Companies are seeing a significant shift in customer behavior which is driven by more awareness and experiences across different platforms, forcing companies to play catch-up in a non-core area of their business . Additionally there a significant change in terms of channel of engagement (towards online and e-comm) and service expectations amongst customers, requiring companies to get back to the drawing board to create future proof supply chain capabilities.
The need for new operating models
Supply chain executives have to deal with the needs of the consumer by catering to a higher velocity supply chain, with a need for differentiation (by regions and sub-business). Plus the increasingly complex web of partners required to deliver to the service expectation, will be leading to new operating models. This elements have a huge influence on operating models:
- Everything as a service - New business model shifts requiring companies to deliver partnerships in the Go-to-market offering. An increasing part of the service is outside the direct control of the internal organization
- Changing nature and value of assets - There is a huge shift in the technology and nature of assets to be managed. Increasingly technology, digitization and automation are the core assets of supply chain controlled by organizations
- Workforce of the future - Driving innovation and skill-set is key while balancing the value of experience. Hence creating the new organization to deliver the new Operating model is like walking on a tightrope for years.
Revisiting functional strategies is key
This changing landscape requires Chief Operating officer (COO), Chief Supply Chain officers (CSO) and business leaders to drive change, this is enabled thru revisiting ‘Functional Strategies’. For operating model redesign by re-looking at outdated assumptions on centralization of activities, outsourcing, postponement strategies and partnership management capabilities. It is of major importance to improve:
- Network Strategy - Do we have the right supply chain network in place to deliver to the service requirements i.e. manufacturing locations, warehouse locations, dealers and partners for different promises
- Manufacturing strategy - From the Macro i.e. Footprint, Make vs Buy, productivity and governance to the Micro i.e. line utilization, layout, process etc.
- Complexity management (SKU and customer) & Cost-to-serve - 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.
Focus on Collaboration
Technology shifts in the last 7-12 years has opened up possibilities to deliver future proof capabilities, drive efficiencies and in the end manage higher supply chain complexity and related contracting complexity. For example:
- IBP / S&OP - Step change in collaboration across different teams and functions to make sure the company runs like a well-oiled machine. This required focus on governance and management routines but are also enabled by a number of tools in the market
- Control towers - To improve visibility and provide insights for rapid decision making. Reducing dependence on specific people for their ‘Gut feel’
- Transport Management systems - To manage the complex network of logistics service providers catering to the differentiated service requirements of different customer and product groups.
Powering the Core
A shift in functional strategies and enabling collaboration, requires a small and robust core that enables the strategic and tactical tools. This is driven by ensuring core operating process are standardized and move to the clouds.
- Powered Supply Chain - enables companies to rapidly deploy standardization at scale and also implement cloud enabled ERP platforms.
KPMG can help to optimize your supply chain
Supply Chain areas we support and enable
Powered’ Supply Chain Transformation
Enables companies to rapidly deploy standardization at scale and also implement cloud enabled ERP platforms.
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.
Procurement
Category management, spend reduction strategies and enabling tools to drive and manage the eco-system of suppliers.
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.
Sustainability & Circularity
Driving the sustainable agenda by enabling internal and external transparency of data on CO2, workforce, and other key topics of concern,
Internal Audit and forensic services
Helping Audit teams with outside in insight and 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 (VAT / BTW) to ensure to comply and maximize firm value.
Contact our specialists for more information
Johan Smits
Head & Partner of Supply Chain Services, KPMG
Haijo Kampinga
Partner Supply Chain Services, KPMG
Jerwin Tholen
Partner Sustainability, KPMG
Jort Meijer
Senior Manager Supply Chain & Procurement Services, KPMG
Ramanathan Venkataraman
Senior Manager Supply Chain Services, KPMG
