3 minute read • published in partnership with SCCG
Insight: Supply chain leaders’ secrets to success
The efficiency and success of one company’s supply chain compared to another can be determined by the processes adopted, the investment and operational planning put in place which best serves the needs of both the customer service level expectations; and the supplier’s ability to get a product to market via the most appropriate logistics strategy. Supply chain challenges certainly put pressure on company executives, no matter how large or small the business or the industry, in question. The Supply Chain Consulting Group looks at the secrets to success.
Different companies will, of course, adopt different strategies to best fulfil demand and meet the businesses’ needs. Often, it is the variation in these strategies, which determines their performance, and can subsequently, set them apart from being successfully remembered as a supply chain leader; or by turns, a supply chain laggard.
Supply chain leaders have rapidly adopted best practice in differentiating their supply chain capabilities, by implementing the basic abilities required to deliver efficiently, and cost-effectively, integrating real-time demand and supply planning with the key suppliers and customers.
It is the retailers and service providers that are unable to adapt to the ever-changing blend of trends within supply chains, that encompass consumers, which may be at risk of being left behind.
Investing in manufacturing and logistics can lead to financial and operational optimisation. Those leading the way, meeting objectives and output efficiencies, may well have invested in digital technology. With automation often being one of the highest investment factors to consider and recently the means paving the way to become recognised as a supply chain leader; as this can work towards developing new frontiers in supply chain advancement.
Predominantly, it is the Leaders, who are making significant investments into implementing and adopting new tools, as well as adhering to the highest ethical standards, such as reducing their carbon emissions. Investing in the latest technologies can help with new visibility, statistics and digital capabilities to further facilitate automation and efficiency.
Tailoring their services to the needs of different customer segments, admitting that one size does not fit all; Supply chain leaders will create bespoke supply chain strategies to meet different customer segments and individual customer demands. Implementing distinct processes can provide different levels of service at different prices.
Order delivery, cost impact and supply chain flexibility are the main key drivers and challenges that Supply Chain managers and executives must plan to overcome, for a successful logistics operation; with supply chain leaders focused on the success of the end-to-end, supply chain.
To make their businesses even more successful, sometimes the supply chain Leaders outsource their production and delivery but retain the global control of core strategic functions. They may only outsource a percentage of their warehousing and logistics activities and indeed a % of their manufacturing, whilst keeping their core strategic functions (sales, operations planning etc.) in-house.
One prime example of a successfully integrated, supply chain synergy, is that of retailer business acquisitions, such as that of Sainsburys and Argos – executed back in 2016. The consumer convenience alone, offered by Argos stores now being located inside Sainsbury’s, and Fast Track same-day delivery options, are clear consumer strengths over competitors. Yet under the surface, it’s the concision of the supply chain, which is the real winner, and a method, of course adopted by many, a supply chain Leader.
The saving associated with delivering Argos items to a supermarket, when compared to direct-to-consumer (DTC) logistics, equates to approximately 80% of transport costs. Additionally, transport emissions affect the environment in multiple ways, and selling through a supermarket eliminates, not only ‘last mile’ delivery vehicle emissions, but additionally, the costs associated with executing multiple, separate, home deliveries.
Overall, the supply chain Leaders tailor their offerings based on their customer segments, and adopt differentiating practices which are fast, flexible and responsive. By using this pattern, companies are able to support their customers precisely and effectively in tumultuous market conditions.
Supply chain leaders create value by expanding their volume flexibility in their internal manufacturing as well as improving the supply and demand balancing, tightly collaborating with their affiliates.
Leaders reduce risks by managing complexity, subsequently reorganising their supply chains to consistently achieve above-average supply chain performance and financial results, whilst simultaneously attempting to counteract potentially occurring ever-increasing costs, complexities, and inefficiencies.