Turnaround Time

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  • High-Yield Investment
    Posted by Elyse Moody 9:11 AM on Jun 30, 2010

    TeamSAI's Dave Marcontell threw out a tremendous figure yesterday during his Market Trends presentation. After the talk, I asked him to clarify the statement to be sure I heard him right, and later on in the day, another conference-goer told me that she was glad I asked because she thought she'd heard him wrong, too.

    Here's the proposition Marcontell set forward:

    A 2% investment in process improvements for supply chain efficiency can yield 2,000-5,000% more impact than a 2% investment in IT or HR.

    And here's why. Take a particular part, for example. Any supply-chain process related to it gets repeated thousands of times for similar class parts. A step-change in processes connected to this part, a small piece of the bigger picture, "can have a huge manifestation across the industry," Marcontell says.

    Of course, the largest opportunities to reap ROI from process improvements come on the front end of the supply chain, with OEMs and their suppliers.

    But still, he contends, a small investment in improving your supply chain -- and thereby other processes connected to it -- has bigger impact than an equivalent investment in personnel or IT, which do not extend beyond the walls of your facility.

    Tags: om99, ROI, supply chain

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