SUPPLY CHAIN STRATEGY

Successful strategic Supply Chain Design • Segmentation according to SC requirements • Differentiation of services addressing these requirements • Selection of either a responsive, or an efficient solution design • Orientation of solution details on specific customer segment delivery performance designs

There are many different topics when talking about supply chain strategy… In most projects with strategic context, the key question at the end is how to deliver customers, and how to design the internal operations to do so. This is more predominant than questions around warehouse locations, global footprint or other high level topics. The latter one are also very important, and need to be addressed in a strategic context, but in the end they all follow the question to find the “best-fit” supply chain for all different customers, their needs, their products, and the required delivery modes. IN-NOVA pursues a very focused and effective approach to identify these best-fit supply chains. In many clients we have found a more “one-size-fits-all” approach when it comes to supply chain design. But even before the emergence of digital business, and the challenges from the digital transformation, it is mostly necessary to build a set of very different supply chains within the company. The variety of requirements is too high, and to address these with a narrow set of supply chain possibilities, leads to high cost, insufficient service levels, and a lot of other negative side effects. In our experience, the journey starts with a good segmentation. But not a marketing driven segmentation, but a segmentation driven by specific requirements of products, production processes, distribution requirements, and customer need types.

Your own journey towards a high-impact, high-value supply chain strategy Based on a clever segmentation, it is a challenging but also rewarding task to come up with a number of very differentiated ways to purchase materials, produce the product, distribute it, and link specific service elements, and even pricing elements to it. Of course, also order taking, inventory management, and many other elements offer opportunities for differentiatioin. The following design of the various supply chains which are required to make and distribute the products is based on two distinctly different base models: • An efficient supply chain is typically very “low cost” driven. This is the classic domain of cost management, but it also needs significant considerations of delivery capability. This type of supply chain is suitable in a low-change environment, often with high volumes, or high number of similar transactions. Downside is that it offers little room for adjustments, or individuality. • A responsive supply chain is required when predictability of a future state is very limited, or the variety of the requested product or service is very high. As a result, buffers and other flexibility elements are required to provide the necessary short term reaction capability. But, of course, cost-control is always an important part of supply chain management. Therefore it is often necessary to break down the overall (end-to-end) supply chain in individual brackets, and to identify the inherent supply chain logic for each step. Based on these insights, a multi-stage supply chain design can be developed, providing the right level of flexibility, but still bundling for scale-efficiencies where possible. But there are many more “tricks to the trade” which we will be happy to explore together with you for your individual supply chain scenario!