Identify where systems constrain the supply chain design capability and optimise accordingly
As supply chain design becomes more global they have increased in complexity and uncertainty. Competitive pressures have pressed companies into slimming their own organisations, focusing more on supply chain value as well as putting pressure on suppliers to increase service standards. As a result supply chain professionals are under increasing pressure to deliver more from less. Lean supply chain design and optimisation has been the preferred philosophy, eliminating waste and delivering lower costs and higher efficiencies.
Continuous step-wise improvements in supply chain efficiency deliver those bottom line benefits every year but each successive step is harder and more expensive to deliver. Businesses and markets continue to develop and with this evolutionary improvement process it becomes harder to track the business needs. Business IT systems that have been essential to delivering operational efficiency now can become too rigid and restrictive. However more recently as market uncertainties grow and the visibility of real demand declines, supply chain professionals have recognised the need to shift from lean towards agile supply chains. And now the most recent philosophy is to seek to optimise the decoupling point, where product push meets market demand, in a hybrid strategy.
At this time the next step is to take a more holistic and fundamental look at the supply chain and consider a more revolutionary approach. An external and objective analysis of the supply chain will usually identify that the individual components of the supply chain are not correctly positioned and aligned. It can identify where systems constrain the supply chain capability. It can also allow the assessment of future scenarios to ensure that the business is both flexible and resilient to external changes but can also support internal change from business growth and investment.
How we can help
We help our Global Supply Chain clients by providing a range of tools and approaches to enable our clients to analyse significant amounts of supply chain data and convert it into simple but relevant models. Elements such as network design, manufacturing footprint, cost to serve, routing and mode selection can be employed in the assessment to allow a clearer understanding of both the capability and flexibility of the supply chain. Scenario planning allows various options to be tested under stressed conditions to ensure they remain robust and effective. Once the preferred solutions is identified then the most appropriate service providers have to be identified and contracted. The end solution may not be the cheapest but delivers the greatest value by balancing service and total cost, while retaining simplicity and practicality.
Typical Issues explored include
- Identifying modal breakpoints for a market entry growth strategy
- Supply chain integration and rationalisation following an acquisition or merger.
- Strategic and dynamic network optimisation.
- Matching supply chain capability to flow and variability
- Number, sizing and location of supply chain assets
- Selecting when to outsource, subcontract or insource logistics services
- Strategic procurement and tendering of third party logistic services provision
- Aligning contract terms and conditions