Strategy - TRACC

Strategy
CHANGING FACE
Supply chain and manufacturing thinking is changing fundamentally — not only
in Europe and the United States, but in emerging markets as well.
Roddy is senior vice president, Global Supply Chain for CCI Inc. Previously he
was senior vice president and a distinguished analyst at AMR Research. Roddy has
over 27 years of industry experience, most recently at South African Breweries, where
he was also appointed to lead a portion of the SAB Performance Management
Intervention. He travels, presents and advises global industry leaders on
supply chain best practices, supply chain strategies and manufacturing
change management.
RODDY MARTIN
Supply chain, manufacturing strategy and performance improvement used to be an
‘inside-out’ supply-focused discussion among logistics and manufacturing leaders.
But spurred by recent economic challenges driven by structural demand changes, this
is changing to an end-to-end, ‘outside-in’ discussion with the focus on sensing true
demand accurately and responding profitably across the end-to-end business network.
Leading companies have moved the priority to making balanced trade-offs in managing
growth, productivity and assets across the business.
Of course the prioritised ‘outside-in’ customer-focused supply chain discussion doesn’t
make ‘inside-out’ performance any less important; in fact, it puts even more pressure on
reliable and repeatable product supply from manufacturing and supply operations.
The goal is to make exactly what’s needed and deliver perfect orders and services.
Fundamentally this is the crux of the business capability of sensing and responding
profitably to demand, or demand–driven value networks, as the strategy is called in
many companies.
The change is so significant that in leading companies across various industries the
supply chain strategy has become the business operating strategy. It’s spearheading
major transformation in the way companies manage sales and marketing, manufacturing,
deliver products and services, sourcing, procurement and innovation.
To drive this focus and execution, global manufacturers have appointed chief supply
chain officers at executive level, and are prioritising development of new business
leadership talent and capabilities to support the change.
New end-to-end supply chain strategy
Every business cares about growth, profitability and productive asset use. In the past
many supply chain decisions were classically made from cost-to-deliver rather than
end-to-end costs-to-serve information. This resulted in unbalanced operations
trade-offs and one-sided decisions. As a result of cost-to-deliver priorities, supply chain
and manufacturing leaders concentrated on waste reduction and cycle times inside
plants but not on reducing variability from manufacturing operations in response to true
market demand changes.
However, with the global economic scenario of the last two years, traditional supply
chain and manufacturing efficiency paradigms were challenged in their contribution to
business value. This was because of the lack of end-to-end cash and demand visibility,
and poor collaboration processes across the business.
Weak visibility and process management across the business led to inadequate working
capital management and organisational effectiveness, as well as ineffective organisational
structures and asset utilisation focused on the wrong goals.
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