Many of the discussions I have in the course of my work are around the different perspectives businesses have on how best to approach supply chain optimisation. It all comes back to where their business sits in terms of logistics maturity.
Gone are the days where the cost alone matters. In order to survive, businesses need to constantly change with the dynamics of their industries and innovate to maintain competitive advantage. This is the same with supply chain optimisation; technologies evolve, disruptions arise and new value add services emerge to address them.
The best companies continuously monitor, develop and reinvent their supply chains, even if they are leaders. As a result, they can manage risks; respond to changes in the economic, technological, and competitive environment; and explore new opportunities more effectively than their competitors.
Some recommendations to assist with supply chain optimisation in your organization include:
· Define and distinguish between your corporate and supply-chain strategies. Ensure your supply chain supports delivery of the key parts of your strategy.
· Collaborate with experts and create a modern, end-to-end supply-chain organisation.
· Maintain complete visibility and utilise sophisticated statistical analysis. This allows you to manage supply chains end-to-end. Make sure your supply-chain combines operational excellence with strong analytical capabilities and data-driven, cross-functional decision-making.
· Strive for supply chain excellence. Set performance standards for the organisation and measure accordingly. Give incentive to your supply-chain organisation to work in ways that deliver the most value for your business while protecting against its biggest risks.
There is a strong correlation between supply chain maturity and optimisation. Successful companies know their supply chain is much more than the cost and process of getting products into customers’ hands. These companies appreciate that a properly designed supply chain enables the implementation and realisation of corporate strategy. The day-to-day interactions both within and beyond the organisation make it happen. The inclusion of this broader perspective on supply chain in business planning reaps rewards.
“The path to logistics excellence is partly defined by an organisation’s current level of logistics maturity.”
says James Lisica, research director at Gartner. Gartner has created a 5-step model to logistics maturity. I have summarised the 5 steps below:
Step 1: React — Silo-ed Autonomous Operation
Characterised by autonomous departments, such as sales and manufacturing, driving logistics priorities via manual processes and disparate, disconnected systems. This aims at bringing departments together.
Step 2: Anticipate — Functional Scale and Efficiency
There is a focus on creating standardised processes and methods to benefit from economies of scale and increased efficiency. Performance focuses internally on fulfillment percentage, productivity, costs and return on assets.
Step 3: Integrate — Integrated With the Supply Chain
The focus now is on integrating the logistics function into the overall supply chain.
Step 4: Collaborate — Collaborating With the Value Chain Network
By this stage, there is collaboration and visibility with suppliers and customers, as well as strategic partnerships with logistics providers that go beyond simple transactional services.
Step 5: Orchestrate — Network Orchestrator of Profitable Customer Value
Logistics and the rest of the supply chain facilitate processes across an ecosystem of partners to capitalise on unique business opportunities. As a result, information flows across the supply chain network in real time. This enables broader visibility and timely, fact-based decisions, which increases market share and growth opportunities.
At what stage of logistics maturity are you? Do you feel your supply chain is fully optimised? It’s not easy to answer.
Your supply chain is one of the most critical parts of your business – you should always be looking for ways to improve it. Choosing a logistics partner you can trust to navigate in this uncertain environment is essential if you want to get ahead and stay there. Magellan’s experienced professionals can help you consider and implement optimisation techniques that suit your business and put you on the path to supply chain maturity. For a confidential discussion about your supply chain get in touch with me today on +612 9153 0864 or via email.
At Magellan Logistics, we provide a variety of freight forwarding services throughout Australia. Contact us today for more information.