by Steven Thacker and Artie Leslie (As seen in MHD Supply Chain Solutions)
Ingram Micro in Australia is part of the world’s largest technology distributor and a leading technology sales, marketing and logistics company. As a vital link in the technology value chain, Ingram Micro creates sales and profitability opportunities for vendors and resellers through unique marketing programs, logistics services, technical support, financial services and product aggregation and distribution.
Since its beginnings in 1979, Ingram Micro has connected technology solution providers with vendors worldwide, identifying markets and technologies that shape the IT industry. The business in Australia services over 7,000 customers with a range of nearly 15,000 SKU’s and annual revenue of AUD 2.5 billion.
In May 2006 Ingram Micro undertook to better understand its supply chain performance in meeting customer service expectations in its Australian businesses. In order to facilitate this project and to understand what best in class supply chain performance metrics were for similar supply chains, Ingram commissioned a supply chain benchmarking review utilising the services of Benchmarking Success. The primary tool for undertaking this comparative study was the SCAR supply chain performance measurement tool.
The results from the completion of this survey questionnaire and extensive report back from BMS revealed that from the entire database, a selection of 135 companies was extracted to form the benchmarking group on the basis that these companies exhibited the primary characteristics of the supply chain that most closely matched that of Ingram Micro. Paramount amongst these were:
- Large number of SKUs
- Very high incidence of split case picks
- Large customer base
- Very high service level expecations
- Relatively small order size
- Very high transactional levels
The comparative data was able to demonstrate, both holistically and at a detailed level, how the Ingram Micro supply chain was performing against the benchmark group and, very importantly, was able to highlight what the best in class performance metrics were that Ingram sought to achieve.
This formed the basis of developing a supply chain strategy based on gap analysis of performance and cost at that time to the sought after best in class targets. Indeed, this was the primary building block in being able to develop and articulate the three-year supply chain strategy with quantifiable targets and milestones.
Like any strategy implementation it takes time to implement. However, just over tow years into the program, many of the recommendations have been, or are being, implemented and there has been significant improvement. There is better visibility across the extended supply chain and customer service is more predictable in meeting their promises.
Ingram Micro is an example of how the BMS SCAR process can identify the opportunities and facilitate the improvement of supply chain performance by understanding your performance and how it compares with organisations operating similar supply chains. Furthermore, the understanding of the processes that best-in-class organisations use can assist in moving your business closer to this goal.