Digital Transformation

Thursday, 16 July 2015

To become the best, you need to learn from the best (Supply Chain Mgmt)

When looking at improving supply chains, companies should not just look within the own industry for ideas and best practices. In fact, many excellent models, approaches and methodologies can be found across industries.

There are some key companies that come to mind when striving for excellence in the supply chain. Gartner’s 25 top supply chain company list provides a first good start.

Each of these companies does some or many good things right. Those practices can be brought back to the own organization and customized to the specific needs and circumstances.

Apple: Vertical integration through strategic acquisitions; investment in manufacturing tooling & equipment to ramp up and automate production.

McDonald’s: Collaborative planning and inventory management downstream and upstream.

Amazon: Attempts to take over management of the last mile and direct delivery to customers. Locker return services in metropolitan areas.

Procter & Gamble: Small batches of products and packaging using leading-edge multi-material 3D printers.

Cisco: Acquisition & Integration expertise.

Intel: Vendor-managed inventory solutions and collaboration on products, operational efficiency and agility resulting in world class customer satisfaction. Advocacy on conflict minerals.

Zara: Rapid prototyping and time to market for new products; maximized fulfillment speed for trendy and seasonal products.

Walmart: Center of Excellence to identify isolated local supply chain innovations and spread them globally.

PepsiCo: co-planning with retailers to manage event-based promotions down to very specific location-product-timing combinations. Using digital marketing signals to monitor and shape consumer demand patters.

Nestle: Customer centric supply chain.

What are your thoughts?

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Key current trends in Supply Chain Management

A number of key trends are becoming notable related to supply chain management:

Future supply chains must seamlessly integrate the digital and physical worlds of customers, partners, suppliers and other key stakeholders.

Supply Chain management gains increasingly strategic importance and functions as value driver.

SCM helps mitigate decisions and fund allocation across business functions.

Increased vertical integration takes place where companies get into their customers’ and suppliers business to dominate value chains and redraw lines of competition.

CSR and Sustainability evolves from an add-on/ nice to have to a crucial business necessity (license to operate, branding, risk management, cost-efficiency, new business opportunities/ additional revenue, etc.)

The value chain becomes demand driven and combines Supply Management (Manufacturing, logistics, supply planning and sourcing), Product Management (R&D, engineering and product development) with Demand management (marketing, sales, demand planning and services). This system of technologies and processes senses and responds to real-time demand signals across a supply network of customers, supplier and employees.

Operational Excellence (Key metrics: perfect order rates and total supply chain costs) and Innovation Excellence (Time to value and return on new product launch) a key success drivers for supply chain management.

The Hierarchy of Supply Chain Metrics: Operational Excellence

Hierarchy of Product Metrics: Innovation Excellence

What other trends do you see in supply chain Management and what Approach, methodologies and Metrics do you use?