Getting started with supply chain network design: Talent, strategy, and the role of leadership

Recent months have already produced a decade’s worth of disruption in global supply chains. Like a stone thrown in the middle of a world trade lake, the circles went far beyond the U.S. market and affected every link in the global supply chain. And there’s no sign of this uncertainty ending anytime soon.

The need to quickly adapt supply chain strategy (find new vendors, shippers, reshore assembly lines and manufacturing plants) has boosted the need for supply chain network design. As a practitioner with many peer connections in various industries and in consultancies, I face no shortage of thoughts about the current situation. While there is an ongoing fear of recession and executives are mostly uncertain about the future, everyone I talk to is taking on new projects and expanding their teams. 

So where should a company start when it comes to network design?

Step one: A paradigm shift

Contrary to popular opinion, it does not start with hiring a consultant or buying software. Supply chain network design begins with a paradigm shift. Moving away from “we’ve always done it this way, so it must be right” is the first step. Supply chain challenges, for all their disruption, are at least making this shift easier to justify.

Step two: Building the right team

Within the network design practitioner community there is a common debate on the most effective way to become one. My experience shows that the overwhelming majority of successful network design practitioners come from a supply chain planning and/or analytical background and acquire the necessary tech skills on the job, not the other way around. Understanding how business really works is the foundation of network design.

What should the reporting structure be? Large companies typically end up with a centralized supply chain modeling team, reporting into the planning or strategy department. Such a team should be able to look at the task holistically, rather than breaking it down into separate parts. This includes shifting from analyzing each individual warehouse, factory, or product line to looking at the entire supply chain, because a decision that seems correct and even obvious for a single facility can have an extremely negative impact on the entire supply chain.

The size of the team is of secondary importance, especially in the initial stages. Even in large corporations, scenario planning can be carried out by one or two people.

Step three: Leadership commitment

The characteristic that distinguishes successful teams is not a high headcount, but a direct line to the experienced leadership team. Their role is to provide detailed guidance to make sure the modeling efforts are focused and allocate additional resources for complex tasks, especially in the field of data engineering.

The bottom line

Getting started with network design requires three ingredients:

• A paradigm shift away from “business as usual.”
• At least one experienced, high-performing analyst or planner.
• Leadership willing to guide and invest in the effort.

With those in place, companies can turn any disruption into an opportunity to build supply chains that are not only resilient, but strategically advantaged.

About the author

Marianna Vydrevich is the manager of operations research & network optimization at GAF, North America’s largest roofing manufacturer. Marianna is a seasoned supply chain expert with over a decade of global experience, specializing in supply chain network design.

SC
MR