signs your
supply chain
7
needs a
REDESIGN
Because supply chain redesigns are expensive and time-consuming,
they often get deferred. But if your company shows any of these warning
signs, then you probably can’t afford to put it off any longer.
Asupply chain redesign is the type of project that often gets deferred, especially when budgets are tight. It is complex and time-consuming, and
many organizations lack the needed skills and experience.
Moreover, a thorough analysis may be expensive, which can
be hard to justify in the current economic climate—even
though in our experience, such analyses typically identify
savings ranging from 12 percent to 20 percent of total warehousing and transport costs. In addition, it is difficult to
determine before embarking on the project what benefits a
supply chain redesign project will uncover.
These potential drawbacks deter many companies from
initiating a supply chain redesign project. But there are
times when a redesign deserves a higher priority. Here are
seven signs that it’s probably time to rethink your supply
chain network, along with some ideas about alternative net-
work configurations.
1You have objectives rather than strategies. The first sign that it may be time for a redesign is that you are focused
on supply chain objectives but lack a clear strategy.
Often objectives are derived by taking last year’s cost metrics, like cost per case delivered, and reducing them by a few
percent. What’s more important, however, is how your
group will achieve these objectives; in other words, what is
your strategy? If your answer involves cheerleading speech-es about “stretch goals” and hoping your team will execute
more efficiently or effectively, then it’s clear that you have
objectives but no strategy.
