Supply Chain Secrets

THERE'S PLENTY OF ROOM for mistakes, delays, and cost overruns in the supply chain that stretches from raw materials to delivered product, as anyone involved in corporate logistics can attest. According to Pittiglio Rabin Todd & McGrath Inc. (PRTM), a Weston (Mass.) high-tech consultancy, differences in logistics costs between the best-performing company and an average company in one U.S. industry amount to 6% of the average company's total revenue.

To put more logic into logistics, PRTM helped form the Supply-Chain Council, which met for the first time in April. Among its 54 founding members are Amoco, Procter & Gamble, L.L. Bean, Bristol-Myers Squibb, Eastman Kodak, and Texas Instruments. The council plans to study and write up the methods that successful companies use. The "reference model" will be distributed free of charge to any interested company when it is completed, around November.

Even well-run companies should be able to pick up pointers from the reference model, says F. William Helming, PRTM's representative on the council. PRTM's co-organizer, Boston-based Advanced Manufacturing Research, will help such software developers as Germany's SAP incorporate the reference model into their supply-chain programs.

Before it's here, it's on the Bloomberg Terminal.