The impact of COVID-19 is likely to be felt for many months and years to come, and perhaps most acutely, in supply chains. Worldwide, the sector has struggled to cope, as peaks and troughs of demand, logistics bottlenecks, border restrictions and workforce challenges all contributed to severe disruption. In fact, research shows that more than 90 percent of the Fortune 1000, including many technology companies, suffered supply chain issues1.
But while the pandemic exposed endemic weaknesses, such as a paucity of sophisticated data, insufficient risk management and a fundamental lack of agility, it has also given leaders the impetus to reset and rethink.
There is opportunity now to seize the momentum of those reflections. There has never been a greater need to put focus on transforming the supply chain function in your organization. With consumers hoping for a return to the norm – where they can buy what they want, when they want – and businesses anxious to satisfy those needs, supply chain leaders have the opportunity to reset strategy, processes, technology and people. Your organization and your customers will likely thank you for it.
But how do you make supply chains future-resilient in this new reality?
Clearly COVID-19 cast light on the urgent need for more robust global supply chains, in order to weather unforeseeable disruptions in the future. The future-ready supply chains in the new-normal should be customer-centric, able to operate in the ever-changing digital world with agility, and do so profitably in order to help be a revenue driver for the business.
The data must-do
It’s now imperative, rather than optional, to accelerate the data enabled, digital technology that many companies had intended to implement prior to the pandemic, but deferred due to fragmented efforts, legacy systems, or other factors. Businesses that invest in robust cloud digitization to bring data and insights into their supply chains are able to enhance the quality of supply chain planning. This can set the organization up to be more agile and responsive and help improve the ability to predict issues, support decision making, manage risk, boost resilience and plan for success. The use of the internet of things and mobile connectivity should further enhance the supply chain, enabling a function that is fully powered by a decentralized ecosystem, based around a network of relationships.
“The supply chain mantra is changing from efficiency and low-cost country or territory sourcing, to supply chain resilience and visibility to help reduce complexity and uncertainty,” Peter Liddell, Partner, Global Operations Center of Excellence Lead, KPMG explains. “The acceleration of digital transformation can be key to that new way forward.”
Your customer at the heart of your people
The technology is vital, but is it only part of the puzzle – a customer-centric mantra should permeate the supply chain, its people and processes. This starts with integrating the principle into strategy and vision, then progresses by bringing support and new skills to your team, who in turn, should be properly prepared for change by their colleagues and leaders.
And when it comes to those new skills, the future of the supply chain calls for a blend of sector expertise and technical ability. People’s experience and skills across the discipline, such as in planning and procurement, can be codified to help create digitized standard processes; further, human expertise combined with AI can produce game-changing modelling and insights.
Bringing it all together
How KPMG Powered Enterprise | Supply Chain can help build your future ready supply chain.
Future success for supply chains depends upon being purpose-built and built to last. To help make this happen, KPMG Powered Enterprise | Supply Chain (Powered Supply Chain) includes a pre-built operating model based on six ‘layers’ of change with pre-configured processes. The KPMG Target Operating Model (TOM) helps organizations execute an operational re-set, and implement cloud technology, across the changes already highlighted above – and more. The six layers are:
- The overall functional process: Within this layer sits the hundreds of predefined processes for finance, HR, IT, customer operations, procurement, supply chain, cyber and risk.
- People: Containing aspects of an organization’s supply chain workforce. Upskilling employees for the digital age is an essential part of building supply chain resilience.
- Technology: There are several approaches and technology solutions that can be used to provide precision visibility into supply chains. These include advanced tracking and tracing predictive analytics, cognitive decision centers, and intelligent automation. Each of these, when deployed correctly, can streamline processes and help change the fundamentals of supply chain management.
- Performance, insights and data: Includes tracking KPIs, process performance indicators and enhanced reporting beyond the vendor supplied reports to help satisfy your organization.
- Governance: Addresses the risks involved in the supply chain process, as well as the segregation of duties and policy identification.
- Service delivery model: Addresses the overall architecture of the delivery model, from what extent processes should be centralized, to a shared service center, centers of excellence and outsourcing operation models to help optimize service delivery.
Why KPMG Target Operating Model?
Powered Supply Chain solution guides you through your end-to-end transformational journey. At the heart of it, the KPMG Target Operating Model shapes your business transformation and helps you map out the optimum way you can operate in the future. Its real power is to help you get to where you need to be with lower risk, but also sooner, so the benefits can be realized earlier.
By working with Powered Supply Chain for your supply chain business function, you can also overcome the traditional shortcomings of a complex cloud transformation project by being able to validate the decisions you make along the way.
Powered Supply Chain is a strategic approach to transformation that offers the agility required for dynamic evolution. What you build today will become a solid foundation and context for what you may need tomorrow. The opportunity is now to create a seamless, flexible supply chain to not only survive but thrive in potential future turbulent times.
Learn about some of the benefits you can experience through digital adoption and transformation.
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