benefit Archives - Supply Chain Institute

The benefits of outsourcing to suppliers and contractors is clear, but the associated risks are largely unseen, and the breakneck pace of change and the pressures of financial reality can cause important, risk-mitigating considerations such as contractor safety to be overlooked – which could be not only an ethical disaster but a business disaster as well.

Choosing the right solution

Contractors and suppliers can provide many essential benefits to businesses such as expertise, efficiency, and cost savings.

In addition, companies working with contractors and suppliers can scale their business up and down depending on market demand.

The benefits of outsourcing to suppliers and contractors is clear, but the associated risks are largely unseen.

To add fuel to the fire, the breakneck pace of change and the pressures of financial reality can cause important, risk-mitigating considerations such as contractor safety to be overlooked – which could be not only an ethical disaster but a business disaster as well.

Contractors working on your site and suppliers providing materials should be considered internal employees.

If contractors are injured on the job, it can seriously damage your organization’s reputation and impede your growth.

To maximize the benefit and minimize the risk of these relationships, companies and their suppliers must commit to a common culture of safety.

This means companies need to stay engaged with their contractors beyond simply hiring them. Companies should:

Regularly collect information from their suppliers that demonstrate a commitment to safety such as incident rates (lagging indicators) and safety programs (leading indicators).

Continuously monitor suppliers’ insurance coverage to protect the company in case something does happen.

Audit worksites on a consistent basis to ensure that safety policies are enforced.

Monitor the condition of equipment that contractors use to carry out their jobs.

Ensure each contracted worker has the proper licenses and certifications to perform the job safely.

Provide site-specific training required for each position.

Read more at The Right Solution for Contractor and Supplier Management

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Note that this article was submitted and accepted by KDnuggest, the most popular blog site about machine learning and knowledge discovery.

I have been using Lean Six Sigma (LSS) to improve business processes for the past 10+ year and am very satisfied with its benefits. Recently, I’ve been working with a consulting firm and a software vendor to implement a machine learning (ML) model to predict remaining useful life (RUL) of service parts. The result which I feel most frustrated is the low accuracy of the resulting model. As shown below, if people measure the deviation as the absolute difference between the actual part life and the predicted one, the resulting model has 127, 60, and 36 days of average deviation for the selected 3 parts. I could not understand why the deviations are so large with machine learning.

After working with the consultants and data scientists, it appears that they can improve the deviation only by 10%. This puzzles me a lot. I thought machine learning is a great new tool to make forecast simple and quick, but I did not expect it could have such large deviation. To me, such deviation, even after the 10% improvement, still renders the forecast useless to the business owners.

Read more at How can Lean Six Sigma help Machine Learning?