Have you ever wondered if others would consider your company’s supply chain well-functioning? Would they say it is Good, Great, Excellent, or Outstanding? This is a question asked by the C-suite and supply chain leadership often, especially when business challenges cause us to reassess our processes and capabilities. Taking time for an end-to-end supply chain evaluation is an impactful way to determine how well your supply chain is functioning and if there’s room for improvement.
Let’s take a look at what constitutes a “good” supply chain versus an “outstanding” one.
The Good Supply Chain – Foundational
A “good” supply chain has basic disciplines established, including accurate master data (i.e., supplier data, customer data, material data, BOM) and an accurate inventory system of record supported by accurate and timely recording of transactions. These basics allow visibility to past, current, and projected future inventory positions within the system of record. This is the foundation upon which the rest of the supply chain is built.
A “good” supply chain is also designed based on product segmentation and customer segmentation to foster innovation and allow differences based on product and customer requirements; it’s important to not take a “one size fits all” approach for establishing an organization’s supply chain capabilities.
Good Supply Chain Checklist
- 75% of basic supply chain disciplines are in place and contribute to 25% of the overall business results
- Fundamental visibility of key inventory management elements provided
- Critical supply chain metrics provide an overview of organizational performance
- S&OP is in the developing phase of maturity with fundamental actions and processes in place for key business functions
- A Supply Chain Roadmap is in place providing the WHY for change and preparing the organization for supply chain transformation
- People are being developed to lead and teach others within the business
- Success has been designed on what the ideal state will be
- Standardized reporting formats are utilized for ease of understanding and analysis
- A single set of agreed-upon measures to track operational performance has been established
The Outstanding Supply Chain – Reinforcement and Momentum
An “outstanding” supply chain adds advanced demand planning capabilities to improve forward visibility to projected demand (and all the attendant disciplines around measuring accuracy and bias at lead time). It also enables supply planning that allows analysis based on multiple scenarios. Additionally, an Integrated Business Planning (IBP) or advanced and mature Sales & Operations Planning (S&OP) process aligns supply and demand across the planning horizon.
“Outstanding” supply chains also have established communication and/or integration with customers and Tier 1 suppliers to facilitate alignment, and standard supply chain metrics are in place to measure performance and adjust as needed. Organizational alignment coupled with supply chain excellence is another key attribute – teams collaborating across functional disciplines are centered around the voice of customer (whether B2B or B2C) demand and facilitating responsive and cost-effective supply chain operations.
Outstanding Supply Chain Checklist
- Coordinated decision making to proactively manage risk and value across the full planning horizon
- Highly developed processes in place which are stable and repeatable
- Formalized goals and accountability are focused on long-term advancement
- Demand shaping is used to raise awareness of risks and opportunities which are proactively managed
- Sophisticated customer segmentation strategies in addition to an aggressive product-life cycle management process drives revenue growth and lowered cost-to serve targets are in place
- Collaborative exchange of information (demand, inventory required service levels) with customers and suppliers drive faster visibility and more flexible responses to marketplace changes
- Real-time (or almost real-time) visibility in an integrated, end-to-end model for the supply chain because automatic identification of demand/supplier mismatches
We just compared what Good and Outstanding looks like – how did you score? An objective assessment of your supply chain will help identify gaps, opportunities, and areas for continuous improvement as part of your supply chain’s DNA. The time has never been more important to ensure our processes stay current with the latest industry standards and compliant with regulations – but also right sized to be supported by the organization’s technology and staffing levels.
End-to-End Supply Chain Evaluation Process – Agility and Effectiveness
When was the last time you objectively reviewed your end-to-end supply chain evaluation processes? How adept are you at listening to constructive feedback from your employees about ways your processes could be improved? If it has been several years since you stepped back and critiqued how your supply chain is functioning, or if you’re getting a lot of ideas from your employees on how things could be improved, it may be time to assess how agile and effective your supply chain really is.
Clarkston helps companies objectively and critically evaluate companies’ strengths and weaknesses, helping them to build a roadmap to successfully achieve their business objectives, and our team of supply chain experts is ready to help you move your supply chain toward that “outstanding” status.
Which KPIs do you need to ensure visibilty on the decisions that affect your goals?Download our List of KPIs to Align with the Supply Chain Maturity Model
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