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Supply Chain Design - Keys to Success

Keys to Success - Supply Chain Design Any new initiative is more effective with management support. And long term, the need to align... thumbnail 1 summary

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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