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False Measures Of Supply Chain Success

By Art van Bodegraven | 04/23/2017 | 12:44 PM

We spend entirely too much time focused on the minutiae of supply chain performance, and most of the metrics involved are useless on a good day, and misleading when a lunatic OCD accountant is at the wheel of the bus.

So, we asiduously measure and report such trivia as transportation cost, inventory turns, headcount, supply chain cost as a per cent of revenue, and so on . . .

We have no clue as to the importance of supply chain investment and performance in such needle-moving outcomes as: customer retention, increnental sales, competitive position, profit margins, capital investment, return on assets (ROA), and return on equity (ROE).  Shame on us, operating in the murky dark of cost managment left iover from the last century, and blissfully unaware of that makes organizations succeed in an enlightened new century.

Always-astute Jeff Berman has seen through this twisted performance mis-fire; we need more like him to energize our collective understanding of failure, success, and watching the wring ball that characterizes too much of what we pay close attention to.



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About Art van Bodegraven

Art van Bodegraven

Art van Bodegraven (1939 - 2017) was Managing Principal of the van Bodegraven Associates consultancy and Founding Principal of Discovery Executive Services, which develops and delivers supply chain educational programs. He was formerly Chair of the Supply Chain Group AG, Partner at The Progress Group LLC, Development Executive at CSCMP, Practice Leader with S4 Consulting, and a Managing Director in Coopers & Lybrand's consulting practice. Concentrating in supply chain management and logistics for over 20 years in his 50+ year business career, he has led ground-breaking strategic, operational, and educational projects for leading US and global clients. Art was principal co-author of DC Velocity's Basic Training monthly column for a decade, and was the principal co-author, with Ken Ackerman, of Fundamentals of Supply Chain Management, the definitive primer in the field. His popular blog, The Art of Art, has been a staple of DC Velocity's web site since its inception.


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