Creating an overall supply chain strategy

Creating an overall supply chain strategy into functional strategies that are fully aligned.

Assignment

A large medical equipment company wanted to define a supply chain strategy for each supply chain in the company based on clear commercial requirements gathered by and aligned with commercial teams, and have a joint common understanding and agreement of this supply chain strategy by both commercial and supply chain leadership teams.

The supply chain organization to then break down this overall supply chain strategy into functional strategies that are fully aligned.

Project summary

The company recently formed a cross-functional supply chain organization, consisting of procurement, manufacturing, logistics, planning and customer service. Historically these functions made strategic plans by themselves with little cross-alignment and also with little involvement of the commercial teams.

However, in order to respond faster to changing customer requirements and increase resilience to be better prepared for the ongoing major disruptions worldwide, these functions needed to work more closer together to define a joint overall supply chain strategy.

Our approach

Based on BCI framework to design the right supply chain strategy the following steps were done:

• First developed a communication package to commercial leaders explaining the supply chain strategy approach & purpose, and how it is an input to supply chain strategy. Then the commercial and supply chain team jointly defined customer requirements and company value proposition priorities for each supply chain.
• Used the BCI framework to identify which of the 6 overall supply chain strategy archetypes has the best fit for each supply chain separately. This was done through an inter-active cross-functional workshop with the whole supply chain team. It resulted in selecting an ‘efficient’ supply chain for capital equipment and ‘continuous replenishment’ supply chain for disposables.
• This overall strategy was then cascaded down by function in order to drive the strategy/plans/roadmaps in each function.

Result

Main achievements:

• Defined clearly the customer requirements through a joint approach by Commercial and Supply Chain teams, improving the overall accuracy and understanding.
• Supply chain team worked out the supply chain strategy in close alignment with Commercial teams, further increasing the collaboration between the commercial and supply chain organization, which is crucial for a high performing enterprise.
• By cascading down the overall supply chain strategy to individual functional strategies using a proven framework, ensured that all functions are aligned, understand each others objectives, constraints and how they all interact. This makes sure that functions like Procurement, Manufacturing and Logistics don’t sub-optimize for themselves, but all contribute to the same overall goal.