Aligning business rules and performance goals (1/2)

The Supply Chain Standards for Operational Excellence

The SCSOE metrics have been developed over time throughout decades of operational experience within the biopharmaceutical supply chain management and alignment with the key metrics that nurture alignment between business, operations and performance goals. The asseveration “What is not measured, cannot be improved” remains always the same. And this is even more valid for SCSOE.

First, it is critical to define the processes which need to be evaluated and make sure that they are consistent with world-class performance and industry best practices. These processes should be detailed enough, reviewed and updated on a frequent basis, and should reflect on the business objectives. Once your operations are running and you start harvesting data, it is time to design your metrics according to four different purposes:

Diagnostic

The aim is to identify a specific problem which will lead to a CAPA (Corrective Action Preventive Action). Most of the metrics calculation include the capability to analyze and understand the root causes to result into immediate improvements. Some don’t, like “inventory turn” which will not support finding what caused the issue. This is why you need a complete set of SCSOE metrics to identify and then improve the case.

Prognostic

When the performance of the metric points out directly to a process problem. For example: the fact that many orders are overdue could indicate that manufacturing is delayed, or a lack of timely reporting, or that the planning department is not duly rescheduling as per instructions. In this case the CAPA may imply additional training or on the refinement of people accountabilities.

Contextual

The metrics need to be kept in the context of your operations. One metric on its own could be meaningless if not contextualized with other sub-metrics or complementary measurements. We need to look at all the metrics together including the quality of the data, the quality of the plan and its execution to understand the entire picture and then draw conclusions.

Precautionary

Here, the objective is to identify as early as possible to avoid being confronted to a major problem which will require heavy resources to be resolved. The earliest the signal of a deviation is capture and is visible, the best it will be. In this case, speed and reaction time are the critical success factors.

Setting up SCSOE for your company requires teamwork across functions and a very deep understanding of the internal processes as well as external factors which needs to be measured and at which frequency. The challenge of improving productivity of the end-to-end supply chain is to map & master the links along the value chain and build comprehensive dashboards which can be easily interpreted to spot deviations. Moreover, the dataset should allow drill-down capability to perform root cause analysis in a timely and qualitative manner.

Not to make you afraid, setting up your SCSOE will require considerable time and effort. This is not a one-time exercise but rather a cultural mindset to be brought in your supply chain organization. Such investment will pay off over time. Good luck in this journey.

Fell free to contact us, for a deeper understanding on how our supply chain excellence experts can support you.