Six Strategies for Building Your Supply Chain Transformation Roadmap
Creating a Roadmap is a Valuable Process for Any Progressive Business
By Frank Polito, Director SCMO2
SAP has launched an almost overwhelming suite of new supply chain planning technologies. S/4HANA, IBP, Ariba, and new analytics capabilities. Legacy applications like ECC/APO technologies will co-exist for some time until companies decide when and how to move applications to the latest releases and versions that best suit their business needs. This can be confusing and the path unclear as executives decide where to invest in supply chain functionality to drive continuous improvements and better results.
Our Supply Chain Navigator approach is a systematic analysis to quickly assess, design and optimize a company’s supply chain from four key perspectives: people, process, technology and data. It creates a complete 360-degree view of their options for prioritizing investments while still getting the best returns and targeted outcomes within their supply chain organizations.
Every company we work with ends up pursuing a unique path to achieve their goals. There is no right or wrong way. Rather, there are paths that lead to the desired goal and paths that do not. Which, I guess could be seen as right or wrong. But where a company needs to end up is a decision that executive leadership must make, and there are many valid outcomes that can be achieved.
From our collective experience working through this process with dozens of companies, we have identified six top strategies that a supply chain transformation roadmap can be written to accomplish. Each emphasizes a different strength, but all result in positive change and new value for the company as a whole.
Budgeting and Staging Initiatives with Business Case ROI
Corporate improvements driven by specific business case investments and returns will frequently require changes to how a supply chain is managed. Creating a roadmap for the purpose of budgeting and proving an initiative can be a very helpful method for justifying a change and lowering the risk that such a change does not deliver the expected benefits.
Merging, Acquiring or Divesting of a Business Unit or Division
Major corporate transactions almost always result in major changes to a supply chain. Developing a roadmap that demonstrates the impact that a sale, purchase or merger could have offers additional intelligence that can support (or refute) the value of that deal. This is not something you want to explore after closing on a key transaction.
Prioritizing Changes to Support Rapid Growth or Market Slowdowns
Sometimes, a rapid expansion in product demand (or a sharp decline in sales) requires the transformation of a supply chain to better allocate resources and ensure inventory levels remain inline long term. Proper planning for those changes can help a company determine how to properly prepare so as not to overinvest in (or under scale) a supply chain system.
Crystalizing a New Supply Chain Leader’s Vision
Changes in leadership almost always come with a change of vision, and seeing old processes from a new perspective is often very helpful in creating value. Gain insights on how to achieve this new vision by developing a detailed supply chain transformation roadmap that outlines what processes will change and what benefits can be expected as a result.
Validating IT Strategy Impacts on the Supply Chain Group
IT and supply chain are both completely different and yet completely intertwined, all at the same time. Changes to any one side are always going to create an impact to the other. When planning necessary strategic changes to a corporate IT architecture, downstream impacts to the supply chain are inevitable. A roadmapping exercise can help provide clarity on what, and how, changes to IT can resultantly change a supply chain.
Justify and Drive Continuous Improvement Programs
In any business, and especially in manufacturing, a lean discipline of continuous improvement requires management and executive leadership to frequently examine systems and processes to evaluate effectiveness. A periodic supply chain transformation roadmap is the perfect tactic for analyzing how improvements to the system and platform may generate positive outcomes that would contribute to overall lean initiatives.
A roadmap for implementation, migration, redesign or upgrade paths is a detailed plan that includes resources required, timelines, costs, staging of investments and business case inputs that support the goals. This can be applied to one area of the supply chain or across the entire system, and can include analytics and metrics to support (or refute) the plan.
There are myriad reasons to develop a roadmap for your supply chain transformation, and it does not always require that a project be implemented. Sometimes, just understanding how a plan can affect the outcome is helpful in making a positive business decision.