The four tiers of supply-chain performance

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There are four tiers of supply-chain performance, Rob O’Byrne – CEO and Founder of Logistics Bureau Group – explained to Logistics & Materials Handling. “If you imagine a four-tiered pyramid, at the bottom are the blissfully unaware,” he said. “These businesses really have no idea of their performance levels and what areas are ripe for improvement.”

Next, he explained, are the ‘comfortable’ businesses. “This is a dangerous place to be, as they have no desire or pressing incentive to improve,” O’Byrne added.

Then come the ‘best-in-class’ businesses, an internationally recognised term that applies to the top 20 per cent of performers.

At the peak, he said, we see what Logistics Bureau has dubbed the ‘Two Per Cent Club’ – the two per cent of businesses in each sector that not only provide the best service, but do so at almost half the cost of the industry average.

“Naturally, there are essential things that these Two Per Cent Club businesses do, that the others don’t,” explained O’Byrne. “First, they actively leverage the supply chain to boost service and reduce costs. Second, they have a laser-like focus on the key priorities that are clearly understood and agreed across the business. And third, in terms of supply-chain performance, they know what to measure and how.”

Supply chain education is a passion for O’Byrne, and each year he provides free mini education programs to share these tools and techniques with hundreds of people.

“In our management consulting work, we see a lack of essential supply-chain knowledge on a day-to-day basis,” said O’Byrne. “Knowledge that could easily boost personal, team and overall business performance.

“Helping to fill these knowledge gaps in our broader industry is the main reason behind our free supply-chain seminar series that we’ve been providing for almost 20 years. As well as a pleasant way to catch up with colleagues and friends, and provide some good industry networking, it’s a chance to share some practical and essential tips on boosting team and business performance.

“We genuinely enjoy sharing the things that are not taught within formal programs. The kind of things that would normally take decades of experience to work out.”

Find out more about Logistics Bureau’s seminar series here.