Tips and insights: Supply chain strategy and network design

Based on our in-depth experience in the transformation and optimisation of supply chains, at Siecap we believe the following insights are key to the success of any initiative.

5 supply chain strategy and network design tips

  • Integrated approach

An integrated approach taking into account all stages of the supply chain (SC) is of primary importance, even if only a specific aspect of the SC is being optimised. An integrated approach avoids an improvement initiative that has a positive outcome in one aspect of the SC while simultaneously creating a larger negative in another stage, thus resulting in a negative impact on the overall SC. Often, the negative impacts are only realised later or not at all, making it difficult to reverse the changes.

  • System capabilities

Any new SC optimisation initiative requires the appropriate supporting systems capability to be implemented and operationalised. Often, implementation is handicapped by the system capabilities, resulting in the full benefits not been achieved, and in some cases, poorer service than before due to misinformation and user frustration with the changes.

  • Involvement of staff

The staff directly involved in the change must have full involvement in and ownership of the whole optimisation process. This is best done via a series of interactive workshop meetings, where staff can provide input and get an understanding of why and how the proposed changes are beneficial. Their input is key during the analysis of the current situation (providing issues and opportunities) and agreed proposed changes.

  • Consideration of specific needs

‘State-of-the-art’ new ideas should only be included if they support specific customer needs. They also need to align with and can be able to be integrated into the current SC infrastructure.

  • External partner involvement

External partner involvement should be a priority if they are to be impacted by the proposed changes. This includes suppliers, vendors, 3PLs and any other organisation that is a stakeholder in the complete SC. Their involvement from the beginning of the process, as in the case of staff, will often result in a better overall solution or improvement.

Indicators of potential for improvement

Over time, supply chains grow more complex. They don’t automatically adapt to changing customer needs. Indicators that this is happening can include:

  • network complexity (many SC nodes, inter-company and international SC expansion)
  • process complexity or conflicting operational demands
  • product range proliferation
  • customer complexity or conflicting customer needs (over- and under-servicing)
  • supplier complexity leading to multiple, fragmented and ad hoc suppliers
  • market share loss due to changing markets and new competitors
  • lack of standardisation and integration of operating processes across locations.