It all starts with a good question
Supply Chain Optimization
Today’s supply chain is where the capabilities of any organization are tested by just about every problem that can thrown at it. It requires multiple balancing acts, where supply must match demand, service, new technologies, and cost efficiency. If we look with today’s knowledge of what happened between 2020 en 2023 it is not surprising that there is an increased emphasis on business continuity and digitization. Foundational to all the new technologies and applications becoming available.
A different perspective
Trying to find solutions for the different problems and opportunities in the supply chain one can look at the supply chain from different perspectives. It is common to look at from either a strategic or tactical level. We however, focus on structure or alignment. (within the current structure). A second paradigma is the End-to-end view versus to a Partial scope. It makes sense to make this distinction because it is not always wise to take on the entire monster. Chopping the problem up in little pieces is often more effective.
What are the typical triggers to start a project to optimize the supply chain? Well last couple of years we have seen that disruption are a major cause to rethink the structure of the supply chain network of course. In addition, mergers and acquisitions are a major reason. Cost reductions, ending of a lease contract, opportunities to profit from labour and production cost differences, trade-barriers, new products, innovations. Typically there are two flavors: improving the structure itself or looking for improvements within the current structure.
Is it all worth it?
We have been monitoring the projected savings of all our projects. Depending on the part of the supply chain we look at is usually ranges between minimal 3 to 12% and especially the network structural projects usually yield double digit costs reductions or improvements. Network structure projects usually have the biggest (positive) impact. Difficult to implement, that explains the inertia, but gives the highest results. No guarantees but it illustrates the potential benefits.
We have been monitoring the projected savings of all our projects. Depending on the part of the supply chain we look at is usually ranges between minimal 3 to 12% and especially the network structural projects usually yield double digit costs reductions or improvements. Network structure projects usually have the biggest (positive) impact. Difficult to implement, that explains the inertia, but gives the highest results. No guarantees but it illustrates the potential benefits.
Sources
SCM World Future of Supply Chain surveys 2017, 2018 (n=1409)
Supply Chain Digital Transformation Study. The Hackett Group (2017)
The Most Important Boardroom Discussions, Supply Chain Magazine no.29 Q2, 2018
Gartner Top 8 Supply Chain Technology Trends for 2018, February 27, 2018
Top 10 Supply Chain Trends 2023 2 , ASCM (2023)
ORLANDO, Fla., May 10, 2023, Gartner Reveals the Top Supply Chain Technology Trends for 2023. Justin Lavelle
Top 10 2024 Supply Chain Trends: Beware of the Analytics Rabbit Hole. Last Published: Sep 21, 2023
Do you have a good question?
We are here to help. So if you have a network design question, just let us know. We specialize in guiding organizations with the transition to digital supply chain management and our expertise lies in leveraging advanced analytics tools to streamline operations, enhance visibility, and optimize supply chain performance.
