E2E Supply Chain Design
Many companies recognise that Supply Chain Design is an essential means to help Supply Chain Leaders take informed decisions on the trade-offs they face. Some companies however still perceive Supply Chain Design as something that a team of operational research specialists is hired to do every 3 to 5 years. It isn’t
The right to win goes to those who best manage uncertainty and can adapt their supply chain to change. The best companies use Supply Chain Design regularly to ensure that it is capable of delivering the level of service agreed with customers, consumes minimum resources – capital and revenue, minimises inventory and environmental impact and supports product innovation.
It gives Supply Chain Leaders foresight rather than hindsight.
Supply Chain Design or Continuous Incremental Improvement?
Supply chain design starts with setting the competitive targets and making strategic choices. Continuous improvement starts from the current reality and takes initiatives to improve it. Both have their merits. However continuous improvement tends to be focussed within supply chain silos without an overall blue print of how they contribute to the big picture. Consequently, continuous improvement without supply chain risks sub optimisation and potentially a waste of often scarce resources.
Supply Chain Design - Step Change (Vision > Choices > Consequences > Gaps > Actions): "Play to Win."
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Advantages |
| Potential for major structural improvements without sacrificing quick wins. |
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Aligns the performance benchmark to the business requirement.
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| Engages the whole supply chain and other functions. |
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Disadvantages |
| Can be time and resource intensive potentially leading to a long execution time. |
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Often (mistakenly)seen as the domain of "operational research" i.e.
highly specialist. |
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Often an over reliance on mathematical
modelling. |
Continuous Improvement - Incremental (Current reality > Initiatives): "Play not to Lose."
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Advantages |
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Good potential for quick wins.
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Easily understood - engages the work force. |
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Promotes a problem solving mentality.
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Disadvantages |
| Uses "benchmarking" to set performance standards i.e. Industry averages. |
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Initiatives usually silo based e.g. improve forecasting. |
| Assumes that the supply chain is structurally OK i.e. risks sub optimisation of the whole. |
Outline Process Flow
