SUPPLY CHAIN SERVICE STRATEGY

46 | R i g h t S e r v e ™ Valley, is subject to wild business cycle swings. At the end of the business rope, their supply chain suffered amplified swings. Their supply chain was continually out of phase with the business cycle, jerked around feverishly to speed up or slow down based upon the timing of the business waves. Those waves drowned multiple chief supply chain officers. We were retained by their COO to help them establish some steadying forces, and to devise a means of keeping their supply chain in phase with their business. One of the most steadying forces and phase-syncing mechanisms we have developed is the RightChain™ service strategy. The example in Figure 3.29 was developed for their service parts business. Note that this particular supply chain service strategy differentiates ABC customers and ABC SKUs yielding nine service strata. Fill rate targets range from 99% for A items going to A customers to 50% for C items going to C customers. Response times range from a low of 24 hours for A items going to A customers to a high of 96 hours for C items going to C customers. Returns permissions range from a high of 100% for A items going to A customers to a low of 0% for C items going to C customers. Value added services range from custom for A items going to A customers to none for C items going to C customers. Minimum order quantities range from zero for A items going to A customers to 1,000 for C items going to C customers. Consolidation options range from full customization for A items going to A customers to partial for C items going to C customers.