Services Provided

PICO™ and the Supply Chain DNA


"Avicon Partners compares critical performance areas against other companies in a sector, and then reengineers practices to achieve optimal customer response at the lowest cost. The DNA analysis also examines a company's supply chain partners for opportunities to improve performance and cut costs. This framework is more effective than skipping from best practice to best practice, hoping for gains."
Dave Demers, Managing Partner, Avicon Partners
Avicon Partners enables clients to simultaneously optimize the three critical performance areas of cash-to-cash cycle time, profit margin and order-to-delivery response time and predictability.
Traditionally, supply chain models have sought the best balance among the three values as these outcomes are opposing forces. Avicon Partners helps clients create a supply chain design that can effectively address the opposing outcomes and optimize all three areas at the same time.
We do this by taking a more holistic view of the supply chain and engineer new models with four critical dimensions in mind: Process, Information, Cash and Organization (PICO™). These dimensions form the four support components of new supply chains, which require concurrent engineering to attain peak performance.
In addition, we understand the strategies and capabilities that distinguish supply chain leaders from their competitors. These strategies and differentiating capabilities are the supply chain DNA and are structured in the PICO™ framework. We've developed and refined this DNA framework based on our experience with industry and supply chain academic leaders.
We develop solutions for clients by selecting a unique blend of DNA building blocks and configuring them into DNA Solution Patterns to best suit the client's strategic needs. The resulting new supply chain drives the simultaneous achievement of customer response, working capital and margin velocity.


The New Gauge of Success: The Triangle Optimization Challenge
Response Time and Predictability:
Response time necessitates shorter lead times, and predictability entails on-time delivery ensuring customer growth and loyalty. The challenge is reducing response time and improving predictability without building excessive inventory. Avicon helps clients shift from building products to a forecast of future demand to a high-speed demand-driven model.
Profit Margin:
High-speed models enable business agility, allowing companies to focus their resources on enhancing profit margins, the second key outcome. With this improved flexibility, operations and financial managers can calculate and pinpoint specific products and services that can yield higher margins without the need for additional resources.
Cash-to-Cash Cycle Time:
Cash-to-cash cycle time is the financial measure of working capital. It essentially represents the amount of time it takes to turn a dollar spent with a supplier into a dollar received from a customer. High-speed models facilitate improved cash-to-cash cycle times by reducing days of inventory, reducing sales outstanding or controlling payables.
The key is the simultaneous optimization. For example, a company transforming to a build-to-order model will directly benefit from reduced inventory resulting in improved cash-to-cash velocity. However, the transformation effort must ensure that there is minimum impact to response time by this change. Avicon helps clients reach their goals by developing and implementing supply chain strategies. These strategies extend well beyond the traditional supply chain metrics and directly impact the company's Balance Sheet, Income Statement, and Cash Flow. And Wall Street rewards the companies who achieve this successful pursuit handsomely!

The PICO™ Perspective
In the past, supply chain transformation initiatives typically focused on one or two design perspectives such as process reengineering with a secondary focus on technology. Today, a fast-changing marketplace requires rapid, balanced solution design and greater internal and external partner collaboration. Avicon resolves this challenge by an approach that incorporates the concurrent engineering of the PICO™ dimensions. From an engineering perspective, this model simultaneously:
  • Speeds up the physical flows and core enterprise processes within and across the trading partner community.
  • Accelerates integrated information access, including near real-time availability and operational visibility within the enterprise and across the trading partner community.
  • Leverages speed and alternative cash engineering options to reduce cash-to-cash cycle time, release fixed asset resources, and lower operating costs.
  • Increases organizational capabilities to rapidly identify, collaboratively design, implement and manage high-speed solutions.
DNA Building Blocks
What distinguishes the new supply chain is a set of clear strategies and differentiating capabilities that separate companies from their competitors. The sample reference model for a company in the technology industry offers a closer look at the DNA building blocks.
Process DNA
Leaders invest in innovative ways to respond to demand in real time without relying on static inventories. Avicon ensures the tight integration of process steps from early participation in new product design, rapid conversion of materials to finished goods, collaborative supply chain planning, and flow-through logistics that reduces the reliance on traditional non-value adding warehousing activities.
Information DNA
Leaders invest in new capabilities that allow virtual supply chains to operate as though they were vertically integrated companies. Avicon integrates internal and external trading partners. The technology architecture then leverages the integration capabilities to provide visibility and execution management across the extended enterprise.
Cash DNA
Leaders invest in alternative cash engineering opportunities. We help clients determine the need for working capital financing, defining core and contextual competencies and outsourcing strategies. We enable real time flexibility to understand costs and use pricing as a lever to balance the variance of supply chain operations over time. We also help clients in gaining a better understanding of performance and execution management by developing effective scorecard strategies.
Organizational DNA
Leaders invest in new organizational capabilities to manage these new models. Avicon helps clients build the capabilities needed to transform the internal organization so that they can successfully manage inside and outside the company on a global basis. We help establish collaboration at all levels, both inside and outside the organization, align rewards and operational incentives within and across organizations and enable a culture that thrives on continuous business innovation.

DNA Solution Patterns
The composite set of DNA building blocks found in the reference model form a tool kit for the practitioner. Avicon helps clients in selecting DNA building blocks by fully understanding the competitive vulnerabilities as well as the ability of partners to effectively implement change efforts. Once these building blocks have been selected, they are implemented based on their configuration sequence. This configuration sequence constitutes a unique DNA Solution Pattern.
For example, within the process dimension, one key strategy is Fast Response and Lean Manufacturing, which requires the coordination of JIT/Kanbans, Setup Reduction, VMI, Build-to-Order, and Fewer Saleable items. To be successful, the strategy also requires Near Real-time Integration and Supply Chain Execution Visibility in the information dimension and appropriate Risk Management Contracts with suppliers in the cash dimension. Finally, no initiative can be successful without the appropriate Organizational Alignment and Change Management.


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