It is no secret that many organizations are facing increased complexity as they attempt to manage numerous, multi-departmental processes and a wide range of IT systems. This often results in fragmentation between mission-critical software and data, and this challenge is certainly no stranger to supply chain management professionals. The good news is that it's not always necessary to start from scratch when crafting a strategy for improvement. Additionally, looking at what other companies have done can also save a lot of time and hassle as organizations pursue their own supply chain optimization initiatives.
Gartner's Top 25
Each year, Gartner publishes its Supply Chain Top 25 report, the latest of which was released in May. For reference, the top five companies identified were Apple, McDonald's, Amazon Intel and Unilever. However, what's more important than the companies themselves is what they're doing to effectively orchestrate their supply chains. Analysts identified three common traits among top performers:
- Willingness to explore new best practices and facilitate synergy among business partners
- Focus on partnerships that encourage growth
- Tendency to inspire supply chain talent
One of the interesting things about the above factors is that they all relate primarily to business culture and communication among various companies. However, it is important to note that supply chain management software plays a crucial part in allowing for these high-level transformations to take place. In fact, the first recommendation Gartner makes is to unify core processes and technologies. Researchers emphasized the following supply chain management solution features:
- End-to-end segmentation
- Multi-level supply chain visibility
- Integrated analytics to measure factors such as time-to-serve and demand
This choice of focus shows just how deeply connected business technology and processes must be for success. For instance, end-to-end segmentation plays a significant role in an organization's ability to develop synergies among all of its collaborators. Especially for those working with businesses of many different sizes, developing unique strategies better ensures that each partner is aligned with supply chain processes and goals. Gartner's Top 25 also recognize that effective supply chain management requires extensive collaboration form multiple departments.
"Leading high-tech and CP companies, for instance, are approaching new markets with cross-functional teams that include sales, marketing, operations and IT to holistically design a synchronized entry strategy - starting with the customer and designing the right product, pricing, margin targets, service levels, and supply chain network design and trade-offs that will all work together to achieve the goal," the report stated.
Rising in supply chain effectiveness
It is not surprising that organizations like Amazon made the list, with analysts commending it for its emphasis on unmatched customer service. However, Unilever received special mention for increasing six rankings. One quality analysts highlighted is the company's ability to create unified strategies on a global level while being able to implement on a local scale. In addition, Unilever adapts its production based on downstream data to better respond to demand and meet its partners' needs quickly.
The lesson here is that flexibility is key to supply chain success, whether it's the ability to respond to demand more effectively or optimize processes according to partners' unique capabilities. This need to adapt in real time is heavily dependent on how much visibility organizations have over their entire supply chains. The more accessible this information is, the easier businesses cna make strategic improvements.
Finally, business and IT leaders must ensure that their technology implementations and processes changes are focused toward a set of core objectives. Exact goals may be vary for each organization, but one critical element should be in the foundation of all modern supply chain management strategies: a focus on the customer. Commenting on Gartner's report, CMSWire contributor Deb Miller observed that many of the innovative best practices found among leaders are centered around improving customer experiences. Miller compared this trend to what has already occurred in marketing, where analytics-driven decision making has paved the way for better targeted ad campaigns and personalized offers.
"To me, it has become very clear that both the oldest and the newest orchestration challenge for the supply chain is to work in partnership with an outside-in customer centric approach," Miller wrote. "That is why I believe that marketing is going to be the supply chain leader's new best friend forever. What differentiates the best supply chain companies from the rest is an unwavering focus across the business on the customer and, for the future, the technology to be able to integrate and leverage that focus."
Integrating the numerous processes and applications that must come together to achieve a customer-centric supply chain may seem like a tall order. It is true that shifting practices on such a large scale can be disruptive to businesses, especially when considering that they still need to manage existing practices. However, organizations can start by investing in supply chain assessments to identify the areas which have the most room for improvement and to identify an optimal strategy for execution.
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