Many companies and executives complain about growing supply chain complexity, but how many proactively really do much to reduce it on a continuous basis?
The lack of building simplicity and agility into supply chains was one of the primary themes in a recent presentaion by Jake Barr, at the LLamasoft users conference in Ann Arbor, MI. Barr is the recently retired Global Director of Supply at Procter & Gamble, now head of BlueWorld Supply Chain Consulting.
In his presentation, Barr agreed that we are in a period of unprecedented supply chain challenges and complexity, what he said was a "perfect storm" of factors, from margin pressures to demand variability to increasing government regulation.
There are three design levers to manage and even get on top of supply chain complexity, Barr said: process design, physical network design, and organizational design, makiing what SCDigest will call a "triple D" approach, as shown in the graphic below from Barr's presentation:
Barr said that companies tackling complexity generally are most likely to focus on process design. But that is not enough. You can also reduce complexity and build in agility with a winning physical design that is focused on providing agility. Not many companies do this well on a consistent basis, Barr said.
In fact, Barr said supply chain design is really the "third discipline" of supply chain management, joining planning and execution.
But even less attention is usually given to organizational design, Barr noted, with most companies really operating supply chain organizational structures from decades ago, which therefore are not on;y simply out of touch with the current times and needs but which also sustain and add to supply chain complexity (e.g., too many "touches") and serve as big barriers to agility.
SCDigest strongly agrees.
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