Strategic Supply Chain Design

Designing a world-class Supply chain requires synchronized processes, cross-functional exchange and first and foremost a close integration of  the Supply chain design into the company’s overall strategy and objectives.

A key factor that is often underestimated as well as underdeveloped is the network management. Company executives across industries fail to realize how operational adjustments of e.g. a supplying company can affect their own operations. To show a practical example: If a supplier replaces a key ingredient to produce the product your company demands, it will affect the end product and with that your business. In a worst-case-scenario, your company cannot adhere to agreements with its own customers and might lose business.

But not only situations like this play a role in an insufficient management of a company’s network. In many client cases we have seen a large, fragmented partner network along the Supply chain.

As a result, nobody in the company manages to sufficiently orchestrate the network, build close relationships, identify synergies and drive cross-functional processes. Moreover, complicated network models lead to increasing complexity along the Supply chain, build boundaries between interdependent functions, slow down decision-making processes and obstruct developments to advance a company’s Supply chain to an agile operating system.

The basis for flowing processes along the Supply chain is an elaborated organizational framework. Key roles in Supply chain need to be broader than in the ‘classical’, outdated organization. A main reason is to give key employees a view on the big picture of the end-to-end process, rather than only focusing on a certain segment in the Supply chain. This organizational structure supports :

  • A group-based way of working as it breaks open functional silos and drives cross-department cooperation
  • A full understanding of the entire network and processes, to manage the Supply chain as an end-to-end system

An end-to-end view is not only necessary to align internal and external processes and manage the network.

It is also extremely important in order to satisfy ever-growing customer expectations, integrate disruptive technological innovations and tools like the Internet of Things or planning and forecasting based on advanced data analytics. Besides the constant need to adapt the Supply chain to emerging technologies, digitization of the overall Supply chain model is a key element to boost operational effectiveness.

A hands-on example is a digitally interconnected forecasting and planning system between a company’s Procurement department and the supplier. In a best-in-class set-up, the supplier would be provided with a precise forecast of which products are needed in which volumes, when and where. An effective method to improve forecast accuracy is demand sensing. Applied in a forecasting system, a retail company e.g. gathers point of sales data to improve its demand planning. Real-time information like product sold, quantity, date and time, region enables the company to source the required raw materials, ingredients etc. more efficiently. In addition to this demand sensing technique, which concers the tail of the Supply chain, the analysis of historical data is evenly improving the forecasting. Especially for upstream manufacturers analyzing data like sales history, open order history and current open orders is a proven demand sensing method to achieve forecast accuracy. As a result, operational efficiency, hence cost reduction increases on company’s side and supplier side.

We encourage our clients to widen their view beyond the economic success of the own business.

In order to stay ahead of the game and advance the own business to a sustainable operating system, it is key to include a lean, strategically assembled network of suppliers, logistics providers and cross-functional ways of working in the own operations into the Supply chain design.

We know how important it is to build a fully connected end-to-end-Supply chain model and provide all involved stakeholders with the necessary 360-degree-view. With our expertise in designing tailored Supply chain solutions, we strive to support our clients in forging and implementing hands-on, agile and future-ready Supply chain models – building the foundation to keep our clients’ businesses sustainably competitive.

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