We live in a changing world, where in the future, supply chains will no longer be managed in a linear fashion, as suggested by the SCOR model of Source-Make-Deliver chains. In this article, we present our vision for the future of supply chains and the topics that will determine their competitiveness. The future of supply chains will be characterized by growing business networks and cloud-enabled ecosystems. Companies will be members in multiple ecosystems and may play multiple roles. For instance, an OEM could act as a supplier, an engineering contractor, and a participant in a marketplace he has created with competitors.
Supply chain optimization is crucial in an increasingly globalized competitive world where margins are under constant pressure. In the recent decade, most of the attention in supply chain design has been on maximizing resource utilization, offshoring to lower-cost regions, outsourcing non-value added operations, implementing just-in-time systems, and investing in communication technologies. With the rapid expansion of the economy and technology, business competition has morphed into supply chain competition. Supply chain management has sparked public concern due to the frequency and severity of terrorist attacks, pandemics, hurricanes, and other disasters, resulting in lower production, higher costs, rising customer dissatisfaction, and much more.
For a long time, supply chain specialists have been dependent on traditional forecasting models and techniques to estimate demand for their goods and services. Both the digital transformation and the fourth industrial revolution –industry 4.0– are advancing rapidly. This has a fundamental influence on the way human beings live and work. The introduction of digital identifiers and the internet of things (IoT) produced a huge amount of data. One of the main impacts of this situation is that supply chain management decision-making is increasingly driven by data instead of experience. However, the traditional strategies and methods used in the different parts of the supply chain impose many constraints that prevent gaining full advantage of data.
All supply chains are lagging behind their optimal performance. This is what we call the supply chain performance gap. With the first nine articles of this series, we analyzed the issues of Supply Chains lagging behind their potential. Today we will close the journey and ask ourselves what the characteristics of a high-performing Supply Chain are and how we can make a difference. In 2016 the magazine Inbound Logistics asked several CEOs and Supply Chain executives: "What are the characteristics of a great supply chain?". These are the success factors, as well as possible reasons for failure.
Today’s internal complexity article concludes the insight into the eight root causes of the supply chain performance gap. Internal complexity means complexity resulting from inside the company such as organizational structure, type of organization, number and types of processes, internal and external interfaces, corporate culture, business activities (e.g., product and service development), and mergers and acquisitions. The good news is that internal complexity can be directly influenced and reduced through different actions, from executive decisions on business and corporate structure to processes, personnel, and products.
Join Dr. Christoph Kilger and Dr. Boris Reuter as they discuss the supply chain performance gap, and where you can start closing it. Most businesses collect large amounts of data, yet supply chain analytics doesn't always translate into concrete measures that are executed. How can you start digital execution management that leads to real results?
While most supply chain executives agree that Sales and Operations Planning is vital for ensuring supply chain efficiency, many companies struggle to implement and conduct the process successfully. In the following, we will discuss the most common pitfalls of implementing S&OP, the steps needed to ensure proper execution, and the benefits a smooth S&OP process offers.
Our planet and its people face one of the greatest challenges in history – to become more sustainable. Supply chains do not escape this challenge and reforming the supply chain to become more environmentally friendly is one of the major tasks of the future. Sustainability is defined as meeting our own needs without compromising the ability of future generations to meet their own. Therefore, it is vital to maintain an ecological balance and avoid the depletion of natural resources to a point beyond recovery.
In today's globalized world, regulatory complexity is one of the root causes to lacking supply chain performance. This article presents the sixth of eight root causes we defined for supply chains lagging behind their potential. You will find an overview of all root causes in the first post of our ten-part series. For more details, jump to the related article.
Today, we give you an insight into our 5th root cause: the complexity of supplier network. In the previous articles, we already addressed the root causes of product portfolio complexity, speed of innovation, new types of competition, and multi-channel sales complexity.
The complexity of supply networks is determined by the diversity of supplier relationships and their changes over time. The main drivers for the diversity of the network are the number of suppliers involved and the topology of the network, which is expressed in the number of levels, the degree of networking, and the types of relationships. Examples of supplier relationships are direct material suppliers, logistics services providers, contract manufacturers, engineering contractors, equipment vendors, and professional services providers. In addition to the structural complexity, the geographical location and thus political and social structures have an additional influence on the complexity of the supplier network.