In today's rapidly changing world, traditional notions of value creation are being challenged by evolving landscapes. Consider that 96% of American CEOs are either reshoring manufacturing operations or actively considering it, and that 75% of companies expect a revenue loss due to supply chain disruptions. Furthermore, climate change will impact food prices, resulting in a projected 3.2% annual increase by 2035. This disruption could result in revenue loss for approximately 40-50% of companies, highlighting the urgency of addressing sustainability concerns.
Yet amidst these challenges, there are opportunities for innovation and growth. Technological advancements, such as GenAI and cloud computing, are opening new avenues for efficiency and agility in supply chain management. And where supply chain performance plays an increasing role in the competitiveness of today’s businesses, we need to focus on the values and contributions we make as supply chain professionals.
Author
Kai Althoff,
CEO
4flow
Resilience, sustainability, and cost-effectiveness: pillars of modern supply chains
To keep pace with rapid change and prepare for an increasingly nonlinear future, supply chains must become more resilient, sustainable and cost-effective. While technology plays a crucial role in enhancing processes and enabling new business models, simply adopting new technologies is not enough. True optimization requires transforming supply chain organizations cross-functionally.
To transform supply chains effectively it is essential to embrace agility, for which end-to-end thinking is necessary. This is accomplished by designing flexible and adaptive structures, leveraging visibility and active risk management, fostering a collaborative network-driven mindset, and enhancing processes through automation and advanced technology.
Sounds easy, doesn’t it?
Achieving true agility
To help us prepare for a future where agility is key, a nonlinear approach is vital. While it might still be possible to achieve 70% cost-effectiveness by optimizing within silos, it is in breaking down these silos and striving for a cross functional approach that true agility is truly won.
While flexible and adaptive structures can represent substantial expenditure when initially considered, these days it is critical to plan with alternatives: dual sourcing, alternative routings and interchangeable production and value chain capacities are just a few examples.
So, cross-functionality and adaptability are essential components of a truly agile supply chain. And with an end-to-end approach and a collaborative mindset, we come to understand the impact of change on network and supply chain capacities, even at the level of repetitive industrial processes.
The good news? Businesses don’t have to manage all these changes all at once. But each step can move them closer to true agility.
Focus on the steps to unlock potential
In order to gain the agility required to gain a strategic competitive advantage, it is critical to transform the way supply chain is organized.
At 4flow, we use a supply chain maturity model to help businesses identify the areas with the most improvement potential – and guide them step by step to unlock this potential. Successful supply chain transformation involves scoping to find out how your business can advance to the next level of maturity. The basis for this is a strategic roadmap.
This approach ensures that supply chains are not only efficient but also agile and adaptive to change.
Navigating successfully together with our clients
4flow helps clients from various industries create and implement new strategies. Here are just four examples from more than 300 annual projects:
Optimizing BD’s Global Supply and Distribution Network
BD, a multinational medical technology giant, faced the challenge of distributing 30,000+ SKUs with unique demand patterns and shelf-life requirements. Collaborating with BD Biosciences, 4flow used advanced network optimization tools to reduce global delivery lead times by 30%-60%, improve regional product availability, and optimize safety stock levels, enhancing customer service globally.
Global Transportation Control Tower with Inalfa
Inalfa, a leader in automotive roof solutions, sought to improve logistics maturity. 4flow helped implement a transportation control tower, integrating material and transport order management in North America and Europe. This led to significant cost-effectiveness improvements and emission reductions, successfully implemented within five months.
Agility-Driven Supply Chain Transformation with Bosch
Bosch required an integrated planning solution for its 220 plants, 780 warehouses, and 66,000 active routes. 4flow worked with Bosch to facilitate a comprehensive transformation to automate and integrate end-to-end planning processes. Now, with global templates ready, Bosch is rolling out the Kinaxis RapidResponse system worldwide.
S&OP Integrated Transportation Optimization for BAT
BAT, managing over 50 manufacturing sites and approximately 800 warehouses, aimed to increase agility and cost-effectiveness. By implementing the Kinaxis Transportation Load Optimizer (TLO) by 4flow, BAT integrated transportation optimization into S&OP processes, achieving significant cost savings, improved planning speed, and enhanced asset utilization.
Shaping the future
The transformation of supply chains is not just a response to increasing challenges, but a proactive approach to shaping the future. This is accomplished by designing flexible and adaptive structures, leveraging visibility and active risk management, fostering a collaborative network-driven mindset, and enhancing processes through automation and advanced technology.
By facing the future with an agility-driven mindset, businesses can focus on the right steps to unlock the potential of their networks. With agile, technology-driven solutions, businesses can navigate today’s complexities and drive sustainable growth. The examples set by BD Biosciences, Inalfa, Bosch, and BAT highlight the tangible benefits of embracing end-to-end supply chain thinking.
The content of this article is based on the presentation given by the author at the Gartner Supply Chain Symposium/XpoTM conference in Orlando, Florida in May, 2024.
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