In today’s world, companies are coping with the evolvement of many significant shifts. Customer and consumer behaviors are changing, traditional channels are moving towards E- and omni channels, operational excellence is under pressure and the sustainable agenda is more important than ever. As a result, companies are forced to play catch-up in non-core areas of their business. These disruptions and changes require the reshaping of supply chains such that they are customer-centric, resilient, agile, responsive and transparent. Hence, companies got to get back to the drawing board to create new supply chains and capabilities – they need to shape the future of supply chain.
Create future proof supply chain capabilities
The need for new operating models
In order to deal with today’s and future’s needs, Supply Chain Executives must cater to higher velocity and differentiated supply chains. This, together with the increasingly intertwined web of partners that is needed to meet these service expectations, asks for new operating models. The main elements that can be distinguished which have a major influence on operating models of companies are the following:
- (1) Everything as a Service – New business model shifts require companies to deliver partnerships in the go-to-market proposition. An increasing part of the service is outside the direct control of the internal organization.
- (2) Changing nature and value of assets – There is a huge shift in the technology and nature of assets to be managed. Technology, digitization and automation are increasingly becoming – or already are – the core assets of supply chains controlled by organizations.
- (3) Workforce of the future – Driving innovation and the right skillset are key whilst balancing the value of experience. Creating a new organization to deliver a new operating model can therefore be seen as walking a tightrope for years.
Focus on Collaboration
In the last 7-12 years, technology shifts have opened up possibilities to deliver future proof capabilities, drive efficiencies and, in the end, manage higher supply chain complexity and the related contracting complexity. For example:
- Integrated Business Planning (IBP) / Sales & Operations Planning (S&OP) – Step change in collaboration across different teams and functions to make sure the company runs as a well-oiled machine. Not only by a required focus on governance and management routines, it can also be enabled by various tools that are available in the market.
- Control Towers – These improve visibility and provide insights for rapid decision making. They reduce the dependence on personal and non-fact-based decision making.
- Transport Management Systems – These systems manage the complex network of logistics service providers to cater to the differentiated service requirements of diversified customer and product groups.
- End-to-end transparency – Such transparency will be highly purpose-led and focused on sustainability impacts. Build an ecosystem of partners to improve supply chain visibility and traceability across multiple tiers to address issues related to carbon footprint, human rights and other key topics.
Revisiting functional strategies is key
- Network strategy – Having the right supply chain network and supplier ecosystem in place to meet the service requirements. For example, manufacturing and warehouse locations, distributors, retailers, and partners for different promises.
- Manufacturing strategy – Having the right manufacturing strategy in place on all levels – from the macro level, such as ecological footprints, make vs. buy decisions, productivity and governance to the micro level, such as line utilization, lay-out, processes, etc.
- Complexity management (SKU and customer) & cost-to-serve strategy – Having a tight control on cost-to-serve is a key requirement for companies and tracking the cost of complexity is a key capability being developed by companies.
Powering the Core
A shift in functional strategies and collaboration asks for a small and robust core that enables the strategic and tactical tools. This is driven by ensuring that core operating processes are standardized and are transferred to the cloud and will involve functions such as:
- Powered Supply Chain – Enabling companies to rapidly deploy standardization at scale and implement cloud enabled ERP platforms.
- (Digital) Procurement – Supporting organizations to truly engage with an ecosystem of suppliers to ensure the effective delivery of products and services and to optimally map suppliers to internal and customer demands.
- Supply Chain Data & Analytics – Providing the latest tooling, algorithms, data models and visualization to take data-driven decisive actions.
Adapt to new trends with Supply Chain Transparency
Supply chain transparency is moving up on the corporate agenda. Those with better insights in their supply chain and consumer base will come out as winners, enabling them to either increase their level of responsiveness during disruption or quickly adapt to new trends.
In our vision paper you will read some of the takeaways based on a blend of KPMG knowledge and experience, the results of our ‘Supply Chain Transparency Survey’ and interviews – conducted by KPMG – with companies that operate across different parts of the supply chain.
Supply chain areas we support and enable
We understand that making an end-to-end supply chain work coordination among numerous functions within supply chain with business teams at all interacting points is required. KPMG can help you to optimize your supply chain in the areas below.
Supply Chain Network Strategy
Redesign the manufacturing and warehousing network to deliver to customer service and cost expectation.
Operating Strategy & Cost
Enabling functional strategies and clarify roles and governance. In addition to dentification, design and delivery of cost optimization initiatives.
Smart touch Supply chains
Digitizing your supply chain using latest technology, and connecting them for tactical and strategic decision making in a control tower and Digital twin.
Complexity reduction and SKU rationalization
Product portfolio lifecycle linked strategies. Enable SKU level cost and economic contribution to align with Commercial teams on operational complexity required.
Supply Chain Data & Analytics
Using the latest tooling, algorithms and visualization to enable organization to take decisive actions. With clearly defined data models, and definition that make you run faster.
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Category management, spend reduction strategies and enabling tools to drive and manage the eco-system of suppliers.
Internal Audit and forensic services
Helping Audit teams with outside-in insights and the latest methods to assess the latest digital tools used by the company. Fraud prevention and physical forensic audits to drive trust.
Tax efficient supply chains (TESCM)
Multi jurisdiction flows require a good tax structure, which includes transfer pricing, customs, direct and indirect taxes (VAT / btw) to ensure compliance and maximize firm value.