Knee-Jerk Reactions Won't Solve Supply Chain Woes

摘要

Due to global competition and new e-business strategies, the supply chain is getting more attention than ever before. But when glitches occur, the tendency of many companies is to implement quick fixes rather than take a close look at their processes. Consider the experiences of two companies. An aerospace company was desperate to cut costs, reduce cycle time, and improve quality. As part of its recently implemented TQM process, the company discovered direct labor accounted for approximately 10 percent of cost. Material costs were 70 percent, while overhead was 20 percent. Managers realized that instead of worrying about direct labor, they should be talking to their suppliers about cost, cycle time, and quality. The biggest quality problems and the parts with the longest lead times were associated with suppliers.