4 min read

A new supply chain for a new market

Eric Lange


The supply chain of yesterday isn’t equipped to keep up with the market of today. Linear and sequential systems are quickly giving way to dynamic, interconnected, and agile platforms. Is your supply chain ready for the new market?

In the new supply chain, agility is key. Speed is paramount. Responsiveness is essential. Disruptions happen and must be coped with. Yet more often than not, companies try to use a rigid, lumbering supply chain process to execute in a market that moves more like a gazelle than an elephant.

It’s time for supply chains to grow up

So how are businesses maturing their supply chains to adapt to this new market and to the new supply chain? According to a 2016 research report from Supply Chain Insights, 70 percent of manufacturers have a dedicated supply chain organization, and 37 percent have a supply chain center of excellence (COE), but only 56 percent say their COE is effective. And only three in 10 (31 percent) have a Chief Supply Chain Officer (CSCO).

What are some practical implications of these statistics? First, what about the other 30 percent of manufacturers that don’t have a dedicated supply chain organization? Perhaps it’s outsourced or run by other parts of the business. Although there may be multiple reasons for lacking a dedicated supply chain organization, a business function as essential as the supply chain should be managed by qualified and experienced employees who can give their full time and energy to such an important cause, a cause that drives the success of the business.

For the 63 percent of manufacturers that don’t have a supply chain COE, what’s the reason behind this decision? If they considered creating a supply chain COE with a mix of innovators from other areas of the business, using the right voices from sales, finance, marketing, human resources, and elsewhere, they could drive cross-collaboration and better-informed decisions. If you’re in the 44 percent of organizations that do have a supply chain COE but don’t consider it effective, perhaps it’s time to reorganize the team and its strategic objectives.

You might be missing key senior-level leadership. In organizations without a CSCO (69 percent of those surveyed), the important capabilities of that key role may be filled by a hodgepodge of people in other roles. Without a CSCO in place, key supply chain decisions may be missing.

Although 70 percent of CSCOs report to the C-Suite, that number should be 100 percent. Supply chain decisions often have a deep ripple effect without the CSCO role in place (and reporting to the right person), so those decisions may be missing buy-in from those with real power and influence.

The modern supply chain is a digital supply chain

Along with solid leadership and organizational structure, the mature and modern supply chain must be a digitized supply chain. The digital supply chain is an integrated network of planning and production solutions that work seamlessly to form an agile, responsive supply network.

Although it’s clear that companies can reap benefits from digitization, progress is slow. A recent Forbes report stated that only nine percent of companies are truly progressing in this change to a digitized supply chain. These pack leaders are moving the industry forward and putting others at risk of being left behind.

So how can you work toward a digitized supply chain?

Focus on a comprehensive solution. Instead of trying to weave together multiple systems, look to gather all your supply chain planning holistically. When you view supply chain planning with a unified and connected lens, you’ll see how the full potential of the connected supply chain can be achieved. For example, costs will be lowered, efficiencies will be gained, and business goals will be reached.

Harness the power of your data. To respond quickly to disruptions that can cause a ripple effect across the supply chain, you need real-time data. The Internet of Things (IoT) enables these connections so you can gather, analyze, and respond to vital data from your network and anticipate change by building what-if scenarios based on that data.

A mature supply chain is effectively led, well-organized, and digitized. Is your supply chain ready for the new market? To learn more about how to build a connected supply chain, download our white paper “Three steps toward achieving a connected supply chain.

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Three steps toward achieving a connected supply chain

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