Operating a supply chain at peak efficiency used to be the key to success. However, fluctuating customer demand and shifting requirements put a strain on past attributed models as the need to combine efficiency with agility and responsiveness are required to stay ahead and competitive.
A Supply Chain Strategy fit for today’s business environment revolves much more around the customer than previously, which requires a customer-oriented setup that balances services, costs and inventories to create value for all parties involved.
Combined with long term supply chain objectives it ensures a rooting in customer relation management, supplier relationship management and performance review. These objectives serve as indicators to not get lost from the value perspective of the supply chain when times are prosperous… and when challenging.
The global footprint of supply chains is critical to success and must support the company’s strategy to achieve its goals. Analysing the production setup, distribution network & inventory setup are three key areas as they reveal if the company’s capabilities are fit for market and strategy.
A modern footprint is therefore a balance between multiple factors such as cost, quality and flexibility, but also sustainability and accountability as they are becoming critical-to-success factors.
To manage the supply chain most effectively, core principles are to be used in supply chain management. Some of these principles include:
- Segmenting the customers to best identify their needs and ensure the supply chain can serve them and turn a profit.
- Aligning demand planning across the whole supply chain and developing forecasts for resource planning.
- Reducing total costs of materials by managing sources of supply strategically.
- Implement performance measures across channels to see collective success of reaching the end-user.
By operating with core principles, it ensures that all managers are aware of the impact each decision has through the whole supply chain, but also on how to approach decisions so that the whole supply chain experiences more value and not individual parts of the chain.
Wrapping all the things together are the strategic choices that are necessary to be taken, so that the overarching strategy and objectives are met. It’s just as important to align and communicate the choices being taken with the rest of the organisation as the development of the strategy itself, which isn’t considered by all companies.
Therefore, having developed a communication plan for all stakeholders both internally and externally is crucial for success when starting to roll out implementation plans and involving the whole organisation.
Typical deliveries in a Supply Chain Strategy process with ZCG:
- Long term supply chain objectives.
- Customer oriented setup with balance of services, total costs, and inventories.
- Global factory and source footprint.
- Global distribution network.
- Global warehouse & inventory setup.
- Overall principles on how to manage and develop the supply chain.
- Strategic choices, and communication packages for owners & employees.
- Tangible implementation plans.
