19 SUPPLY CHAINS TO ADMIRE | 2025
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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, so 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 systems 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 can quickly access total costs across the 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 teams. Many do not understand how their work can drive growth. Unfortunately, companies in a cost-focused paradigm struggle with significant horizontal organizational alignment gaps between operations and commercial teams. To break the cycle, use this report to highlight the opportunity and take steps to drive growth. 5. Effectively Manage Complexity. When we interviewed the leaders in past reports, we heard a consistent theme: Increasing product and customer complexity degrades value. In an organization, there is good complexity and bad complexity. Good complexity drives growth with minimal impact on the performance factors on the Effective Frontier, while bad complexity degrades performance. Maximize the growth opportunity with good complexity and eliminate bad complexity. 6. Focus on Building Value Networks. While many of the companies in this report could leverage power in the network to be a powerbroker in the industry to redefine outside-in processes and build effective value chains, 95% of companies accept the limitations of the inside-out supply chain. Over the last decade, only TSMC and Walmart successfully executed value network strategies. In this decade, only Maersk successfully built a value network. The efforts are few and far between. The next frontier of supply chain effectiveness lies in the bi-directional orchestration of process flows with trading partners. 7. Learn from Other Industries. Use a Steady Hand and Focused Leadership to Drive Improvement. Over the years, when we have interviewed the Supply Chain to Admire winners and asked, "What do you think drove improvement?" They responded, "The avoidance of fads and a steady focus on supply chain strategy." The Story of Supply Chains to Admire award winners is not a story of consultants driving a project for change transformation or technology implementation. Instead, it is a story of supply chain leadership driven by a focused internal team over many years.
1 https://www.slideshare.net/loracecere/driving-supply-chain-excellence18june2015final
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