How's Your Supply Chain Doing?

Lots of companies have put the squeeze on their supply chains, hoping to reduce cycle times, lower inventories, and cut costs. But are they measuring up?

Audit and tax firm KPMG LLP and software maker SeeCommerce unveiled a service this week to help companies assess how well their supply chains are performing financially and operationally.

The partnership is rolling out SeeRisk, a package that combines KPMG's experience in operations risk management and financial reporting with SeeCommerce's supply-chain performance-management applications.

"Back in 2001, we identified one of the big components of a successful supply chain was better visibility into the operations, but people really couldn't see what was happening upstream and downstream. There were no common metrics," says John Rittenhouse, national practice leader for operations risk management at KPMG.

Available now, SeeRisk is designed to help companies establish common metrics and measure performance against them. KPMG will conduct an operations assessment to uncover operational problems and risks. SeeCommerce then comes in and helps companies configure the performance-management applications to address the specific risks identified in the audit. The applications are linked with operational and transactional systems, such as financial software or supply-chain-management systems, as well as systems outside the four walls, such as a suppliers replenishment systems, so the apps can draw on and analyze data such as inventory levels.

The target is to improve revenue as well as reduce costs by increasing visibility of inventory, what's on the shelf, and what's downstream in production, Rittenhouse says.

The apps can correlate data, so an auto parts company could better understand why alternators and starters sell better in certain parts of the country during certain times of the year, says Jim Presley, senior VP of professional services at SeeCommerce. The applications can be tailored to deliver a variety of reports to meet the needs of individual users, such as financial executives or plant managers.

When preset business rules or quality metrics are violated or service-level thresholds are hit, alerts can be sent. That way, a company could be notified if there are a substantial number of faulty components in a product. SeeRisk could then calculate the implications the defective components will have on revenue, operating costs, what it would cost to start production over, and ultimately the effect on corporate profitability.