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SUPPLY CHAINS TO ADMIRE | 2023
Recommendations When benchmarking a supply chain, companies must look at performance and improvement (together) within a peer group over time. There are trade-offs. Companies operating with higher performance levels will struggle with improvement. In contrast, companies with a lower level of performance will drive faster progress rates, but improvement processes do not always drive value. Why? The average global multinational has more than a thousand improvement initiatives . Many are overlapping and conflicting. As a result, there is a need to define a multi-year plan reinforced by cross-functional metrics to drive progress against a strategy. As supply chain leaders develop strategies and focus on driving balance sheet improvement, we recommend that supply chain teams consider these seven recommendations: 1. Build a Guiding Coalition to Drive Improvement Based on Industry-Specific Data. Organizations should benchmark against companies within their industry sector to maximize potential and set goals. Each industry has unique rhythms and cycles. As a result, supply chain excellence analysis needs to be an industry-specific comparison.
2. Understand the Supply Chain Potential and Orchestrate Trade-offs. Balanced metrics portfolios drive higher levels of value for the Company. The metrics are nonlinear and tightly coupled. Managing them as a group in a balanced portfolio requires system thinking. Higher-performance companies use advanced analytics to plan outcomes and design the supply chain. 3. Drive Horizontal Alignment. We find that those with the best performance on the Effective Frontier align teams to focus on supply chain finance and translate supply chain processes and strategies into balance sheet results. Holistic organizational thinking is a marked departure from traditional functional thinking, shifting the need for new forms of analytics and reporting. For example, today, while most organizations can easily access functional costs, only 24% of companies quickly access total costs across source, make and deliver together. As a result, it is tough for operational teams to make trade-offs. 4. Make the Supply Chain an Engine for Growth. There is a pushback when we present this data to many supply chain
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