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Can your supply chain avoid extinction?

Dynamic segmentation will ensure future competitiveness.

OVERVIEW

In today’s hyper-competitive markets, slicing and dicing the supply chain to service ever more diverse and demanding customers has become the core challenge for Chief Supply Chain Officers.

Unfortunately, traditional supply chain operating models are not fit for this purpose. And simply expanding the number of supply chain configurations and maintaining separate organizations to manage them—the approach being followed by most organizations—is driving too much complexity.

It is time to move to a new supply chain operating model, one that equips the supply chain to provide truly differentiated service. Digital technologies are the key; they enable supply chain segmentation that is truly granular, highly dynamic and can be rigorously executed.

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KEY FINDINGS

Differentiated supply chains are a “must have.” Indeed, continuing with business as usual could put your supply chain—and eventually your company—on the path to extinction.

  • Traditional supply chain operating models are inflexible and slow—and most organizations know it. Eighty-nine percent of supply chain executives report that customers see their current operating models as too complex, and for half of them, “decision-making speed” and flexibility to respond” are key sources of that complexity.

  • Dynamic and truly granular segmentation powered by digital technologies is the name of the game. Ninety-seven percent of supply chain executives are planning to move toward more granular segments.

  • Control does not require ownership. An execution ecosystem, comprising a mix of in-house and outsourced solutions, can boost both transparency and performance. Eighty-five percent of supply chain executives report already considering outsourcing portions of their supply chain. “Logistics and distribution” (52 percent) and “supply chain analytics” (49 percent) are the areas considered most.

    •
98% of companies report segmentation is relevant to the redesign of their supply chain operating model.

of companies report
segmentation is relevant to the
redesign of their supply chain
operating model.

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RECOMMENDATIONS

You can move toward a truly differentiated supply chain by focusing on 3 key areas: 

  1. Supply chain configurations that drive value
    Your customers will be best served by defining a limited set of supply chain configurations, while controlling cost and continually updating.

  1. The right digital technologies for each configuration
    Apply only those capabilities by segment that enable you to deliver the right supply chain response.

  1. The right structure and governance
    Be highly segmented on the inside, but simple on the outside. Embed innovation thinking at the heart of your organization.

WHO WE ARE

Frank works with clients in the consumer products industry across the world to help them improve their supply chain operations. He drives Accenture Strategy thinking on supply chain operating models, and he applies his expertise on digital solutions, segmentation models and innovation to establish a competitive supply chain. Frank is based in Amsterdam

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Markus works with major Life Sciences companies around the globe to shape and transform their supply chain and manufacturing operating models, optimize their operations and to exploit digital opportunities. He leads Accenture's Global Life Sciences Operations practice and drives the thinking around differentiated supply chains and digital operations for the Pharma and Medtech industries. Markus is based in Munich.

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Stijn-Pieter focuses on helping CPG clients develop the supply chain strategies, operating models and digital capabilities they need to respond to changing customer and consumer demands and become more customer centric. He specializes in end-to-end supply chain transformation programs, leveraging digital, innovation and segmentation. He also leads Accenture's Dutch Supply Chain Strategy practice. Stijn-Pieter is based in Amsterdam.

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FROM COST FOCUS TO TRUE VALUE CREATION

The 13th edition of the Global Sourcing Reference by Kurt Salmon, part of Accenture Strategy, analyzes current trends and developments in textile and clothing sourcing across more than 40 of the most important sourcing markets worldwide. In addition to addressing macro-economic trends and their influence on sourcing strategies, the study also looks at established sourcing markets and evaluates the potential of new, aspiring regions including their opportunities and risks. The report includes detailed expert interviews and comprehensive surveys with former decision makers in textile sourcing.

For a copy of the full report, contact globalsourcing@kurt-salmon.com.


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