SUPPLY CHAIN SERVICE STRATEGY

E d w a r d H . F r a z e l l e , P h . D . the supply chain. Our human nature runs avoids conflict and disappointing anyone. The very most mature supply chain organizations have learned how to deal with both in healthy ways. The supply chain service policy is a tool in their arsenal. Service Dimensions A supply chain service policy is like a contract between the supply chain organization and the customers it serves. Accordingly, the service policy should address the critical aspects of supply chain performance. Those include fill rate, response time, returns policy, value added services, minimum order quantities, consolidation, etc. We call those dimensions of service. Service Levels Our methodology determines an optimal performance target for each dimension of service, taking into account the financial and service implications of each. We call those optimal performance targets “levels of service.” We employ our algorithms and tools to determine the optimal level of service for each service dimension within each segment within each channel. High Tech Service Parts Supply Chain Service Strategy We were recently engaged by a global provider of semi-conductor machinery and parts. Their business, like most in the Silicon | 45

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