Recognizing a Resilient Supply Chain
The ways that supply chains can go wrong have been multiplying. From ships stuck sideways in the Suez Canal to low water levels in the Panama Canal, from pandemics to tariff wars, a company’s supply chain is more and more vulnerable to forces beyond its control. While control may not be achievable, fast recovery definitely is.
When a supply chain is resilient, it recovers quickly because it:
- Provides the data you need to make decisions in a timely manner and in a way that makes sense.
- Provides data you trust.
- Delivers accurate forecasts of supply and demand.
- Provides a way to test “what if” scenarios ahead of time.
- Has procurement, operations, logistics, sales, and finance working toward solutions, not pointing fingers.
- Gives you more working capital.
- Makes it through a merger or sale with the right people in the right place performing efficiently.
- Allows you to negotiate with suppliers without driving either one of you into financial difficulty.
- Has a playbook for evaluating suppliers and technologies before you commit.
- Keeps the company compliant with regulations.
- Has employees ready to step in when new skills are needed and take accountability.
The Importance of Total Value Optimization (TVO)TM
The Total Value Optimization™ self-assessment tool points you to areas across your plan-buy-make-move supply chain where your company might find itself in trouble. The Total Value Optimization approach drives measurable improvement in EBITDA, cash, resilience, and growth by examining every person, role, function, process, and system in your company for opportunities.
Approaches to Improving Supply Chains
Anyone who specializes in supply chain improvements understands the need to talk to the C-suite to find out their concerns. But most companies would unearth more value creation opportunities if the initial assessment itself ranges from the C-suite to the warehouse floor. That willingness to dive deep has three benefits:
- It uncovers immediate sources of savings through efficiency, network re-design, footprint optimization, asset and fleet optimization, and operations excellence—often enough to identify savings of a million dollars or more before the actual engagement begins.
- It bring everyone onboard early in the process; as a result, when changes happen, they stick. Your people see the benefits from their perspective, and they take ownership.
- Changes are specific to your industry, organization, marketplace, and needs, rather than generic one-size-fits-all recommendations that you must implement yourself using tools, processes, and systems that may or may not be appropriate or fully understood.
Companies looking for those benefits need a supply chain consulting company with a variety of expertise, encompassing procurement, operations, logistics, finance, mergers and acquisitions (M&A), post-merger integration, advanced data analytics, design for excellence (DfX), leadership and organizational improvement, and sales, inventory, and operations planning (SIOP).
Case Study: Dive Deep Approach in Action
A PE company acquired a specialty chemical company with potential but severe performance issues, including steady erosion in EBITDA. They needed improvements in procurement, operations, and logistics as well as increased savings. Part of the problem was a legacy C-suite team, resistant to change.
When SGS Maine Pointe’s supply chain consultants were brought in, they established KPIs and metrics aligned to the goal of remediating problems and designed a report that showed how value creation initiatives translated into increased EBITDA. Faced with trustworthy numbers, the legacy C-suite conceded the value of change.
Supplier optionality increased the agility of the supply chain and lowered costs; coaching of middle management brought stability during a stressful situation; and data-based decision making replaced intuition. By instituting a maintenance schedule, showing operators how to use new productivity tools, and increasing safety, the consultants modernized operations and drove increased productivity.
Those results continued to bring value in great part because everyone received the information, tools, and guidance they needed at every level of the organization. The TVO maturity increased uniformly across procurement, operations, and logistics, ensuring that everyone fulfilled their owner, responsible, consult, or inform (ORCI) role.
About SGS Maine Pointe
SGS Maine Pointe is a global supply chain and operations consulting firm that drives compelling economic returns for companies. Our Total Value Optimization (TVO)™ strategy improves EBITDA, cash, growth and resilience across planning, procurement, logistics, operations and data analytics. Working with executives and their teams, we break through functional silos and rapidly transform the plan-buy-make-move supply chain, with an average ROI of 6:1. Our unique 100% guarantee of engagement fees is based on annualized savings.