The risk of incrementalism
A case for taking on the next stage of supply chain transformation
The strategy that has made supply chain organizations effective over the last decade is not likely to be what makes them effective in the next. Businesses have spent significant efforts marching up the supply chain maturity curve, diligently leaning out their supply chain and searching for incremental opportunities to cut cost and reduce waste. Many of these activities have led to unprecedented reductions in operating expenses, working capital, and workforce. Yet a real danger exists for companies that fall back on what has become comfortable and continue setting targets based on previous successes.
Getting it right
Getting supply chain transformation wrong in the next few years could be a costly drain on capital, resources, and company culture. Getting it right could rally your organization, help you leapfrog competitors, and catapult careers.
To remain competitive, many executives understand they need to explore the next stage of transformative change. The hard part for many is knowing where to start. This paper offers an analysis of factors that are likely to impact supply chains in the coming years and suggests steps to take your supply chain transformation to the next level:
- Step 1: Single vision – tailored strategies
- Step 2: Building the case for change
- Step 3: Selling the case for change requires dollars and sense
- Step 4: Three strategic execution strategies to define up front
- Step 5: Chart the course and set sail
10 key factors for effective transformations
Developing a cross-functional supply chain strategy, defining the operating model required to execute the strategy, identifying the gaps in operational requirements and capabilities, and then developing a roadmap to achieve such a transformation can be daunting at first glance. Pitfalls and challenges likely exist at every turn given the longer duration and broad scope of transformational efforts. However, organizations considering supply chain transformation may find that the following lessons learned can help avoid many pitfalls and effectively address challenges as they arise:
- Stepping out of the comfort zone
- Establishing a True North
- Cross-functional leadership support
- Technology that supports, but doesn’t drive, strategy
- Effective resourcing through focus and discipline
- Aligning resources to evolving skillset needs
- A strong and durable business case
- Spend the time to get the budget right
- Cross functional boundaries early and often
- Building solutions that last
Companies that are too risk averse to make bold plays like end-to-end supply chain transformation may find themselves sitting on the sidelines watching their competition slowly stealing away market share, employees, and investors.
Supply Chain Strategy
Deloitte helps companies align their supply chain capabilities and operating models with their business strategies.