In the media

Your shock-proof supply chain must look very different in 7-10 years

Supply Chain Management Review

11 August 2020

What supply chains will we need in 2030? If we had to design them from scratch for the products and services we’ll be delivering then, what would they look like? Will they include our customers?

Big hairy questions indeed—the kind supply chain leaders must start considering today.

In my prior articles, I talked about preparing for disruptions beyond COVID-19 and described how risk management discipline can shock-proof supply chains in the next 3-4 years. Now let’s look 7-10 years out. Every company’s transformation will be different, of course. But I see two big themes that supply chain leaders must focus on as they think long-term.

Ecosystem resilience. This theme will emerge naturally when your organization has mastered shock-proofing capabilities internally. It will then be necessary to extend shock-proofing to your suppliers (and their suppliers), your supply chain finance partners, and others. Think of it as your company’s cross-functional approach amplified externally across your supply ecosystem, helping to create a more resilient supply chain far into the future.

Supply chain redesign. This is a really challenging theme, calling for deep strategic thinking and concerted collaboration across the C-suite. It gets to the heart of cosmic questions about demand and supply. Will we be serving the same kinds of customers in 2030? If yes, will we be providing more services and fewer products? If so, what will drive value in services? And as we deploy the next generation of demand-sensing tools, aren’t customers then part of an active end-to-end value chain?

Those questions lead to a ton of supply-side questions. Can we balance resilience and customer needs better with on-demand, localized production models—leveraging advances in 3D printing, for example? Can we stay resilient if we source fewer custom-designed parts and subassemblies, using more readily available hardware, and then add value with software? And perhaps most importantly: who’ll pay for the new design?

There’s no room here to explore every possible permutation of supply chain redesign. Suffice it to say that significant redesign will be essential as customers’ expectations keep escalating, competition intensifies, climate change looms larger, and as the proliferation of advanced analytical tools, sensor technologies, and additive manufacturing techniques enable rapid change.

So, who’ll be the first to redesign the value chains of 2030, convening their colleagues from R&D, finance, manufacturing, and marketing to do so? Those supply chain leaders will be setting up their companies for enduring success. They won’t just be building deeply resilient supply networks. They’ll be nearing the Holy Grail of the “customer of one” with highly integrated, digitally driven systems that personalize products and services more effectively than ever. They will be creating cost-effective delivery systems that maximize the use of automation.

Crucially, too, they will be helping reduce their planetary footprints. Think of localized 3D printing set-ups that shrink the need to ship stuff. Imagine design teams whose agile sprints focus on environmentally sensitive sourcing as much as landed cost, and whose products are designed to be recycled at end of life.

Shanton Wilcox is the U.S. manufacturing lead at PA Consulting.

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