Supply chain management has experienced a remarkable evolution over the past decade. From an organisational perspective, the realisation that supply chains play a critical role in understanding customer dynamics, as well as bottom-line cost, has given many chief supply chain officers a seat at their company’s head strategy table.
At the same time, demands on supply chains have become increasingly complex. In an era of extreme personalisation, customers not only expect diverse product availability, resulting in proliferation of stock keeping units, but also delivery to them when and how they want it.
Growing globalisation and market volatility have resulted in multi-sourcing requirements, dynamic supply chain networks due to availability and pricing, and dispersed suppliers that are often also competitors or customers. Geopolitical instability, climate events and regulations, such as country of origin trade rules or restriction of hazardous substances, add further complexity.
This evolution has driven a need to increase the velocity and transparency of the end-to-end supply chain to more effectively sense and respond to customer requirements, while concurrently mitigating supply chain risk.
Leading supply chain executives are managing the challenge by actively driving collaboration and breaking down silos, not only in their own organisation, but also with other peer groups, such as marketing and finance, as well as partners up, down and across the extended supply chain.
The more data, people and processes you can connect to in the supply chain, the more you reduce your risk, improve performance tracking and ultimately make better decisions
Here are five recommendations for enabling collaboration in the supply chain.
- Create a common vision for your supply chain organisation
Traditional supply chain trade-offs can often lead to divergent objectives in the different components of the supply chain. Creating a common vision that is supported from the top seeds a cohesiveness across all the supply chain players. Having established this, technology and tools can be utilised to enhance visibility across departments and geographies. Once you realise the power in everybody sharing a vision and being able to see the same information, you can work effectively around the sun because you don’t have people on one side of the globe waiting eight to twelve hours to find out what decisions should be made.
- Identify and propagate key performance indicators
Creating a vision alone is not enough to break down organisational silos. Supporting your vision with the right set of performance indicators enables a language and a tool for collaboration. However, it is important to propagate these metrics vertically. Vertical alignment means that the key performance indicators (KPIs) reflect the overall company strategy and ensures the supply chain organisation is meeting corporate objectives. The KPIs must be designed so they can be shared throughout your organisation. With this approach, individual contributors, such as demand planners and sourcing leads, can recognise how their work drives the top-level objectives. The closer you can get between the front end and back end planning function, the more agile and responsive your supply chain can be to the most complex elements that impact your business.
- Ensure culture readiness
The organisation must recognise collaboration as a strength to break down silos. This may require a culture shift which relies heavily on change management. It falls on the chief supply chain officer to not only drive the necessary change and communicate the value to multiple stakeholders, but also deploy the right resources and technology to enable collaboration across the organisation. It’s important that people want to use the technology available, which means ease of use is crucial, but so is broad buy-in to the vision and goals throughout the business. Collaboration often requires a deliberate shift in mindset. When that shift can happen within the supply chain system, people working in different time zones or in different languages can all be in sync.
- Reduce digital latency
Disparate data sources and divergent systems are frequently identified as causes of siloed behaviour in the supply chain. The latency from one group to another, either from manual execution or simply delayed system updates, can result in errors in decision-making and delays in responding to customer needs and supply chain disruptions. Digital transformation and increased automation can help overcome the challenges from legacy systems. Investing in better information infrastructure with integrated data sources as well as smart technology, enables more seamless execution of the supply chain, empowering people and teams to focus on more strategic projects, rather than being mired in manual tasks.
- Establish end-to-end transparency
Expectations around supply chain professionals have changed from being operators to requiring a broader knowledge of the industry and product from an end-to-end perspective. Having effective collaboration and communication, particularly if you are a global business, is heavily dependent on technology. By enabling this collaboration to happen you can reduce latency and continue the flow of business to meet the expectations of your customers. The closer you can bring the information to the individuals who are responsible for the next action, with tools that provide a shared view of the right data and enhanced transparency across the whole organisation, the greater velocity you can have.
The time is now
The reality is you will never eliminate volatility in the supply chain. However, the result of being connected and collaborative across supply chain functions enables greater agility and the ability to react and adjust to the ever-changing environment.
Breaking down the silos, sharing a common data set and embracing collaboration across the supply chain will put your people in the best position to succeed. Moreover, this collaboration can be extended outside the four walls of an organisation and bring in suppliers, distributors and customers.
The more data, people and processes you can connect to in the supply chain, the more you reduce your risk, improve performance tracking and ultimately make better decisions.
For more information on how collaboration throughout your supply chain can help you make faster, more confident decisions please visit www.kinaxis.com