Executive Briefings

How to Think About True End-to-End Supply-Chain Transformation

How should companies approach the challenge of end-to-end transformation? What exactly does the process encompass? And what are the benefits of a successful initiative? Michael Albritton, director of AlixPartners, supplies the answers.

In order to achieve end-to-end integration of processes and functions, companies need to think beyond their traditional supply-chain activities, Albritton says. In particular, they must acquire a keen understanding of the customer’s needs, with an eye toward filling in any service or process gaps that might emerge. "At the minimum," he says, "they should be trying to understand the current market strategy of the client."

The term “end-to-end” means starting with the customer and working back through every step that’s crucial to a supply chain, including distribution, manufacturing, design and product engineering, Albritton says.

Measuring one’s performance is essential to ensuring revenue and market-share growth. Key metrics include fill rate and on-time delivery. A true end-to-end perspective can boost earnings by between 20 and 40 percent, Albritton says. In addition, leaders in that area often see working-capital reductions of 20 to 30 percent.

Putting those metrics into place can be challenging. Typically it requires the implementation of a decision center that is continually aligning key performance indicators with the customer’s ever-changing requirements.

Backing it all up is the necessity of having an executive mandate that ensures the synchronization of all functions that make up the supply chain. “You have to have a strong change-management function,” Albritton says.

Companies that stand to benefit the most from that strategy include those with large, disparate customer bases, a broad variety of SKUs, long product tails and a need for constant innovation. “We see a lot of it right now in oil and gas and consumer products,” he says.

To view the video in its entirety, click here

In order to achieve end-to-end integration of processes and functions, companies need to think beyond their traditional supply-chain activities, Albritton says. In particular, they must acquire a keen understanding of the customer’s needs, with an eye toward filling in any service or process gaps that might emerge. "At the minimum," he says, "they should be trying to understand the current market strategy of the client."

The term “end-to-end” means starting with the customer and working back through every step that’s crucial to a supply chain, including distribution, manufacturing, design and product engineering, Albritton says.

Measuring one’s performance is essential to ensuring revenue and market-share growth. Key metrics include fill rate and on-time delivery. A true end-to-end perspective can boost earnings by between 20 and 40 percent, Albritton says. In addition, leaders in that area often see working-capital reductions of 20 to 30 percent.

Putting those metrics into place can be challenging. Typically it requires the implementation of a decision center that is continually aligning key performance indicators with the customer’s ever-changing requirements.

Backing it all up is the necessity of having an executive mandate that ensures the synchronization of all functions that make up the supply chain. “You have to have a strong change-management function,” Albritton says.

Companies that stand to benefit the most from that strategy include those with large, disparate customer bases, a broad variety of SKUs, long product tails and a need for constant innovation. “We see a lot of it right now in oil and gas and consumer products,” he says.

To view the video in its entirety, click here