The research shows that only 9% of companies around the globe have a Supply Chain Strategy. How do you know if you have a successful or efficient Supply Chain without a plan? A study shows that a company’s stock price drops by 8% when the company experiences a glitch in its supply chain.
Another research shows a supply chain can account for 50% to 70% of a manufacturer’s total costs of doing business and more than 50% of its assets. This same research shows that 89% of all executives say Supply Chains are core to Business success. So do you have a good Supply Chain Strategy?
A good Supply Chain strategy needs to answer one key question: What is your company’s Value proposition? Does your company compete on Cost, Differentiation, or Focus (Flexibility, Speed)? Some other key components of a good plan should cover your operating model (Lean, Six Sigma, etc.), your people, and what your demand looks like.
A few other pointers or questions to think about as you develop a plan:
- Does your Supply Chain strategy fit with your corporate strategy?
- Does your company build in supply chain flexibility to extract or moderate risk?
- Does your company manage your supply chain holistically rather than just managing individual components of your supply chain?
- Does your company have demand visibility from the customer down to the lowest tier supplier?
- Does your company invest more money than necessary in low return, low impact areas?
Your plan doesn’t have to be perfect but one that every employee and supplier can understand and execute.