The Difference Between Supply Chain Agility and Fragility May Lie in Your Center of Excellence
Last year, half of global supply chain leaders experienced at least three major disruptions in their supply chain. In today’s climate of inflation, tightening budgets, and geopolitical uncertainty that impacts supply chains, supply chain leaders are under increasing pressure to demonstrate value, cut costs, and improve profitability wherever possible.
So how can you be sure your supply chain will adapt to these pressures rather than break under them?
Supply chain experts know the importance of continuous supply chain design, which involves developing and refining optimal supply chain structures, policies, and flows. But how do you approach this? How do you do it well?
This is where a supply chain design center of excellence comes in.
A well-supported supply chain design center of excellence (COE) is a business imperative
A properly supported, mature supply chain design COE helps your entire enterprise reduce risk, improve resilience, bring greater agility to your supply chain, and turn your challenges into a competitive advantage. Leading COEs bring the best of people, processes, technology, and strategy under one figurative roof. They formalize roles and responsibilities, capture and institutionalize knowledge, create feedback loops for continuous improvement, and deliver insights across the entire enterprise to drive value.
A successful supply chain design COE focuses on four main pillars: people, process, technology, and strategy
- People: A mix of people with relevant skills to cover the core aspects of a supply chain design COE is essential. These skills usually include data, modeling, project management, and business subject matter expertise. Together, the team provides the knowledge, experience, and business relationships to not just identify opportunities, but also deliver value across the company.
- Processes: A successful COE considers important processes that include modeling best practices and project methodoligies. But the focus on process goes beyond the four walls of modeling and project delivery. Mature COEs build out infrastructure and processes that support connected decision-making and alignment across the organization. They define a formal engagement plan with business leaders to feed their activity pipeline, including collaboration to approve, prioritize, and enable initiatives. Leading organizations also establish a structured communication plan to drive awareness of capabilities and the value of the COE. They may also set up a formal feedback loop connecting COE value with the business to drive continuous improvement.
- Technology: Technology adoption is a critical factor in the success of a COE. Mature COEs effectively leverage technology to support a broad spectrum of business problems, evaluating and answering supply chain questions across both strategic and tactical horizons. They deploy integrated solutions to enable an agile decision-making process. Advanced COEs leverage technology to extend participation and collaboration with business partners to drive incremental value and connected decision-making.
- Strategy: A mature supply chain design COE drives alignment with executive stakeholders across the business, including finance, production, operations, transportation, warehousing, planning, and more. The goal of this alignment is to deliver insights and decision support in line with corporate objectives and priorities. The alignment enables the COE to be globally defined and formally integrated with a structure to support global and local needs. An advanced COE plays an important role in shaping the overall supply chain strategy. Stakeholders across the organization view supply chain design and planning as a required function and a core competency.
What does a mature supply chain COE look like?
Building a mature, sustainable Supply Chain Design COE implies an evolution. Many organizations might start with one or two modelers focused on a singular function within the supply chain. Then, as they demonstrate their value to the organization, they grow and expand. So don’t expect a transformation overnight. But as you seek to establish and develop your supply chain design COE, these are some characteristics to keep in mind.
Characteristics of a mature supply chain design COE:
- Takes a holistic view of the supply chain.
- Involves the broader enterprise.
- Engages in continuous learning.
- Drives continuous design with repeatable processes.
- Maintains a catalog of models.
- Is able to adapt to the rapidly-changing landscape of the modern supply chain.
Supply chain design capabilities are critical in an era of rapid change and disruption. Formalizing institutional knowledge and putting supply chain design at the forefront through a COE can reduce risk, improve resilience, and turn challenges into a competitive advantage.
New to continuous design?
You might want to start with a primer on continuous supply chain design first. Download Continuous Design Outsmarts Disruption.
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