How to boost your product’s value with an end-to-end supply chain strategy


India’s supply chain and logistics market is one of the largest globally, valued at USD 215 billion and growing at a CAGR of 10.5%. The sector’s profile was raised dramatically during the pandemic as many businesses, from start-ups to long-established brands, adopted “direct-to-consumer” (D2C) models during the lockdowns, thereby adding even greater pressure on their supply chains to be reliable, agile and responsive.

What these enterprises quickly found, however, is that it is not enough to design a great product, you need to also execute a superior supply chain strategy. However, many companies lack sufficient knowledge of and experience in the operational side of the product journey. Even Elon Musk, a man who has revolutionized the field of rocket science, acknowledged in a 2016 interview: “this supply chain stuff is tricky.”

Tricky is, of course, an understatement. Throughout the end-to-end product lifecycle, organizations must rely on hundreds of trading partners for various parts and services. Not only are these enterprises most often geographically dispersed, but they have different levels of business experience, technological sophistication and capital. Consider risks like human error, economic volatility, natural disasters or the rare Black Swan event, and the complexity of modern supply chains becomes apparent.

The burgeoning need for streamlining supply chains

Many organizations underestimate the value of their supply chains since they don’t know what they don’t know about strategic supply chain management. One way to understand supply chain complexity is to think of it as an iceberg – there is a lot more to it than meets the eye.

Above the waterline, you have orders being placed, products pulled from shelves, packed and shipped to a production facility. But below the surface are the innumerable logical, physical, digital and financial elements that must be addressed to ensure the optimal flow of product, data and capital. When these elements are not expertly managed and coordinated, the risk of disruption, and your total cost of ownership, will increase exponentially.

Leveraging third-party logistics and supply chain functions for greater success

Third-party companies offer an array of useful enabling technologies, platforms, consulting services, and more that address various elements of the supply chain process, from BOM assessment and planning to forecasting, risk mapping and logistics services. But, how do you choose the right ones? Here are some considerations:

  • Your supply chain extends throughout the end-to-end lifecycle of your product, so you need a partner who has a deep understanding of market dynamics that influence supply and demand and expertise that runs from the earliest stages of new product ideation all the way through end of life.
  •  As digital technologies like IoT, cloud, and AI permeate corporate IT and OT, fluency and expertise in implementing intelligent automation technologies like robotic process automation and process mining are a must-have.
  • Component suppliers are often well-versed with technology innovation and new product development, and not supply chain. So, while you may enjoy preferential pricing buying directly from a component manufacturer, your “total cost” calculation should include possible added expense from expedites, payment term penalties, missed production windows and other fulfilment disruptions.
  • Supply chain management is a team sport. You need a partner who can help break down strategic and technological barriers between external trading partners and internal silos among critical stakeholders like your engineering and sourcing teams. Better collaboration can ensure component choices will satisfy critical brand objectives around time to market, user experience, and factors like environmental sustainability, ethical sourcing and recyclability.
  •  Your partner should act as an extension of your organization, facilitating the flow of products and information between your organization and your various trading partners.
  • There is no one-size-fits-all supply chain model. Look for a partner that will take the time to understand your specific challenges and priorities and has the range of capabilities required to build a model that best meets your needs.

Trust: the foundation of supply chain excellence

Finally, you need a partner you can trust. The ongoing shortage of key technologies in the high-tech sector has generated a lot of buzz around shifting from “just-in-time” to “just-in-case” inventory strategies. Trusted global distributors will be capable of buffering inventory for its customers. Still, inventory for inventory’s sake can tie up capital resources and add potential obsolescence risk if buffer stock ultimately goes unused.

In addition, assurance of supply is just one element of an effective supply chain resilience plan. Agility and visibility are also critical. Front-running companies work closely with customers and suppliers to facilitate a more open exchange of capabilities and requirements, ensuring resources are best aligned to achieve our common goal of meeting market demand on time and at the right price.

With techniques like scenario planning, value at risk calculations, deep tier supply chain mapping and alternate source identification, such companies can help their supply chain partners quickly and cost-effectively outmaneuver disruptions that threaten their business continuity.

In a world where the commoditization of technologies makes it increasingly difficult for companies to stand apart from the competition, supply chain and operations have become the new frontier for differentiation. Today, sustainable growth and profitability result from delivering a differentiated, value-rich customer experience throughout the product lifecycle. This requires both leading-edge technical and best-in-class supply chain execution.

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Disclaimer

Views expressed above are the author’s own.



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