A few critical traits characterize the high performers in the supply chain field, but one in particular stands out: Rather than dividing the supply chain up in different tiers, they master the use of analytical tools and platforms that turn the focus on end-to-end management, sometimes in real time.
The advent of such sophisticated analytical tools has helped bring all units together – from traditional functions such as manufacturing and procurement to novel approaches like information sharing and value-added activities – and enabled the most adept supply chain managers to uncover hidden risks and opportunities in unstructured data.
In the words of McKinsey, “these companies have redefined customers’ expectations of service and their ability to bring innovation to the market, turning their excellence in supply chain execution into a powerful source of competitive advantage.”
So where does your organization fit in? How close are you to achieving end-to-end supply chain visibility?
As supply chains keep growing increasingly complex and siloed, involving countless suppliers and regulatory networks spread across the globe, the art of managing the same has become a science. Managers are under pressure to meet customer demand for speed and accuracy while also keeping costs in check. Optimizing the workforce and improving forecasting and inventory management have taken on increasing importance in the cost-cutting quest – as has supply chain efficiency.
Most companies have invested in some degree of supply chain improvement, but, more often than not, there are issues:
- How integrated is your system with your suppliers and receiving information?
- Are your orders showing up on time? Are they accurate?
- Does this information translate into your warehouse?
- “Last mile” and human error remain significant hurdles.
- Are you working off real data or assumptions?
- Many systems assume that material counts and location are accurate and/or only catch up to reality during costly cycle counts.
- Inventory shrinkage is dealt with reactively.
The good news is that automation, Internet of Things, and cloud computing are breaking down silos and enabling internal and external collaboration and optimization. But again, technology alone, will not solve organizational problems. Only solid execution can. Leading companies know the supply chain is not mere logistics or a way to get products from A to B. By linking multiple business units and organizations to drive improvement, they achieve higher customer satisfaction.
Even if they have reached the top, they continue to evolve and reinvent their supply chains. McKinsey explains: “By doing so, they are able to manage risks; respond to changes in the economic, technological, and competitive environment; and exploit new opportunities more effectively than their competitors.” Their supply chains stand prepared to answer the “What if?” When each part of the chain works as a cohesive whole, an unexpected event naturally makes the rest of the units respond to absorb the impact.
Take this leading company in consumer packaged goods. The company has created a flexible network of supply chains and recipes for a brand of cleaning products. As the price of ingredients change, the network allows the company to swiftly switch to the most optimal path.
What steps do you need to take to gain full visibility into your supply chain?