The speed of innovation has increased significantly over the last 15 years and has become a key factor for competitive advantage. The success of technology and innovation leaders like Alphabet, Apple, Amazon, and Microsoft illustrate this development. Their products and services, such as the iPhone or video streaming services like Amazon Prime Video, have changed the way we live, work and interact with each other tremendously. However, current technological developments not only have an impact on end-customer markets. More and more use cases are also emerging for companies which can be subsumed under the keywords digital business models, Industry 4.0, IoT, cloud technologies, robotics, and AI.

The core of innovation is to enable people to do tasks better than they previously could or make them do things that they couldn’t do before.

Supply chain performance is a measurable indicator based on turnover, costs, and capital employed. We have identified 8 root causes for supply chains lagging behind their performance that we are happy to share with you in a series of articles. Today we will dive deeper into the one cause with the biggest impact on your supply chain performance: product portfolio complexity.

The 8 root causes we have identified are:

• Product portfolio complexity
• Speed of innovation
• New types of competition
• Multi-channel sales complexity
•  The complexity of supplier network
• Regulatory complexity
• Sustainable requirements
• Internal complexity

The purpose of a supply chain is to provide customers with physical goods in the right quantity and quality at the right time and place. Multiple partners collaborate on the operational processes of a supply chain – material suppliers, manufacturers, logistics providers, distributors, retailers – to fulfill customer demand. Thus, a supply chain can be seen as a virtual entity, distributed over many locations and organizations, connected via material, information, and financial flows. Being virtual, distributed, and connected, supply chains are inherently difficult to manage. As a result, many supply chains operate in a mode that is far from optimal. We call this the supply chain performance gap.

Sustainable working capital management is not only about improving processes, having shiny-looking KPI reports in place, and fine-tuning your balance sheet. Working capital management is a cross-departmental discipline that poses particular challenges within your company’s organizational setup. Today, we want to take you through some ideas on how to establish working capital management as a foundation of your organization.

In the last few months, we have seen how important liquidity is: as the COVID-19 crisis hit, a threat to the survival of many companies surfaced within the first few weeks. More than ever, this shows the importance of working capital management as an existential element to the financial health of your business. This article kicks off our series on working capital management. In the next weeks, we will take a deep dive into working capital management and its most important aspects. This week: the impact of economic downturn on working capital management.

The product portfolio and complexity have the biggest impact on supply chain performance. A supply chain's purpose is to provide physical goods. The number of physical goods and their structure (number of raw materials, components, variants) determine directly the quality of forecast, the amount of safety stocks and the delivery performance.