Clearly, I have to say that companies are facing inescapable pressure on their supply chains in today’s complex business conditions. This situation creates low productivity, poor quality, poor customer loyalty, poor growth, poor profitability and higher costs for many companies.
Most innovative companies and nations are increasingly focusing to the supply chain to create more competitive advantages against local and global competitors.
When I was working in the Agri-food industry, we have decided to establish a controlled agricultural production system to supply the fruits, vegetables and others for baby food industry. This was the farm to fork program with full traceability according to the European baby food legislation. We supplied 100% of the materials (except tropic fruits) from Turkey in one year. It was the first in Turkey. It was a great teamwork. We saved a lot of money by supplying materials from Turkey without any failure. This is the best example of the value chain innovation and effective risk management. Therefore, I have to say that the management of the Agri-food supply chain is very distinctive due to the food perish ability and requirements of food safety, organoleptic quality and other factors.
I know that companies should develop and implement a collective vision and operational response to the rapid changes impacting their growth and profitability in the long-term. They have to focus on continuous innovation management and creating more transient competitive advantages, supply chain optimization, consumer wellbeing and engagement with technology-enabled customers. This is crucial for aligning the operational performance to their business goals.
I believe that companies should develop and implement a competitive strategy that should be based on how the customer prioritizes product cost, delivery time, variety and quality. So that they can delight customers (internal and external, business and consumer), controls their operational costs and support growth, expansion into new markets and competitive innovation activities.
It is clear that an excellent supply chain should be designed and operated to ensure alignment between effective supply chain business practices and the competitive strategy of the company. Therefore, company leadership should define the business strategy, operating model, operational performance objectives and talent management process in a competitive way.
What are the competitive strategy elements and supporting model characteristics of excellent supply chain?
- Lowest prices – Lowest operating cost for being competitive in prices.
- Highest margin products – Maximum availability at sales points.
- Highest quality – Working with the highest quality of suppliers and applying strict quality control at the manufacturing site.
- Fastest customer response - Shortest order-to-delivery cycle and fastest request-to-promise date.
- Most innovative – Most efficient new product development and launch.
- Highest return-on-assets – Highest plant utilization and lowest inventories.
- Broadest product line – Adept at managing complexity.
- Best customer service – Specific service for each customer segment and maximum availability at point of sale.
- Best post-sale support – Maximum availability of service parts.
- Most environmentally responsible – Minimize waste and maximize recycling.
- Customer response: Company should develop and implement measures such as order cycle time, perfect order fill rates, product quality, and new product time to market.
- Efficiency: They have to assess supply chain capability for converting inputs into outputs. I believe that companies should focus on labor productivity, labor content, cost of supply chain, and waste to improve their costs and competitive power against peers.
- Asset utilization: Company should focus on how effectively facilities and inventories are being used.
According to my experience and know-how, supply chain agility is a crucial factor in excellent supply chain management. The leadership of SCM should aim to increase the speed and response of the chain due to the needs of the customer in a productive way. Therefore, the capability of the firm defines the level of the speed and responsiveness in the supply chain. Of course, people knowledge and skills, demand management capability, sourcing and manufacturing flexibility, adaptive capability and continuity are important factors of supply chain agility. All are subjected to the dynamic requirements of the customer.
I believe that company leaders should take following measures to create excellence in their supply chain;
- Work with the right people who have excellent experience, knowledge and skills (includes EQ). Hire right skills to the right job. Create competent workforce.
- Reconfigure HR organization. I see that some organizations have problems to manage talents and right skills due to their poor HR management capability and skills.
- Develop leadership skills to transform supply chain to new levels of excellence by training, developing, motivating and mobilizing internal and external teams.
- Create excellence in communication and collaboration between company, suppliers and customers. Be transparent. Create value and increase customer happiness.
- Create excellence in applying the regulations and communicating with the authorities.
- Develop and implement a supply chain competitive strategy that includes agility, responsiveness, asset management and reliability to have a competitive cost for the short and long-term through reconfiguring the business, organization, technology, information and application.
- Develop and implement a well designed demand planning system and regularly improve it.
- Improve quality continuously and systematically. Competitive intelligence and benchmarking are the best way to evaluate the supply chain performance. Reduce errors and increase the speed of the products and cash through each stage.
- Regularly measure people’s performance of the supply chain organization and remove the toxic people from the operating units. Otherwise, they will create a negative culture and it will damage the company in the long-term.
- Speak the same language and establish great synergies across the trading network in your supply chain.
- Provide “line of sight” to increase customer satisfaction.
- Prepare and enter to the emerging markets.
- Adapt your business to emerging technologies in today’s digital age and use robotics to increase productivity and decrease the cost.
- Develop and implement a competitive supply chain innovation management strategy that should be linked to the company’s marketing and innovation management strategy through regarding the political situation that distrups the supply chain.
- Work with the great leaders who have excellence in strategic focus on cost, time and quality in terms of management of people, process and product by performing alignment with the business strategy and making right decisions in a competitive manner.
- Develop and implement risk management and knowledge management. These are essential parts of the effective supply chain management and logistic organization.
- Enhance a monitoring system to analyse the current state of supply chain and forecasting its perspectives.
- Enhance an effective planning and regularly reconfigure it.
- Develop infrastructure.
- Develop and launch new transient competitive advantages continuously. We have to keep in mind that every product has a life cycle. These are launch phase, growth phase, maturity phase and market decline phase.
- Focus on to build collaborative supply chain pilots in sharing information, collaborative warehousing and collaborative transport.
- If the company owners and leaders perform all of these activities in an excellent way through working with the great leaders and right staff; their business will meet customer expectations for timely, high-quality supply chain with zero errors, competitive and profitable operations.
- Don’t forget that excellent supply chain is like a symphony orchestra! It needs a great conductor to manage for playing the Mozart’s symphony no;41 “Jupiter”. The success of a business has become increasingly dependent on the ability and skills of its leader and people. We are in a period of “The War for Talent”!
Please write your comments!
Thank you very much!
Yusuf Tokdemir is a business advisor, entrepreneur, innovation consultant, growth strategist, keynote speaker, founder of Chocolat Garden Chocolatier and Innovation Turkey.
He has a proven track record of success in multi-industry.
Innovation Turkey is an Innovation Management Consulting and People Development Company. It collaborates with the companies for people and leadership development, new product design, new service design, new business design and organizes seminars and workshops on innovation management and productivity to achieve competitive commercial outcomes. If you want to solve your issues please call me!
Chocolat Garden is an artisan chocolatier that produces highest quality handcrafted fresh chocolates from 76% Ecuador extra fine dark chocolate for chocolate lovers. We deliver your orders in 3 days.
Innovation Turkey olarak şirketleri acil ihtiyacı olan verimlilik, büyüme, karlılık, yeni ürün geliştirme, yeni iş geliştirme, personel geliştirme, yönetici koçluğu vb alanlarda ihtiyaçlarına yönelik çözümler üretiyoruz. Ticari kazançlarını artırıyoruz. İlgili konularda seminer ve workshop düzenliyoruz. Şirketinizin ihtiyaçları konusunda lütfen arayınız!
Chocolat Garden prestijli, premium, nefis, el yapımı, taze, günlük çikolata üretmektedir. %76 Ekvator ekstra fine Ekvator bitter çikolata ve en kaliteli doğal hammaddeleri kullanmaktadır. Ürünlerde koruyucu vb yoktur. 3 gün önceden alınan siparişler güvenle adrese teslim edilir.