Note: Today’s post is part of our “Editor’s Choice” series where we highlight recent posts published by our sponsors that provide supply chain insights and advice. Today’s article is from Ahmad Jiwani at Coupa and looks at supply chain design.
How often do you revisit and update your supply chain designs? Once a year? Once every two years?
If you’re like many organizations, you probably have made changes to your supply chain network in the past two years. But those 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 not designed to be in tune with the rapid market shifts will leave your best-laid plans exposed and make 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 Lora Cecere of Supply Chain Insights has said. But by now, we all know those ideas no longer hold true.
Designing every once in a while — or designing episodically — is already limiting your organization’s supply chain resiliency, sustainability, and profitability. Here’s why, and what your organization should be thinking about instead.
But first, let’s get on the same page:
Supply chain design solutions and definitions
- Supply Chain Design: A process where nodes, modes, flows, and policies driving a supply chain are defined, reviewed, optimized, and aligned to 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 connected to other business objectives.
- Continuous Design: Continuous design is the development and ongoing refinement of optimal supply chain structures, policies, and flows. This is achieved through analysis, scenario planning, and simulation with end-to-end models, fueled by AI and powerful algorithmic engines. In leading organizations, such effort is supported by a Center of Excellence (COE).
Why episodic supply chain design falls short
A global food and beverage company used to run a handful of models annually across their European operations. But as their supply chains and business grew more complex, they realized it wasn’t enough. They couldn’t adapt quickly to changing situations on the ground and their designs weren’t able to take into account local and regional contexts. The realities of their business and the world required them to run more scenarios and to run them more frequently.
To read the full article, click HERE