SUPPLY CHAIN SERVICE STRATEGY

E d w a r d H . F r a z e l l e , P h . D . We have worked on a variety of Caterpillar projects over the years. I was in a Caterpillar distribution center a few years ago and noticed some new banners. One in particular caught my eye. The prominent banner read, “INTEGRITY: The Power of Honesty.” I was a little skeptical until the distribution center manager explained their metrics scoreboard. I noticed that their customer fill rate numbers seemed a bit lower than Caterpillar’s typical world-class performance. He explained that during their ERP installation their numbers had dropped. I said, “Aren’t you afraid that when your customers visit your DC they will see the lower numbers?” He explained that honesty is a more important aspect of supply chain service than fill rate. Honesty is good service! | 11

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