To develop a supply chain strategy, SCT engages our clients to fully understand the business strategy and customer needs. We then analyze market data, modeling network scenarios when appropriate, and identify best case scenarios for building capabilities in house or selecting the right partner to own supply chain functions.
Once the strategy is defined, SCT can perform the next steps to build out the future state model, including documenting sourcing strategies and third party service requirements, and the necessary organizational structure and skills. Finally, we can plan the implementation, including realistic project staffing and scheduling, setting up key performance indicators (KPIs), ensuring cross-functional buy-in, and managing change to align with the new model’s goals.
With SCT’s insight into operational best practices and the expansive ecosystem of suppliers of supply chain services, we help to deliver supply chain strategies to our clients that align to key business objectives, including:
- Product availability and distribution models to support best in class delivery timeframes and customer experience to ensure high levels of customer satisfaction.
- Optimized cash flow delivered balancing investments in assets vs outsourcing, economic order quantities for production, effective transportation strategies, and optimized inventory distribution facilities
SCT’s Approach to Supply Chain Strategy Definition
Discovery, Industry Briefings, & Stakeholder Alignment
Too many supply chain projects fail to meet their objectives due to lack of organizational buy-in or lack of alignment to strategic goals. SCT’s focus from the outset of our supply chain strategy engagements is in a two-way educational process, beginning with our client stakeholders articulating their vision of how their business differentiates from the competition, critical success factors to their growth strategy, and how the business must evolve to out-perform industry peers and meet financial objectives – along with their own objectives for how their departments will contribute to this evolution in the future.
Pairing this executive alignment process with a capabilities modeling exercise, we align supply chain strategy to identify current or required in house capabilities needed to meet objectives, focusing investment on areas of differentiation to market share, revenue growth, and profitability, and explore build vs buy options across supplier networks, manufacturing, logistics and distribution.
The initial phase of the project is focused on cross-education and gaining alignment across the steering committee comprised of the leadership team and SCT engagement leads. Critical activities and deliverables include:
We’ll dive deep into organizational structure, supply chain facilities and functions, technology footprints, Operational KPIs and business performance from recent years.
We’ll provide a set of question for review in advance and hold a conversation with each stakeholder identified as critical to the success, probing perspective on how they influence overall company success, current state challenges, divisional initiatives, longer term strategic objectives, etc. Individual interviews provide a platform for feedback as we aggregate perspectives and read back overall findings with a focus on establishing consensus on organizational objectives and priorities.
When considering business priorities, SCT will develop a capabilities model to act as a communication device for importance of supply chain functions and capabilities that will be needed to achieve the future state vision (where the business has achieved optimal capabilities to compete given expected future market realities). This model will help to align strategy to build/buy/partner options early and ensure consensus on the importance of various functions.
The official readout of findings, SCT will facilitate a workshop that outlines business priorities for discussion amongst the team, and invokes participation to ensure individual priorities are understood across the team in the context of overall strategy. This consensus building exercise delivers a shared commitment to success across the leadership team.
A program charter will be documented and distributed across the leadership team for approvals. This will act as a guiding strategic plan throughout the remainder of the engagement to ensure an aligned approach and appropriate levels of focus across functions and departments. This is not a 50-page document developed on an hourly rate, but rather a straightforward presentation representing organizational strategy, operating, and financial goals.
Analysis & Capabilities Assessment
The objective of the capabilities assessment is to more deeply understand the contribution of each function, and how advanced or differentiated capabilities in these areas might translate to the key business goals defined in the program charter
Similar to the collective value of two-way education on business strategy, SCT facilitates workshops to dive deep into each supply chain function, initiating conversation around how best practices might contribute to overall business goals, whether they are critical to customer service or operating margins, and whether these functions might be best served in house or outsourced (over the long term), and how the capabilities that matter might be optimally developed and delivered. Partner ecosystems are considered here to accelerate or ultimately own the delivery of the function.
Reviews of supply chain processes and technology will be benchmarked against industry norms and evaluated for value and relevance to supply chain strategy. Insights into risks and opportunity are compared to existing plans for a targeted point of view on maturity & strategic differentiation.
As a deeper dive from the Program Charter, results from the Capabilities Assessment will be presented back to the steering committee, with insights into different scenarios by which a supply chain strategy might be executed. This will include a description of the critical elements of a future state supply chain capability,
- Whether it can be achieved internally with the existing organization and toolset or developed with what level of complexity,
- Whether it can be outsourced, along with what types of partners might be considered and what types of internal controls would need to be developed and maintained to oversee the partner,
- Whether complementary services might be secured, what segment of vendors might be considered, and how it might be implemented and supported over the long term with internal resources or supporting partners.
Feedback into these options from the steering committee provides a critical gate prior to diving deeper into roadmap development and implementation planning, as it will filter out any non-starters while driving focus into some options where concerns exist for deeper vetting and definition of options.
Transformation Strategy & Implementation Planning
Once priorities and preferred strategic directions are understood, the next round of analysis vets those objectives against operational and financial realities. SCT works through a deep assessment of each strategic workstream, developing out rough orders of magnitude for budget, staffing requirements, and potential conflicts with business conditions to develop a roadmap of sequenced initiatives to smooth demand on resources and deliver the future state in accordance with business requirements. Should this prove impossible, conflicts will be escalated to the steering committee and alternatives reviewed to bring an achievable plan to the table.
Based on strategic priorities and associated complexity, coupled with staff development, SCT will work with client leadership to develop out high-level implementation plans for each major function. Considering constraints around budgeting, staffing, and seasonality, as well as interdependencies between initiatives, we’ll develop a high level (monthly) roadmap to manage the implementation of the strategy in alignment with business scheduling requirements.
With clarity on roadmap priorities and tools, strategic relationship objectives can be solidified, allowing the broader ecosystem requirements to take shape. Governance processes in support of strategic relationships will be joined by sourcing and vendor strategies for adjacent investments and support areas. Total Cost of Ownership (TCO) of the supply chain will be considered. These may include direct engagements with preferred partners, RFIs to be leveraged as educational processes for areas that may require deeper design understanding, or RFPs to streamline and accelerate urgent initiatives, or where the provider landscape is more mature and requirements understood. The exact process for each of the sourcing strategies will vary depending on the focus, SCT supports:
- Materials (custom or standard materials/parts), with a focus on vetting manufacturing capacity, lead times, cost, change management, inventory programs, adherence to quality standards, etc.
- Manufacturing or Packing Services, with a focus on vetting manufacturing capacity and capability, quality, pricing, contract structures, geography, lead times, change management, certifications, etc.
- Logistics Services, with a focus on lane-based capacities and pricing, service level attainment, carrier networks, customs clearance capabilities, Transportation Management Systems (TMS), etc.
- Distribution Services, with a focus on warehousing and labor capacity availability and technology, service level agreements, transactional, fixed bid, or cost-plus pricing approaches, geography, reporting tools, etc
In alignment to the future state vision and roadmap, staff development and onboarding expectations will be prepared to communicate career growth opportunities and align focus on priority skills to be developed. Considering future state supply chain capabilities while rationalizing investment in internal teams vs external providers delivers insights to either further develop core capabilities or suggest the need to evaluate vendors to be embedded as strategic partners in the transformational journey.
Justification & Executive Presentation
Once the team has vetted each of the options and the tradeoffs between major decisions that need to be made, it’s time to secure funding and prepare the organization. Deep clarity is needed to ensure the right resources are ready to take on the challenge, and that KPIs will be measure to ensure objectives are met. SCT ensures these conditions are documented and ready for review with the broader organization.
Priorities will be scoped and sequenced, providing clarity on transformation strategies and business justification. Major workstreams will be bucketed for staffing and budgeting requirements (services and systems), and a comprehensive review of ROI will be developed in justification for investment approvals from the board.
SCT’s final deliverable will provide concise messaging for socializing the approach and objectives as well as the rationale behind the sequence of initiatives will lay the foundation of the future state operating model. Whether ROI-focused financials for presentation to the board, or strategy-related content highlighting market dynamics, strategic objectives, and tactical initiative specific details to communicate to the organization around success factors and organizational impacts, this presentation assures consensus on the strategy across the steering committee and provides a consistent conduit for messaging to align the broader organization.
Strategy Implementation Oversight
Once the supply chain strategy is defined, it’s time for the heavy lifting to begin. The investment you’ve made in SCT will not be rewarded strictly in a sound, well socialized strategy, we’ll be your partner throughout the implementation. Bringing experience in orchestrating fundamental change to organizations, SCT will act as a stabilizing presence to ensure that projects are focused on delivering the strategy and value defined in the program charter and agreed upon throughout the implementation planning.
Change management is perhaps the most critical element assuring the success of an implementation. Preparing the business for the impacts of process and technology changes, while championing the positive impacts it will have on the personnel and the business can go miles towards driving the correct outcomes. SCT works with client leadership to build awareness of pending change and communicate effectively across stakeholder groups while preparing them for a successful transition.
Ensuring stakeholders maintain a clear line of sight to both project success and program objectives is critical. Opportunity often lies beyond your typical cadence of status reporting and milestone presentations. With ongoing and frequent dialogue beyond the mechanics, our advisors will cultivate a dialogue with project stakeholders deliberating project risks related to people, process, and technology, adding rigor to change management and calibrating scoping decisions to balance results with objectives around schedule and costs.
Formal, objective reviews of program success prove useful to calibrating program investment. Our advisors, extracted from the day to day challenges of operations and project management, provide a useful rudder to steer your program to achieve its longer term vision, and serve as a reality check when responding to trends and anticipating potential disruptions.
