7 THE OUTSIDE-IN PLANNING HANDBOOK | 2023
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Executive Summary
Three assumptions defined the global supply chain: rational government policy, logistics availability, and low variability. Connectivity, sensor advancement, ocean transport scale, and advanced mathematics/optimization advances made the global
turns, and Return on Invested Capital (ROIC). Companies want to grow while improving margins, customer service, inventory turns, and asset utilization 2 . The answer is not easy. The transition requires a shift in focus to understand how improvements in performance drive value.
supply chain possible. During the last decade, while technology advancements increased, the base assumptions are no longer valid. Markets and disruptions increased. Economic cycles increased becoming more regional. The answer? Many might point to technology, but ironically, during this period, while technology advancements to drive insights accelerated, the adoption was low.
______________________________ Definition: Enterprise resilience is the ability to drive consistency in the results of growth, operating margin, inventory turns, quality, and customer service despite market shifts and disruption. ______________________________
The shift from inside-out to outside-in planning is a step change, not an evolution, requiring a redefinition of planning architectures and thinking. The concepts also challenge consortia and consulting thinking. The change takes time and courage while building organizational capabilities. To make the transition, companies need to be clear on the mission (definition of
supply chain excellence), measurement (measurement systems drive behavior), and modeling (modeling changes as companies attempt to be outside-in). Today’s focus is on building better engines without questioning whether current models improve outcomes. So, you might ask, why tackle this journey? Based on three years of testing, we find that the redefinition of supply chain
As business leaders sort through this new reality, driving resilience while improving performance is difficult. They must also recognize that achieving economy of scale in supply chain execution is an opportunity. In our research, regional supply chains outperform global peer groups, and no company gained economy of scale in performance through M&A 1 . The analysis is based on the metrics of growth, operating margin, inventory
1 Supply Chains to Admire 2022 – Supply Chain Insights 2 Lessons Learned From the Supply Chains to Admire Analysis, https://www.forbes.com/sites/loracecere/2022/12/06/lessons-learned-from-supply- chains-to-admire/?sh=7551703951c6, December 6, 2021
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