Long gone are the days that supply chain was considered a cost center. Today’s volatile, fast-moving world has pushed the topic to the top of the boardroom agenda. And rightly so: done right, it can help you to really stay ahead of change. The secret to becoming a supply chain champ? That we’ll reveal in a series of ‘Integrated Supply Chain (ISC)’ articles. In this blog: 7 tips to consider on your road to supply chain excellence.
Let’s start with the good news: after three years of chaos, supply chain conditions are improving. Nevertheless, the macro-environment remains uncertain, new players keep disrupting markets and customer loyalty is no longer a given. The lesson is clear: the world requires a new type of supply chains – more dynamic, more agile and more resilient. And while most companies have started ramping up their supply chain investments, the road is still long, as supply chain management is inherently complex.
So, where do you start futureproofing your supply chain? Here are 7 things to keep in mind.
Put planning at the heart and build a supply network
Being able to tackle every supply chain disruption on your way begins with outstanding supply chain planning. “That means making smart use of all the available resources – people, materials, time – in your entire supply chain process, in order to balance supply and demand,” says Jan Simons, Head of Industry at Sopra Steria.
“In order to do that right, you need to know what’s happening in every step of the supply chain: from sourcing and procurement through to production, logistics and after-sales. That requires close collaboration, not only with colleagues but also with the entire ecosystem of customers and suppliers – and even their suppliers. Hence the term supply network, which is increasingly used instead of supply chain.”
Dive deep into supply chain ecosystems in our dedicated blog ‘Ecosystems? yes, please but how can we trust each other?’
Visibility delivers resilience, so set up a supply chain control tower
To get an end-to-end, real-time visibility on all processes and flows – internal and external –, a growing number of organizations are setting up supply chain control towers.
Inspired by the well-known logistics control tower, a supply chain control tower combines data from diverse internal sources, across departments and sites, with data from the external ecosystem: suppliers, logistics providers, customers, etc. By consistently visualizing that data, cleverly connecting it and identifying patterns, it provides an integrated overview as well as smart insights, opening the door to forecasting.
"Companies that embrace end-to-end supply chain visibility were twice as likely as others to avoid supply chain problems in early 2022."
Widen the horizon of forecasting, with demand sensing
“The past years were a reality check when it comes to forecasting,” Jan continues. “We’ve seen that it’s an illusion to forecast what the market will do next month, next year or at any time in the future. That’s why resilience really is the only answer to disruption.”
The long-term demand forecasting as we know it, based on historical data like past sales, is no longer enough to ensure that resilience. That’s why demand sensing is the next big thing in supply chain. Jan: “Companies need real-time visibility and instant access to up-to-date information. So, they invest in technologies to capture the demand signal by adding (almost) real-time context to their data sources, like information on market trends, competitor activities or even the weather forecast.”
“It’s an illusion to forecast what the market will do next month, next year or any time in the future. That’s why resilience is the only answer to disruption.”
Jan Simons, Head of Industry at Sopra Steria
Use technology as an enabler
Supply chain planning, control towers, demand sensing: every capability that helps organizations to pivot when the unexpected happens, is technology-led. And organizations have understood the need to embrace technology.
“The number of supply chain planning solutions is endless,” says Jan. “SAP Integrated Business Planning, for example, integrates modules like demand management, response and supply planning, inventory management, sales and operations planning and even a supply chain control tower to support real-time visibility. At Sopra Steria we also use best of breed planning tools like DELMIA Quintiq by Dassault Systèmes and we are exploring other platform solutions like More Optimal and OMP Supply Chain Planning Technologies."
"+90% of the respondents in the 2022 McKinsey survey report that they invested in supply chain technologies in 2022. 80% expected to make further investments in 2023 and beyond. "
Remember: planning is only as good as the data you use
While technology like planning tools, AI, machine learning and blockchain are great to help you understand complexity, anticipate disruptions and respond to them, they are not a silver bullet. Your supply chain visibility and planning will only be as good as the data you are using.
Does that mean collecting more data? “Not necessarily,” says Jan. “I always suggest to first take full advantage of the massive amount of data that is already available. Data from other departments like marketing and sales, for example, can be really useful for the supply chain team too. It helps them add context to supply chain data, in order to enable demand sensing. Provided the data quality is good, of course. Once you’re making good use of in-house data, it makes sense to include outside information like supply chain partner data.”
Upskill your supply chain team and work on the mindset
Taking all the above developments into account, it’s crystal-clear that the role of the supply chain team is changing fundamentally too. “The roots of supply chain are in logistics and the role of the transport planner used to be fairly straightforward. Today, however, supply chain professionals are becoming a crucial partner for the business,” says Jan. “We increasingly see a gap between the typical supply chain skills most companies have and those that they’ll need. Tech savviness becomes far more important, as well as data literacy and the ability to translate data into relevant insight.
Supply chain roles need a different mindset too. They require creativity, flexibility as well as openness to change and collaboration. On top of that, supply chain leaders need the ability to see the big picture, challenge decisions and cut knots.”
Jan Simons explains his vision on the changing role of supply chain professionals in this article in De Tijd (Dutch) or L’Echo (French).
Start with a maturity assessment
If all the above tips and information sound overwhelming, there’s no need to panic. Sopra Steria can help you pave the way towards a mature integrated supply chain, starting with an assessment to gauge your company’s supply chain maturity.
“To improve supply chain processes, you first need a clear understanding of how current processes are running and what the challenges are. Only then can you identify the gaps and think about possible optimizations,” Jan explains. “That’s why we suggest doing a maturity assessment before investing big in new technologies or people. In that phase, we try to involve the customers’ teams as much as possible in order to encourage ownership. If everyone in the organization understands the importance of planning and feels engaged, that’ll bring you an important step closer to a future-proof, integrated supply chain.”
“If everyone in the organization understands the importance of planning and feels engaged, that’ll bring you an important step closer to a future-proof, integrated supply chain.”
Jan Simons, Head of Industry, Sopra Steria.
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