Investing more in the supply chain and viewing it as a competitive advantage leads directly to greater earnings, according to more than 600 market stakeholders in the Geodis 2017 Supply Chain Worldwide Survey.
While the importance of supply chains is widely accepted, the path to success is not so obvious.
One of the smartest ways of finding best practices and learning precisely what it takes to excel is to look at what top companies have been doing. If we turn to Gartner’s annual Supply Chain Top 25, we can see which companies are leading the way.
Top Supply Chains
The top 10 in this year’s list are Unilever, Inditex, Cisco Systems, Colgate-Palmolive, Intel, Nike, Nestle, PepsiCo, H&M and Starbucks. Gartner’s formula to calculate this ranking is quite complex. The Gartner IT Glossary defines a demand-driven value network (DDVN) as “a business environment holistically designed to maximize value of and optimize risk across the set of extended supply chain processes and technologies that senses and orchestrates demand based on a near-zero-latency demand signal across multiple networks of corporate stakeholders and trading partners.”
It's also interesting to note that one of the top trends uncovered in the analysis is a focus on the customer experience. Gartner defines CX as "the customer's perceptions and related feelings caused by the one-off and cumulative effect of interactions with a supplier's employees, channels, systems and products."
Supply Chain Orchestration
Supply Chain orchestration is about designing and implementing a network that delivers the perfect balance between customer service and profitability — a network that is agile, fluid and proactive. It means integrating disparate services, partners and systems to establish full visibility into the end-to-end lifecycle of every order — and having the ability to act dynamically and decisively to leverage valuable insights and optimize flows.
Developing or adopting SCO is an important step in the evolution and maturity of an enterprise’s supply chain. In the annual Deloitte and MHI 2017 report that surveyed 1,100 manufacturing and supply chain executives from companies with annual sales of $100m, 80 percent said they believe the digital supply chain will be the dominant model within five years. But just 16 percent say it’s happening today.
While establishing visibility is an important first step, having the ability to take action on that visibility in real time empowers companies to make changes that can have an important impact on customer satisfaction, operational excellence and overall cost.
Consistent But Flexible
Another key piece of the puzzle is performance that consistently and reliably adheres to a set of standards for customer service excellence. Having the flexibility to switch between potential fulfillment routes and partners is crucial here. By employing a fully configurable SCO system, businesses can automate order fulfillment and returns handling based on predetermined specifications tuned for customer experience and integral costing. But it’s only by safeguarding flexibility that organizations can seize fresh opportunities to maximize value creation.
The beauty of this level of configurable automation is that it frees experienced employees to focus their efforts on exceptions that require greater attention. This enables them to implement better standards — where no order is ever allowed to slip through the cracks.
In Pursuit of Predictive Insights
While an outside-in focus starting with the customer is highly prized, the most successful supply chains are also using their data to generate insights and proactively mitigate issues.
The pursuit of excellence is an ongoing journey, so supply chain leaders are always looking for ways to optimize order flows, minimize inventory levels, lower transportation costs and maximize value. Successful supply chain leaders can better anticipate and adjust to shifts in the market. They maintain high levels of customer satisfaction because they have a holistic view of their service levels, supply chains and data that help generate actionable predictive insights.
Martin Verwijmeren is co-founder and CEO of MP Objects.
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