Turbocharge your supply chain transformation through data and analytics

Investor and board presentations often talk about transformations. A quick Google search defines transformation as a thorough or dramatic change in form or appearance. In supply chain, a change in appearance seldom delivers the expected outcomes. On the other hand, a transformation based on data and analytics will likely deliver sustained changes. Our clients have successfully transformed by leveraging data, change management and values.

Values are foundational to supply chain transformation

Values serve as the foundation for any initiative. Your team, customers and suppliers recognize when your actions, decision-making approaches and directions have clear and consistent values.

• If you value customer service, do you incorporate service needs as a cornerstone design principle?
• If you value integrity, do you execute your contracts fairly and consistently?
• If you value your employees, do you seek to provide growth opportunities and training when going through transformations?

Now more than ever, your actions are scrutinized on a 24/7 basis. If you've demonstrated your values, your stakeholders will be ready to work with you unselfishly and tirelessly. You'll need that constituent commitment and advocacy to achieve a successful transformation.

Change management is the supply chain transformation bedrock

Change management is recognized as a part of the transformation agenda. However, rarely is it embraced as a transformation guiding principle. Many different change management models and approaches exist. The approach you prescribe isn't what matters. What’s important is you have an approach, are cognizant and measure your success.

Most, if not all, change management approaches include a vision, goals, status evaluation, clear growth plans, a powerful “why,” a leadership coach or guide and a measurable action plan. Successful transformations embrace change management as a key success factor.

Data and analytics fuel and turbocharge supply chain transformation.

Data is the fuel, and analytics will turbocharge successful supply chain transformations. Data maps all critical aspects of a transformation. Without data, you'll go through a transformation blind — in a fog, in dark conditions. Supply chain transformations can be holistic or hyper-focused within a subset of the supply chain. Aligning your core objective with one of the following tracks will provide a true North Star:

• Exceptional service
• Asset usage
• Cost optimization

A holistic transformation will, at a minimum, include analysis for:

1. Supply chain design
A supply chain design analysis, often called network optimization, answers the following questions:

• How many facilities should you have, and where should they be located?
• What products are made or stocked where?
• Which locations serve which customers?

This analysis will require core data, such as:

• Master data from vendors, facilities, plants, distribution centers, customers and products
• Operational data, such as order, production, shipment and inventory history data
• Cost data from procurement, raw and packaging materials, fixed and variable costs, transportation and inventory holding costs
• Demand forecasts

2. Supply chain planning
After completing your design analysis, you'll need data to update or implement a planning system. This update will allow for the successful generation of demand forecasts, inventory targets and supply plans. Inputs into planning include:

• Historical SKU replenishment lead times for purchased products or raw materials
• Item master data
• SKU replenishment policies
• Inventory planning parameters
• DC to the customer (zip code) mappings
• Production rates
• Locations
• Production costs
• Bills of material
• Routings

3. Supply chain operations
Your supply chain operations analysis will define the best facility layout, automation requirements and updates, human resource needs and recommendations to in-source or outsource different aspects of your operations. This team will require:

• End-to-end cost data
• Activity-based analytics
• Process maps
• Facility design details
• Material handling equipment specifications
• Master data

4. Transportation
Transportation is a large cost component and decision driver in your supply chain design analysis. Volume shifts or location changes within your supply chain impact transportation. It's critical to get control of this spend and analyze it continuously.

Transportation analysis and execution rely on detailed shipment data, locations and dimensional product data. These incorporate all customer needs and business constraints into the decision-making process. The output of transportation data and analysis will help identify:

• The best management structure (centralized vs. decentralized)
• The most efficient way to ship (consolidation of shipments, alternate shipping methods, mode selection)
• How to identify challenges
• Opportunities and drive continuous improvement (KPIs, control towers)

Supply chain transformation success

Designing a supply chain transformation with data, change management practices and values will result in successful, sustained change. Data serves three essential purposes:

1. First, data builds your investment case and baseline.
2. Second, data guides your transformation journey; it is the light in the darkness.
3. Third, data fuels your metrics and provides the foundation for continuous improvement.

Change management prepares and enables your team to support a new operating model. Values, the most crucial aspect of a transformation, help you and your teams make consistent decisions and bounce back from setbacks and hurdles.

Are you ready for supply chain transformation success?

Get in touch with a supply chain expert.