Supply Chain Consulting

Business Needs Analysis (BNA)

Arrow's Business Needs Analysis focuses on identifying areas in need of improvement through a process that maps your materials planning, acquisition, handling, and inventory management practices. We conduct on-site observations and interview key personnel from various departments including planning, purchasing, receiving, production control, manufacturing, finance, and MIS in order to get an in-depth understanding of your unique situation.

Our findings typically include an assessment of your current situation, opportunities for improvement, comparisons to best-in-class examples, and alternatives for making significant improvements. Final recommendations often result in the reduction of non-value-added activities, lowered costs, and improvements in operating efficiencies.

Based on our past analyses, we found that customers are often challenged with issues like these:

• Customers are searching for a way to reduce their materials overhead, increase turns, or reduce risk
• They want to be more responsive to sudden unexpected demand fluctuations
• Often, customers are looking for an effective process to identify redundancy and non-value-added activities in their operation
• They also need assistance evaluating appropriate owners and best-suited partners for outsourcing key processes within their supply chain

Total Cost Of Ownership Analysis

Arrow’s Total Cost of Ownership (TCO) Analysis employs activity-based costing in a format that allows you to identify and quantify the cost impact of supply chain processes and sourcing decisions. This allows you to truly understand your cost drivers and weigh the potential benefits of alternative supply chain models. It also sets the stage for a closed-loop performance review should a new improved service model result.

This objective analysis of your business cuts across all major departments involved in key supply chain processes. It considers both quantifiable cost elements and qualitative elements associated with direct materials and labor (such as management costs or the benefits of speed to market and flexibility improvements) as well as indirect costs and overheads.

An important aspect of the TCO process is a follow-up session to review the anticipated benefits of any changes. Recently conducted TCOs show that savings were concentrated across multiple areas. Increased buyer-planner productivity, reduced inspection time and stock outs, direct cost reduction as a result of price protection, and major savings in inventory carrying costs, are just a few of the areas exhibiting measurable improvement.

After the analysis is completed, Arrow’s local supply chain experts will review the data and suggest practical solutions. These solutions will be tailored and optimized specifically for your unique environment and organizational challenges.

• Improved service levels and customer responsiveness
• Reductions in materials overhead
• Reductions in risk
• Increased clarity regarding the selection of best-suited partners for the outsourcing of key processes within your supply chain

Value Stream Mapping (VSM)

Value Stream Mapping is the basis on which performance improvements can be identified, prioritized, and designed to deliver the greatest benefit.

Value Stream Mapping is an important tool used to document all key work flows and tasks necessary to complete a process, as well as associated key metrics including time and resources required. It is critical that a process be well understood in order for effective improvements to be identified. VSM is the basis on which problem areas are identified and prioritized, and ultimately designed to deliver the greatest benefit.

Just as activities that can't be measured can't be properly managed, the activities necessary to create, order, and produce a specific product which can't be precisely identified, analyzed, and linked together cannot be challenged, improved (or eliminated altogether (, and, eventually, perfected. In a Value Stream Map (VSM), activities fall into three categories:

1. Those, which actually create value as perceived by the customer
2. Those which create no value but are currently required by the product development, order filling, or production systems and so can't be eliminated just yet; and
3. Those actions, which don't create value as perceived by the customer and so can be eliminated immediately.

Inventory Modeling

This analysis is provided for customers to help them understand their inventory position, and identify areas to improve their position and reduce cost. A Pareto (ABC) Analysis is performed to identify the strategic areas to focus your efforts to reduce inventory and cost. High-runners (A-items) are considered for inventory reduction to achieve a reduction in working capital invested as well as inventory carrying costs. The strategy for B- and C- items is to minimize transaction costs. The overall objective is to optimize the materials management strategy to minimize total supply chain costs.

For more information on how Arrow’s EDI services can benefit your organization contact your local Arrow sales office at 1-800-777-2776.