Customer-centric supply chains by design

This is an excerpt of the original article. It was written for the September-October 2023 edition of Supply Chain Management Review. The full article is available to current subscribers.

September-October 2023

Best of the best. Best in class. The elite. Whatever terminology you use to describe the top performers in industry, they all have one thing in common: Companies try to emulate them. That is not easy, of course, but honors such as the annual Gartner Supply Chain Top 25 provide a roadmap for firms hoping to reach the upper echelon. As we do each year here at Supply Chain Management Review, our September/October issue dedicates significant real estate to the Gartner Supply Chain Top 25. Why do we do this? Because our mission is to help inform you, the supply chain practitioner, in all the best ways to make your own supply chains more efficient and…

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Long-established methods for designing supply chains are becoming obsolete. As a result, companies need fresh approaches to keep pace with ever-changing markets and harness new technology’s benefits.

Such methods are available, but companies must adopt them and align their supply chain design practices with today’s business demands. In this article, we describe four ways to achieve these goals.

Change on multiple fronts

As the COVID-19 pandemic underlined, the ability to respond speedily to market shifts and increasingly demanding customers has become a competitive necessity. This is especially true today, as companies adjust their supply chains in light of the lessons learned during the pandemic.

Accepted practice is to review supply chain design periodically or in support of a significant business change such as an acquisition. However, given the rate at which market conditions change, more than occasional reviews are needed. Companies must revisit how their supply chains are designed much more frequently.

They must also incorporate a broader range of factors in these reviews to reflect the complexity of modern-day markets. The business landscape is riskier and more volatile than was the case several decades ago when traditional supply chain design methods were developed. New ways of doing business, such as e-commerce, bring novel challenges. Moreover, supply chain disruptions can affect entire global systems in today’s interconnected world.

Tech-driven changes in artificial intelligence and machine learning, advances in technologies such as data visualization, and the availability of big data are redefining the role of supply chain design.

The new toolbox

The good news is that new supply chain design modeling methods and tools geared to today’s competitive environment are accessible to most companies. Here are four ways to take advantage of them.

Extend the scope of design efforts. Traditionally, companies’ supply chain design efforts have focused on cost minimization and the physical structure of supply chains. While these considerations remain essential, long-term value creation and the impact of supply chain choices on market share have become top priorities. As a result, designing for customer-centricity in supply chains is now critically important.

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