Supply Chain Management Strategy
SCM-Strategie – Ein zentraler Enabler zur Erreichung der Unternehmensziele
Supply Chain Management (SCM) has established itself across industries as a key success factor and is now critical to the competitiveness of modern companies operating in an increasingly globalized and dynamic market environment. Accordingly, the development of a suitable SCM strategy plays a pivotal role in implementing the corporate strategy and achieving core objectives related to cost, time, and quality.
The SCM strategy must be consistently derived from the overall corporate strategy and designed to ensure that company resources are deployed efficiently, purposefully, and with minimal waste. At the same time, it should ensure that supply chains are set up to be flexible, transparent, and agile, while being aligned with market demands.
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The scope of an SCM strategy is broad: it includes, among other things, the design of an optimal production and distribution network, the production concept and degree of vertical integration, the form of collaboration with suppliers, the selection of suitable SCM concepts, the use of IT systems, and the desired level of digitalization. It provides the framework for all supply chain planning and execution processes.
Depending on the company and industry, numerous strategic questions need to be clarified in advance, such as:
- How many production sites are required, and where should they be located?
- How should the distribution structure be designed, and where should the warehouses be situated? Which products should be stored at which locations?
- Where should the decoupling point in production be set – in other words, which manufacturing steps should be carried out independently of customer orders, and which only in response to specific customer demand?
- Which tasks should be performed in-house and which should be outsourced to external service providers?
- How can a supply and logistics-friendly supply chain be established from suppliers to the respective plants and sustainably optimised?
- What measures are necessary to minimise or eliminate supply risks?
It is also necessary to assess whether a single, company-wide supply chain concept is sufficient for all products and market segments, or whether differentiated approaches are required for different customer groups.
Like any strategy, the SCM strategy is not a static construct, but is subject to market dynamics. It must therefore be reviewed regularly and adapted as needed to changing conditions.
Our consulting focus areas in the development of an SCM strategy:
- Development of company-specific SCM strategies
- Design of optimal SCM organisational structures at both local and global levels, and their integration with logistics, production and procurement
- Design and optimisation of production and distribution networks (local and global footprint)
- Definition of value creation strategies within the production network
- Determination of suitable production and configuration strategies for specific product groups (Build-to-Order, Assemble-to-Order, Pack-to-Order, etc.)
- Development of postponement strategies
- Definition of appropriate strategies for production and assembly planning (e.g. capacity allocation and planning, synchronisation of pre-assembly and final assembly, introduction of flexible working time models)
- Development and implementation of integrated concepts for demand and replenishment planning (S&OP, SIOP)
- Definition of suitable procurement strategies for different material groups (Single Sourcing, Multi Sourcing, Local Sourcing, Global Sourcing)
- Execution of make-or-buy analyses for logistics, production and assembly services
- Determination of technology usage and degree of digitalisation (e.g. ERP, WMS, AI-supported systems, Big Data)
- Strategy evaluation for the continuous development of SCM alignment
- Shared logistics services through a central SCM organisation within the company
- Development of appropriate KPI systems for measuring and evaluating supply chain activities (e.g. SCM Balanced Scorecard)
Approach to developing a Supply Chain Management strategy
When developing a supply chain strategy, companies encounter many challenges. As a supply chain management consultancy, we support you with our experience and best practices to identify and overcome these challenges at an early stage.
Our Approach:
1. Assessment of your current supply chain
Before you begin developing a new SCM strategy, it is essential to conduct a thorough assessment of your existing supply chain. This includes a critical review of current processes (planning, control, material flow), identification of bottlenecks, and analysis of performance indicators. Key performance indicators (KPIs) such as delivery service / OTIF, lead times, and inventory turnover can provide valuable insights into areas requiring improvement.
2. Identification of goals and objectives
After assessing your current supply chain and supply chain management situation, the next step is to set clear goals for your SCM strategy. These should be aligned with your overall business objectives and might include, for example, the following points:
- Reducing lead times by a specific percentage
- Achieving a certain level of inventory turnover
- Increasing customer satisfaction through improved delivery service
- By setting measurable goals, you can track the success of your SCM strategy over time
3. Development of a company-specific SCM strategy
Starting from the corporate strategy and the defined objectives for Supply Chain Management (SCM) in terms of time, cost, and quality, the SCM strategy – including its key elements – must be defined. Depending on the industry and company orientation, these key elements typically include the design of the global production and distribution network (footprint), the decision between centralised and decentralised structures, the allocation of products to specific plants, the definition of the degree of vertical integration at production sites, the implementation of production decoupling strategies (postponement), overarching planning and control concepts, supply and replenishment strategies, make-or-buy decisions for components and services, the sustainability strategy, and the required SCM organisational structure.
These elements largely determine the level of agility, lean management, flexibility, and speed within the supply chain – and thus its contribution to achieving overall corporate objectives.
4. Implementation of your SCM Strategy
A clear understanding of the key elements of your future SCM strategy is essential. For successful implementation, a roadmap outlining the necessary steps to achieve your goals is required, including a timeline, responsibilities, and required resources. Be sure to include checkpoints to assess progress and make necessary adjustments. Involving various stakeholders within the company is also crucial for the success of a well-executed SCM strategy. The integration of supporting IT systems, such as ERP, APS, TMS, and Supply Chain Analytics, is usually indispensable and should be implemented according to your specific requirements.
Your benefits from an appropriate SCM strategy:
- Establishing a sustainable foundation for achieving corporate objectives
- Increased delivery capability and reliability
- Improved transparency for all stakeholders within the company and throughout the supply chain
- Optimised costs and greater efficiency along the entire supply chain
- Greater flexibility and responsiveness
- Enhanced risk management
- Creating sustainable competitive advantages in the market
Further consulting focus areas in supply chain management:
ebp-consulting is your partner in developing and optimizing a future-proof SCM strategy
In summary, a well-thought-out supply chain management strategy is crucial for the success of both medium-sized businesses and international corporations in today’s competitive environment. When companies understand the importance of this strategy, develop a clear plan, and implement it effectively, they can achieve significant improvements in efficiency, cost reduction, and customer satisfaction.
At ebp-consulting, we specialise in providing tailored consulting services in supply chain management to help businesses manage the complexities of SCM. Whether you are looking to develop a new strategy or refine an existing one, our expertise will support you in achieving your supply chain goals.
If you would like to learn more about supply chain management or engage our consulting services, please get in touch with us today.
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