strategicinsight
BY SIMON BRAGG, RICHARD STONE, AND JULIAN VAN GEERSDAELE
signs7
your supply chain
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, you probably can’t afford to put it off any longer.
This story first appeared in the
Quarter 3/2011 edition of
CSCMP’s Supply Chain
Quarterly, a journal of thought
leadership for the supply chain
management profession and a
sister publication to AGiLE
Business Media’s DC VELOCITY.
Readers can obtain a subscription
by joining the Council of Supply
Chain Management Professionals
(whose membership dues include
the Quarterly’s subscription fee).
Subscriptions are also available
to nonmembers for $34.95
(digital) or $89 a year (print).
For more information, visit
www.SupplyChainQuarterly.com.
A SUPPLY CHAIN REDESIGN IS THE TYPE OF PROJECT
that often gets deferred, especially when budgets are tight.
Redesigns are 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 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 network 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 percentage points. 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 speeches about “stretch goals”
and hoping your team will execute more efficiently or effectively, then it’s clear that
