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How should we approach Supply Chain transformation?
Supply Chains are complex systems with many inter-connected entities, from vendors to the end consumers, and supported by partners like transporters, warehouse owners, financiers, etc.
I have been involved in several Supply Chain transformation projects. I have also witnessed many others in the industry. While the results are exceptional in some cases, others end up getting only marginal benefits. What could explain this huge variation?
In my opinion, the key difference between the hugely successful and the lacklustre ones is the way they approach it.
The lacklustre ones typically approach it as either a technology implementation or a cost reduction initiative. While technology implementation is just a tool, cost reduction leads to focus on local optima which rarely has a significant impact on the overall system optimisation.
The super successful ones, on the other hand, focus on only the few leverage points in the supply chain for improvement. These are the overall system constraint and the capacity bottlenecks. Improving these has a disproportionately positive impact on the company’s goal.
Would love to know how you have approached it and the type of benefits you got…