Note: Today’s post is part of our ‘Editor’s Picks’ series in which we highlight recent posts from our sponsors that provide supply chain insights and advice. Today’s article is by Ahmad Jiwani of Coupa and looks at supply chain design.
How often do you review and update your supply chain designs? Once a year? Once every two years?
If you’re like many organizations, you’ve probably made changes to your supply chain network in the past couple of years. But these changes may still not be enough if you don’t revisit them as conditions warrant. Even if you’ve implemented the most sophisticated process and technology for your S&OP process, there’s a hard truth you need to hear: a supply chain that’s not designed to keep pace with rapid change. of the market will leave your best-laid plans exposed and render them unreliable.
Traditional supply chain design and planning relied on the idea that “governments were rational, variability would be low, and logistics would always be available,” as stated by Lora Cecere of Supply Chain Insights. But now we all know that those ideas are no longer true.
Designing once in a while – or designing episodically – already limits the resilience, sustainability, and profitability of your organization’s supply chain. Here’s why, and what your organization should be thinking about instead.
But first, let’s go back to the same page:
Supply Chain Design Solutions and Definitions
- Supply Chain Design: A process in which the nodes, modes, flows, and policies that govern a supply chain are defined, reviewed, optimized, and aligned with business objectives.
- Episodic Design: An approach to supply chain design that is often project-based and conducted on an ad-hoc or periodic basis, and may or may not be loosely tied to other business goals.
- Continuous Design: Continuous design is the continuous development and refinement of optimal supply chain structures, policies and flows. This is achieved through analysis, scenario planning and simulation with end-to-end models, powered by AI and powerful algorithmic engines. In leading organizations, this effort is supported by a Center of Excellence (COE).
Why Episodic Supply Chain Design Fails
A global food and beverage company used a handful of models each year in its European operations. But as their supply chains and operations became more complex, they realized that was not enough. They could not adapt quickly to changing situations on the ground and their designs were not able to take local and regional contexts into account. The realities of their business and the world required them to run more scenarios and run them more frequently.
To read the full article, click here
