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Keys to Success - Supply Chain Design
Any new initiative is more effective with management support. And long
term, the need to align metrics and strategically set tradeoffs between service
level and cost for various customers does require high-level management team agreement. However, those who
have used Supply Chain Design find that initial financial results generally
convince executives quickly. Taking an incremental approach works best.
Get a quick benefit – In tight economic times,
projects must pay back quickly. Even when the upswing is underway, a proof of
concept or pilot will convince most skeptics that Supply Chain Design can
deliver major business benefits. Once committed, the project should generate
financial benefits in 90-180 days.
Phased roll out – There are multiple dimensions
along which Supply Chain Design can be introduced in a crawl-walkrun fashion.
All of these combined can create quick wins and many areas for momentum as you
roll out across the enterprise and supply chain.
• Systems integration – While the system needs data,
most companies start standalone and then integrate. Strategic decisions can use
snapshot data.
• Functionality – Supply Chain Design has several major areas
of functionality. Inventory optimization within a current structure can move
companies to the efficient frontier. Subsequent projects to change supply chain
configuration and strategy can improve the efficient frontier.
• Level & Frequency – As mentioned above, it’s best
to begin with strategic use, and move into tactical and operational use over
time as the organization gains confidence in Supply Chain Design – and as data
sources are cleaned up and integrated to allow short-cycle decision support.
The Supply Chain Design user community also grows from strategic through
tactical and operational use.
• Scope –Starting with one product, line or geography can deliver
significant benefits. Over time, companies expand to entire “edge-to-edge”
designs that encompass a functional group or division. Eventually Supply Chain
Design can include trading partners in a true “end-to-end” optimization
exercise. Supply Chain Design can be a quick-hit initiative that makes a supply
chain far more robust. The leaders have moved beyond strategic Supply Chain
Design, improving the effectiveness of daily, weekly, and monthly business
decisions. Those further along have changed metrics, strategies, and
relationships to improve corporate financial performance.
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