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Need money? The common answer is to squeeze supply. For many companies, the supply chain is the de facto bank for the company. Through functional excellence and continuous improvement programs, companies generated cash to fuel growth. Supply chain became the place to go get cash. However, after years of harvesting the low-hanging fruit, the savings are getting tougher. For many, the well is effectively dry. Yes, companies can still wring pennies from their functional excellence programs; but they want bigger savings. To gain these, they need a new approach. They need to turn the supply chain over, lay it horizontally, and ask a different set of questions.
The key to driving this type of breakthrough performance is to turn the supply chain on its ear. Focus on the design of horizontal processes from the outside-in. Horizontal processes include margin management, contract management, demand-shaping programs, working capital management, sales and operations planning, supplier development, and new product launch.
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