The last two years have reminded us how critically important supply chains are to a business – and how uniquely vulnerable they can be to disruption.
That’s why so many companies are now looking to take a fresh, objective look at their own supply chain organization and operations. They want to evaluate their supply chain capabilities and supporting technology and get a full understanding of their strengths and weaknesses. For some companies, they recognize it may be time for a new strategy that makes their supply chain more resilient and better able to meet the demands of today’s marketplace.
KPMG has been working closely with clients during this extraordinary time and has developed a thorough approach to supply chain assessment and strategy development. Typically, we help evaluate the maturity of a company’s supply chain capabilities and design a prioritized set of supply chain IT initiatives. In working with clients, we’ve learned that it’s critically important to evaluate current in-flight projects, to conduct an unbiased assessment of current supply chain capabilities, and to ensure we have full support from supply chain leadership.
Our approach has four phases: mobilize, assess, rationalize, and prioritize.
Launch the assessment by identifying the key stakeholders, defining the scope, and gathering relevant data.
This is the kickoff phase of the assessment. At this stage, we identify key stakeholders who should participate in upcoming “voice of the customer” and “voice of IT” interviews.
We also define the scope of the supply chain function and the boundaries that will be included in the strategy. It's important to clearly define the scope of the function now because that information will be needed for organizational design decisions to be made later in the strategy-development process. It’s also important to gather data that will be needed later, such as supply chain KPIs used for benchmarking against industry or key competitors, current IT roadmaps and approved in-flight initiatives, and current-state IT architectures.
Determine the maturity of your supply chain capabilities.
Once you have launched your assessment process, the next step is to assess the maturity of your current supply chain capabilities. That should be done through interviews and surveys of your key stakeholders. Your interviews should cover and help you fully understand the following:
- Current supply chain capabilities and future roadmaps.
- Current maturity of the supply chain capabilities.
- The performance strengths and weaknesses of those capabilities.
- The current technology landscape and any future plans and roadmaps.
- IT support provided, including the frequency of your interactions with your IT support team and how the IT support program is reviewed, evaluated, and funded.
In addition, we recommend that you survey your stakeholders, collecting data that can be combined with the more subjective observations you gather from the interviews. Also, consider conducting a benchmark KPI analysis against your competitors or industry peers.
Determine the gaps between your current capabilities and the leading practices, and plan for closing those gaps.
The next step is to assess the maturity of your supply chain capabilities against leading practices. The assessment should define a measurement scale for supply chain capabilities. Then, it should assess the maturity of key supply chain capabilities to understand how this maturity will impact your supply chain IT strategy and roadmap.
In conducting this assessment, your goals are to:
- Identify the baseline maturity of your high-priority supply chain capabilities.
- Understand how this baseline informs the future state IT roadmap.
- Identify gaps between the organizational perspective on supply chain maturity and the technical capabilities that exist.
- Identify what is needed to close the gaps.
The maturity assessment, coupled with the VOC and VoIT analyses, provides a baseline understanding of the maturity of your key capabilities and identifies gaps between perceived and actual maturity.
Create a prioritized set of initiatives and a roadmap for implementation.
Once the rationalization stage is complete, your next step is to prioritize and group the supply chain capabilities you need into initiatives, establish IT strategy guiding principles, and develop a roadmap of programs to implement. The aim is a supply chain strategy that enables flexibility and control, drives responsiveness through partner collaboration, enhances the customer experience, and modernizes applications. It may be a challenge to get everyone to agree on every detail, but getting to consensus is essential for moving the process forward and allocating funding.
Once you have prioritized your initiatives, your next step is to develop a roadmap with time-based milestones. The roadmap provides a north star for supply chain operations and IT, creates a strategic relationship between supply chain operations and their IT partners, and helps ensure all projects are aligned to produce business value.
Finally, you need a governance process for the strategy and roadmap you have developed. This helps ensure all activities are aligned and key decisions are made in an orderly way. The governance process should include a periodic review to ensure you are aligned with business priorities, leading supply chain practices, and emerging technologies. It should also allow space – and funding – for innovation. It’s important to create opportunities for some calculated risk and experimentation that could produce a faster than expected business outcome.
If you have questions about the long-term strength and resilience of your supply chain, consider an objective assessment of your capabilities and supporting IT. Like many companies, you might find there are opportunities for significant and perhaps transformational improvement.