Where to start.
Most of us inherit the supply chains we work within. Not so long ago, to review and redesign a complex supply network was considered a big task, only be considered every five years or so and be undertaken by teams from large consultancies.
As business and economic cycles became less obvious, affected by M&A activity, global procurement, commodity demand and supply volatility and increasing supply chain risks, the recommended review cycle has been reduced to every two years and preferably annually.
Improved analysis tools are available, helping supply chain redesign to be now done in smaller businesses. Annual reviews means that the process must be owned and undertaken by your own supply chain and logistics team. The upshot of this is that team members must be comfortable with numbers and a numerate analyst or two be employed, because patterns and trends must be identified and analysed.
Getting the relevant numbers should be a straightforward exercise with an in-house team, but experience shows that if you estimate a likely time duration, it is advisable that it be at least doubled. Time pressures on staff numbers means that time which can be allocated allocated to the task is small and the numbers will be hidden in a wide range of applications and files of which people are not aware.
What to do
The challenge with a project that will review all the nodes and links in your supply network is where to start. While the supply chain and logistics team should lead the review process, inputs and data from other parts of the organisation will be necessary, so a common methodology is required.
A methodology that enables all to work within a common template is the Supply Chain Operations Reference (SCOR) model. This methodology enables your team to describe every logistics process within your core supply chains and in less detail, the flows of your extended supply chains. As a process reference framework, no part of SCOR is organisation specific.
SCOR provides the methodology to structure and define your standard logistics processes; standard metrics and standard logistics practices derived from the processes and metrics. This enables the relationships between processes, metrics and practices to be defined, enabling the ‘as is’ business activity and the future ‘to be’state to be documented, derived and compared.
As SCOR is a methodology to describe a situation, you only need to identify and solve a defined supply chain and logistics challenge; so, in addition to major supply network reviews, SCOR can also be used in understanding more local challenges.