal supply chain issues. To successfully tackle such issues, companies must create an integrated value stream that understands customers and builds an operating plan to meet their expectations. Doing so will allow for the elimination of conventional challenges, and generate customer excitement, and ultimately, create operational excellence.

Charles Clevenger | Principal | UHY Consulting

Charlie Clevenger is a principal in UHY Consulting with more than 35 years of industrial experience, including 20+ years of  executive level global experience in the areas of supply chain management, procurement, operations management, program management, and business leadership. He also has significant experience collaboratively integrating these areas into the overall business to optimize performance and financial results. Charlie has direct global business leadership experience, including Chief Procurement Officer, with organizational responsibility up to $9 billion and 500+ professionals.