If manufacturing companies want to know how involved their executives must be in the supply planning process, they should look no further than Finish Line. As PYMNTS.com reported, the athletic company implemented a new supply chain system in fall 2015. Glenn Lyon, the company’s CEO, gave a statement in which he said he expected the new system to increase customer satisfaction and prove incredibly beneficial over the holiday season.

Instead, Finish Line is closing stores and replacing Lyon. According to the company, although sales were still satisfactory, switching to the new system caused insurmountable delays. Stores couldn’t refill their shelves, and online shoppers were waiting longer for their purchases. Ultimately, Finish Line lost $21.8 million in the last quarter of 2015.

According to the Supply Chain Management Review, Finish Line implemented the new management system in September and began to see significant delays by October. The website indicated this timing was a critical mistake, as it coincided with the order-heavy, back-to-school shopping season and beginning of holiday preparations. If the company had given everyone involved enough time to learn the new process, it might have avoided such financial loss.

A good supply chain satisfied customers
As McKinsey & Company pointed out, the supply chain is ultimately responsible for customer satisfaction. Industry Week agreed, saying one failure in the system – whether that’s money, quality or information – holds up the rest of the chain and results in late deliveries and poorly made products. Thorough supply planning makes companies more competitive and brings them more customers. Therefore, it’s important for executives to be as involved as possible in the supply system.

A company’s supply chain should fall in line with its strategy and ideals, according to McKinsey. Members of each department should come together and devise a method that satisfies the business’s goals. If the supply chain is a large component of customer satisfaction, executives should consult with heads of the marketing department to find out what those customers ask for. Is delivery speed important? What about cost efficiency or innovation? With comprehensive marketing data, executives can make the best decisions as to which supply methods will be most profitable.

Manufacturers shouldn’t wait for a financial loss like Finish Line’s before improving their supply chain management. Executives at all levels need to keep a close eye on all aspects of their organization to ensure profit and customer satisfaction.

Want to learn more about supply chain management? Download the “Microsoft Dynamics NAV Supply Planning” white paper.

  • Book a Demo

    Microsoft Dynamics NAV - Solutions that Fit

    As a Microsoft Gold certified partner for Microsoft Dynamics NAV, DMS has spent years refining our project methodology to assist clients to become more agile, productive and profitable.
    Book a Demo