Blog by RICH GAIN SCM
Supply chains are ruled by uncertainty. Their performance is largely unpredictable- Goods may be damaged during transit, shipments may be held up causing delays, and sales may be nowhere near forecast. And organizations spend days or even months reacting to these uncertainties and managing the after-effects. In volatile economic markets the impact of such uncertainties can be huge. And this makes it all the more essential for organizations to adopt a strategic model that can help overcome challenges and create a seamless supply chain. Such a strategic model ideally involves these stages: Stage 1- Analyzing the Business Strategy: The foremost step in developing a strategic supply chain is to understand the objectives of the business, and how the organization chooses to compete in the market. This forms the foundation of the supply chain model and helps in designing the supply chain to serve the competitive goals of the business rather than just the operational goals. Stage 2- Evaluating the Existing Model: Assessing the current supply chain model is an essential step to identifying problem areas and weak links which have been affecting the performance of the supply chain. This step also helps identifying the risks involved in the supply chain, based on which the organization can take measures to mitigate these risks and enable better performance. Stage 3- Developing the Strategic Model: Once the problem areas and risks have been identified, there is a clear picture about the setbacks that have to be overcome by the new model. At this stage, all stakeholders in the supply chain have to participate and give their inputs. There are several considerations to be made at this stage including the cost, resources that may be required, whether or not supply chain outsourcing is appropriate for the business, are there any creative logistics solutions which may be adopted for better performance, etc. The supply chain management responsibilities are assigned, an implementation plan is created, and status tracking capabilities are developed. Stage 4- Executing the New Model: Based on the implementation plan developed in the previous stage, the new model is rolled-out. Performance management plays a key role here. The success of the supply chain greatly depends on how the performance in managed during and after the implementation. This is followed by tracking performance. Analyzing the performance metrics gives a clear picture of how the new supply chain model has been working and whether it requires any further improvement.