Insight

Rattling the supply chain

Lose the legacy, move to the modern

Rob Barrett

Rob Barrett

Principal, Advisory/Supply Chain Leader, KPMG US

+1 480-459-3535

Christopher Alagna

Christopher Alagna

Principal, Advisory, Platforms, KPMG US

+1 312-665-3984

If the pandemic has taught us anything, it’s that the old ways of managing supply chains are no match for the challenges of the modern world. The supply chain chaos brought about by COVID-19 quickly overwhelmed global commerce and we’re still dealing with the consequences. What happened?

At the base of the global production pyramid, laborers became too sick to sow, harvest, and mine. With ships quarantined at sea, factories couldn’t get the raw materials they needed to produce their goods. And factories themselves, caught between supply problems, staff shortages and government mandates, tried their best to stay afloat. Chief Supply Chain Officers worked the phones, the computers, and everything else trying to get goods, often to no avail.

“Just in time” delivery, a mantra for much of the previous decade, was rendered suddenly ridiculous by the pandemic. Likewise, companies that had eschewed the dangers of “stock mountains” and kept inventory light found themselves out of product and at the end of a long line waiting for more. As consumers avoided the brick-and-mortar environment and elected to shop from home, affected businesses tried to move to a “store to fulfill” delivery model. Results were mixed.

Chained to the past

The fact that so few organizations were able to cope successfully with the supply chain challenges brought about by COVID-19 underscored the need for a better, more comprehensive, and more agile supply chain management system. Many of the systems still in use are rooted in yesterday’s technology.

Legacy systems often leave teams disconnected from one another. They don’t always give accurate pictures of the cost to serve. They may not upgrade easily—or at all—because they’ve been customized so extensively.

In what may be their greatest competitive disadvantage, legacy systems rarely integrate with modern solutions that leverage AI and analytics to offer insight into customer trends. Equally important, they lack the agility to respond to events in real time.

When these drawbacks are coupled with this unique moment of disruption—accelerated by COVID-19 and the sudden changes in the world’s way of life—it’s clear that many enterprises have an unprecedented opportunity to move quickly to a modern, future-ready state.

Lose the legacy, move to the modern

A future-ready state, as the name implies, connects your finance, operations, and procurement teams to create a modern, integrated supply chain solution.

KPMG Powered Enterprise | Supply Chain, enabled by Microsoft Dynamics 365, is a pre-configured solution that integrates warehousing, purchasing, manufacturing and distribution. It’s designed to provide you with better processes and built-in, leading-edge interoperability. Using a suite of tools to automate and streamline your supply chain, it offers predictive insights, improves decision making, and builds customer relationships.

These tools are important because, by linking every supply and demand process with your financials, they show you what’s happening, where it’s happening, and what the associated costs are. This transparency gives you the ability to navigate with confidence even in volatile and uncertain times.

How does it work?

The modern supply chain relies upon the seamless integration of core business functions as well as streamlined, reliable, compliant technology. That’s the basis of the KPMG Powered Supply Chain enabled by Microsoft.

At its center is the KPMG Target Operating Model, shaping your business transformation and mapping your future operational efficiency. It provides a deep understanding of the trends shaping the future and uses thousands of data points to define what your ideal, future-ready state should look like. The model serves as a standard in every area of the supply function. It’s the start of your transformation.KPMG Powered Supply Chain overcomes the usual shortcomings of a cloud transformation project because it’s dynamic and evolvable—what’s built today can be a solid foundation for what you may need tomorrow. It’s your opportunity to create a flexible, thriving supply chain, one ready to handle even turbulent times.

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