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Is Your Supply Chain Nearing the End of its Shelf Life?

Posted on: 29-03-2016 11:12:021745


In recent Every Angle blogs we've briefly discussed how consumer-driven supply chain networks could be set to dramatically alter the nature of the supply chain, and how technologies such as self-service analytics and prescriptive analytics will continue to provide more insights and opportunities to improve supply chain performance. It therefore goes without saying that supply chain professionals currently find themselves in a somewhat challenging, yet exciting environment. With so much dramatic change afoot, supply chains that don’t move with the times and embrace this change will soon find themselves tired and outdated. As Jack Welch famously declared; “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”

So where should supply chain professionals be focusing their attention in order to stop their supply chains becoming obsolete?

The answer is of course not simple. The impact of these technological disruptions will vary from one industry to the next. However, for the purpose of this blog I will focus on one of the indicators I believe to be most key. Strategy. To put it simply, if your supply chain is unable to execute and deliver on an organization’s overall business strategy and vision, then changes need to be made. Fast.

In a recent article by the Digitalist Magazine, Hans Thalbauer argues the Chief Supply Chain Officer is the most transformative executive in the c-suite; something I find hard to disagree with. During the article Hans explains that;

“To compete in the digital economy, companies are discovering they must embrace more fundamental change. And to achieve that, they’re renewing their focus on the extended supply chain.”

This certainly holds true in omni-channel business environments where the customer now expects to be able to purchase products when and where they please. The more choices the customer has, the more demanding the expectation – meaning that unsurprisingly your supply chain needs to become more agile and responsive as a result. Organizations that are caught in this new omni-channel landscape need to embrace supply chain innovation in order to build a network than can support value chain strategies. If your supply chain is not empowered to deliver on these promises, then customers will soon flee to competitors that can. This is something Sean Culey, a business transformation expert, touches upon in his self-service analytics eBook. Something I’d strongly recommend you read.

The most basic, simple supply chain may have years left in it, assuming that market demands very little. However, this is a massive assumption. Amazon is currently attacking retailers, 3PL’s and manufacturers all at the same time; creating new business models with new channels and new ways of capturing and fulfilling demand. Other retailers, noticeably in the food and beverage industry, will have to respond and raise their game too. With Amazon and Morrison’s new one-hour delivery service, next day delivery will be seen by many as too slow. The costs of matching Amazon are significant, causing margins to be squeezed almost everywhere. Something has got to give.

The supply chain plays such a prominent role in the modern day value proposition; SCM professionals therefore need be doing all they can to ready their supply chains for the future. If you want a quick and clear way to determine whether your supply chain is in need of some TLC, check to see whether you are being asked to provide more value - or to lower costs. This will tell you whether you have done enough to change the mind-set of the business that your supply chain is a vehicle designed to support and deliver the promises set out by corporate strategy.

For more supply chain hints and tips, take a look at our new interactive supply chain quiz.

Fred Hermans

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