A Guide to Success: Supply Chain Management Transformation

Changing times calls for change in strategies and thinking. Industries must be agile – is more of a need of the hour than a choice, and a sector  that needs to adapt and evolve quickly is the supply chain industry. But how does this transformation start? In conversation with Winfried Rockensteiner, a supply chain transformation enthusiast, focusing on a holistic, sustainable and intercultural SCM approach; we deep dive into the fundamental understanding, support needed and key aspects to keep in mind for supply management transformation that will gear up today’s businesses to tackle the problems of future, by creating a strong core.

1. Why is supply chain management transformation required?

   To start with the transformation process, the question an organization needs to answer is, what is the motivation to embark on such a transformation journey – this must be a strategic desire, which can only be implemented right if the institution has understood the need and expected benefits. And yes, looking at the current market and business volatility, caused by various disruptive elements, it is a need of the hour.

   
   

   New technology & digitization, the pressure for sustainable business models, volatile behavior of key market participants and the shift of regional political power fuels the transformation process, therefore creating avenues for growing trajectory of change. The purpose behind supply chain management transformation is to align the orientation of an organization to ensure reaping the maximum benefit – from the starting point till the end in an E2E approach. A roadmap must be chalked out for the journey even before the tools & processes are finalized, based on a transparent and honest SWOT exercise.

2. How do you see resiliency and cross-functional management being part of this process?

   Resilience management must become an integral part of supply chain strategy. There are multiple verticals in a company’s structure – like manufacturing, sales, HR, and so on, therefore the focus needs to be on cross-functional process and solution thinking that involves integrating it all along the entire value chain.

3. Where does the responsibility of the supply chain management transformation lie?

It should be a part of your company’s operations strategy.  Depending on the organizational set of your business, resilience management is closely connected to business responsible units. Finally, they need to decide how much resources they want to pour into risk mitigation and what level of risks they are willing to accept. And don’t think that external resources like consultants can do the job for you. External conceptual support can be helpful to kickstart the resilience transformation process but it lies within the responsibility of the company’s leadership to make it happen.




However, involving external expertise along the transformation path can definitely be of value. Software companies like 3SC are instrumental to help organizations to use AI and Data Analytics to enable Data Driven resilience management and foster the supply chain transformation process, that helps in a seamless supply chain management transformation. Not all functions that are required would come under the purview of an existing structure, therefore that additional expertise is required to bridge the gap by training and empowering your associates through technology and competence.

4. Beside that what are the key points to be focused on for a transformation?

You need to have a digital roadmap in place and the right people who are competent enough to take over and develop this transformation process. Furthermore, organizational adjustments are required, to establish more agile organizational formats while upgrading its network and various functions. And finally, you need to have the right tools; a sound and fundamental knowledge about your own business processes to explore and implement the best way forward. All this needs to run in parallel.




Another crucial success factor is a radical cross-functional collaboration. If a company is working in silos, with no understanding of the purpose of the supply chain because there is has been very limited interaction with the relevant stakeholders, I am convinced, it will fail.

5. How important a role do customer needs play here?

With the advent of new technology, the customer expectations are changing too, which means the supply chain needs to step up to meet them. I am going to explain it with the example of the automobile industry. The automotive businesses in the past 20 years were based on a more-or-less stable business model and environment. With respect to their supply and customer base, car manufacturers had a very good understanding of their business model and respective operation processes. In the last couple of years, we have experienced an erratic change in this business ecosystem.




The contextual environment changed and thus, the expectation and the behavior of market players as well. Drastic reduction of lead-times, reactivity, agility and a new approach towards customer centricity are key success factors which now need to be monitored and addressed in our supply chain set up.

We are in the process of designing a new value chain. Being from the industry, we have end-to-end visibility. Supply chain transformation is changing the market conditions and becoming more and more important which requires different leadership, different tools, a level for competence and the drive to make it all happen.