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Research Publication Date: 17 August 2011 ID Number:
G00216075
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Building a Resilient Supply Chain
Michael Burkett, Steven Steutermann, Noha Tohamy, Mickey North
Rizza, Simon F Jacobson, C. Dwight Klappich
This collection of research addresses the new realities of
today's supply network to help position supply chain executives for
success in 2011 and beyond. Use it to drive resiliency,
sustainability, agility and innovation in the supply chain to
achieve higher returns on assets and revenue growth.
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2011 Gartner, Inc. and/or its Affiliates. All Rights
Reserved.
ANALYSIS
In the face of recent economic turmoil, executives have looked
to their supply chain organizations to apply solid fundamentals to
guide them through the downturn, thereby enabling them to salvage
margins through efficiency and cost cutting. Leading companies went
even further by investing in capabilities that lay the foundation
for their next phase of growth. In these turbulent times, leading
companies need sustainable, resilient supply chains that can
support and drive profitability and industry leadership in the face
of growing complexity and risk. Transforming their traditional,
reactive supply chains into demand-driven value networks (DDVNs)
requires a supply chain strategy, transformation plan and enabling
technologies that will support customers in the volatile, growing
economic recovery. Supply chain executives and leaders can use the
following collection of research to move closer toward their goal
of supply chain excellence.
Supply Chain Strategy
Two characteristics that distinguish companies on the Gartner
Supply Chain Top 25 are an emphasis on supply chain strategy and a
mind-set that strives for continuous improvement. Gartner's survey
on supply chain organization and talent shows a 36% gap between
these leaders and the remaining respondents, where strategy and
change management are priorities. Aligning supply chain strategy
with business strategy is the shift organizations need to transform
a traditional, reactive supply chain into an agile, responsive
organization that supports profitable growth.
The following collection of research will help supply chain
officers and senior operations executives understand these tasks to
better achieve these goals. It will prepare their organizations for
the new fundamentals that will drive supply chain success. This
research will help practitioners manage uncertainty and complexity,
providing insight into best practices in value chain
transformation, segmentation, talent and demand-driven global
manufacturing operations.
"Supply Chain Strategy for Manufacturing Leaders: The Handbook
for Becoming Demand Driven" provides companies with an updated set
of cross-industry concepts, frameworks and strategies. Apply the
advice in this research to implement the principles and realize the
benefits of a DDVN.
"The Gartner Supply Chain Top 25 for 2011" identifies the
leaders in supply chain management (SCM). Adopt the best practices
in this research to achieve supply chain resilience, integrate the
value chain, and execute a vision to achieve sustainable SCM.
"Demand-Driven Value Networks: Supply Chain Capabilities Road
Map for Growth, Agility and Competitive Advantage" details the
specific capabilities of demand-driven excellence, provides key
enablers for each capability and links them to existing research.
Use this research to support the journey to higher levels of supply
chain maturity.
"The Four Imperatives of Value Chain Transformation" are: (1) a
burning platform; (2) a compelling vision; (3) a documented
business case; and (4) the capability to change. Follow the
guidelines in this research to address these imperatives to improve
the probability of success of a transformation road map.
"The Seven Steps of the Supply Chain Segmentation Journey"
presents findings from interviews with companies that have
segmented supply responses to various customer demands. Use the
seven steps and design frameworks in this research as guidance when
segmenting supply responses into a portfolio of supply chains.
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2011 Gartner, Inc. and/or its Affiliates. All Rights
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Supply Chain Planning
In our 2010 study on SCM, managing demand variability and
improving forecast accuracy topped the list of obstacles to
achieving supply chain goals. Leaders view supply chain planning as
a strategic differentiator that can help them better sense and
manage demand, and orchestrate a profitable supply chain response.
This pursuit of planning excellence spans process design, planning
organizations, developing best-fit talent and planning
technologies.
The following collection of research will help supply chain
planning executives understand these tasks and achieve these goals.
It will also help them understand the needs and challenges of
next-generation planning with best practices, insights and case
studies for demand planning, supply planning, and the required
alignment with commercial organizations across product life cycles.
In addition, the research will address sales and operations
planning (S&OP) challenges, and explain how organizations can
achieve advanced maturity stages of S&OP.
"Sales and Operations Planning Maturity: What Does It Take to
Get and Stay There?" highlights findings that companies in Stage 3
or Stage 4 of Gartner's four-stage S&OP maturity model go well
beyond the traditional S&OP methodologies found in Stage 2,
which are used to balance demand and supply. Follow the guidance in
this research to change the process and technology, but more
importantly, to address ownership, culture, core beliefs and even
the name of the process to mature S&OP and drive revenue.
"Next-Generation Supply Chain Predictive Analytics: A
Cornerstone to Demand-Driven Value Networks" explains how
predictive analytics enable DDVNs through segmentation, demand
sensing and shaping, and profitable demand response. Use this
research to help transform the SCM model that was based on
aggregate information, averages and generalized models into a
tailored response based on the unique characteristics of customers,
products or suppliers.
"Overcoming the Top Five Challenges Facing Supply Chain Planning
Organizations" provides best practice advice on how to determine
the optimal level of centralized leadership, how to find and
cultivate capable planning talent, and how to achieve ROI in
technology solutions. Apply the lessons learned in this research to
set the level of planners' internal and external collaboration, and
align the planning process with the needs of unique supply chain
segments.
"Top Practices When Modeling Supply Chain Networks" presents how
different companies are adopting a more focused and organized
approach to supply chain network modeling and optimization. Adopt
the practices discussed in this research to understand how to best
apply such an approach in a particular organization.
"Toolkit: How Mature Is Your Retail S&OP Process?" analyzes
how many organizations attempt to match consumer demand and supply
with disorganized, functional metrics, but lack the ability to make
conscious, profitable trade-off decisions, thereby thwarting
retailers' ability to improve their S&OP maturity. Use the
guidelines in this Toolkit to assess the organization's S&OP
maturity and understand the steps to improve it.
Sourcing and Procurement
Supplier management is more strategic than ever as companies
seek deeper relationships with their partners. In a recent Gartner
study, a closer collaborative relationship was the top and most
successful method organizations used to shorten new product time to
market, and to mitigate supplier failure. We expect suppliers to
become more ingrained in helping their customers deliver product
innovation. Supply risk will remain top of mind, highlighted by the
recent earthquake in Japan that shut down supply lines across the
high-tech and automotive value chains.
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2011 Gartner, Inc. and/or its Affiliates. All Rights
Reserved.
The following collection of research will help supply chain
sourcing and procurement executives execute these tasks and achieve
these goals. It will help them master the new sourcing realities
and complexities of today's global supply network. The research
will look at sustainable sourcing, identifying and managing service
providers, manufacturing outsourcing trends, predictive analytics
in supplier performance and risk management, sourcing's role in new
product introduction, and low-cost country sourcing strategies.
"Procurement Transformation Must Align With the C-Suite's
Expectations to Substantially Impact the Business" defines a
maturity continuum to assess the procurement organization's
capabilities. Consult this research to help develop and refine a
three- to five-year plan to increase the organization's
capabilities.
"Supply Chains Require Technology That Provides Multitier
Visibility" explains how multitier supply chain visibility (MTSCV)
can reduce risk and inventory, and improve delivery and the
relationships between buyers and suppliers. Use this research to
better understand MTSCV and how it can help resolve supply chain
problems quickly, and to know the right questions to ask a
technology provider when developing MTSCV.
"Nine Supply Chain Sustainability Trends for 2011" discusses
trends around operational, resource and energy efficiency; changes
in climate legislation; environmental and social accountability;
recycling, waste and resource management; clean technology and
smart cities. Apply this understanding to help refine and
kick-start innovative sustainability initiatives.
"Customer Value Analytics for Supply Chain Segmentation"
provides a methodology to model demand clusters within the
trade-offs between service (cycle times, quality, bundled
offerings, service levels and customization) and cost. Use this
research to help design a portfolio of supply chain capabilities
that are aligned to those clusters.
"The Implications of Cloud and SaaS on Supply Chain Consulting,
System Integration and BPO" explores how supply chain executives
are increasingly pursuing alternative delivery models. Follow the
advice in this research to engage the IT organization, and work
together to ensure that the supply chain services' sourcing
strategy supports business demands, while accommodating reasonable
IT security and integration requirements.
Manufacturing and Product Supply
Companies are leveraging global manufacturing resources to bring
new products and services to market. The expectations of
manufacturing are for flexibility, agility and reliability.
Companies must balance first-time production across increasingly
complex and regulated product supply networks and value chains.
Companies also must deal with new technology paradigms and identify
supporting talent models to deal with the explosion of information
and product flows, which, if not harnessed, represent massive
opportunities for misaligned goals, higher-cost inventory levels,
safety issues, and quality escapes and failures.
The following collection of research will help manufacturing
leaders and supply chain executives achieve these goals. It
highlights the importance of aligning manufacturing, supply chain
and business performance by tearing down the information silos
inside factories and across the manufacturing network to make
fact-based decisions between supply and demand.
"A New Demand-Driven Maturity Model for Outsourcing in the
Manufacturing Network" introduces the demand-driven outsourced
manufacturing maturity model and reveals its four stages. It also
reviews the ways to advance along the maturity curve, and defines
the steps to guarantee success.
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2011 Gartner, Inc. and/or its Affiliates. All Rights
Reserved.
"Aligning Manufacturing and Supply Chain Performance, Part 2:
The Hierarchy of Manufacturing Metrics" helps to connect
manufacturing's performance with the supply chain. Use this
research to better understand the interdependencies and/or
trade-offs between delivering a perfect order out of the plants and
keeping costs in line. This will help integrate manufacturing
performance measurements to increase the responsiveness, quality
and efficiency of manufacturing operations.
"Manufacturing 2.0: A Fresh Approach to Integrating
Manufacturing Operations With DDVN" offers a new approach to
integrating manufacturing operations to support the agility goals
of a DDVN. Apply this approach to rethink business process flows,
application architectures, delivery and support models, as well as
the required performance measurements so that manufacturing can
keep pace with the complexity of a DDVN.
"Asset Management in DDVN, Part 1: Building a Best-Practice
Foundation" looks at a renewed interest in asset management by
demand-driven organizations as they strive to become more
responsive and agile. However, recognition of the importance of
excellence in asset management doesn't automatically translate into
improved performance.
"Hype Cycle for Manufacturing Product Life Cycle and Operations
Management, 2011" explores how the demands facing manufacturers are
influencing product life cycle management and manufacturing
operations software trends. Gain insight from this Hype Cycle to
help prioritize technology investments that enable and support the
ability to conceive, design and predictably produce quality
products anywhere.
Distribution and Logistics
Logistics costs represent more than 10% of product-centric
company revenue, and while traditionally viewed as simply a cost of
doing business, best-in-class firms now recognize the strategic
importance of global logistics. While 26% of companies regrettably
still see logistics as a cost of doing business, more than 30% now
consider SCM as strategic and their primary source of competitive
advantage. Furthermore, while reducing cost was historically the
primary goal of practitioners, Gartner research now finds that
combining improved efficiency and productivity, service, and
overall profitability are critical objectives. Our research also
found that 84% of companies see global SCM complexity growing, and
managing risk has become a global logistics imperative. We are now
seeing companies improving service levels, while also realizing 15%
to 30% cost savings, by applying segmentation and network design
techniques to their logistics operations.
The following collection of research will help distribution and
logistics executives achieve these goals. It will help them
understand supply chain user wants and needs, other market trends,
emerging best practices, strategies and innovative approaches for
managing advanced global logistics operations or third-party
logistics providers. The research will also provide strategies for
managing the global value chain and improving the resilience of the
supply chain in the face of geopolitical risks.
"The Gartner Framework for Developing a Demand-Driven Global
Logistics Strategy" introduces a set of concepts and frameworks
that companies across all industries will find to be vital on their
journeys toward aligning a global logistics strategy with
demand-driven transformation. Use this analysis to better
understand the differences in demand-driven logistics, align
logistics to demand-driven strategies, and apply a framework and
maturity model to align logistics with the demand-driven
transformation.
"2011 Global Crisis Highlights the Need for Logistics-Focused
Supply Chain Risk Management" discusses how geopolitical and
environmental risks can threaten supply chains. Follow the
advice
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2011 Gartner, Inc. and/or its Affiliates. All Rights
Reserved.
in this research to start improving the response to supply chain
instability to develop a more resilient supply chain.
"The Essential Role of IT in Logistics Outsourcing" addresses
the role the IT organization must play in the evaluation, selection
and support of prospective outsourcing partners. Apply the
framework set out in this research to help select a best-fit
third-party logistics provider.
"Global Trade Management Maturity Model Supports Value Chain
Transformation" outlines the defining characteristics of companies
in each of the four stages of maturity for global trade management
(GTM). Become familiar with this model to understand what separates
the leaders from the pack, and to gauge the sophistication of your
GTM processes.
"Beyond the Perfect Order: Measuring the Customer Experience of
Your Supply Chain" discusses what leading companies are doing to
gain a cohesive, outside-in view of their customers' experience
with their supply chains. Use this insight to jointly create value
with customers.
Supply Chain IT
Managing a global end-to-end supply chain isn't possible without
the technology to enable it. However, we continue to see supply
chain technology projects implemented in silos that deliver less
than optimal benefits to the broader value chain. Part of the
challenge is the technology itself, but quite often, issues point
back to organization and alignment to business goals. Addressing
this task starts with defining an architecture that supports a
DDVN, where the organization defines service levels by customer
segments and the appropriate process and technology deployed.
The following collection of research will help supply chain IT
leaders execute these tasks and achieve these goals. It will show
how to leverage new technologies for integration, collaboration,
transparency, traceability and sustainability in the global supply
chain. The research will also drill deeper into topics such as
transformation, IT and business organization, track-and-trace
solutions, the convergence among digital content, IT and
operational technology, the emergence of sustainable business
systems, and operations intelligence.
"Technology's Role in Supporting Different Levels of S&OP
Process Maturity" presents Gartner's S&OP maturity model. Apply
this model to help the IT organization identify the challenges of
the different stages, and to support its business partners in
developing its S&OP process and technology road maps.
"Sustainable Business Systems, Part 3: Differentiating
Sustainable Solutions by Functional Domain" provides a framework
that classifies sustainability software applications into a series
of functional domains. Use this research to understand the
relationship between sustainability and increased business value,
and the key role that IT enablement plays in maximizing business
value. This insight can help drive business value through
sustainability.
"Evolving the Supply Chain and IT Relationship" provides a road
map for transforming the supply chain executives' relationship with
the IT organization. Follow this road map to take this relationship
from technology provider to service provider, and then from
business process enabler to, ultimately, business process
leader.
"User Survey Analysis: Understanding Supply Chain Management
Software Buyers, North America, 2011" reports the results of
Gartner's fourth annual supply chain survey, which indicates
renewed optimism in acquiring and deploying supply chain software.
Leverage this research to understand the key SCM business and
technology issues affecting organizations.
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2011 Gartner, Inc. and/or its Affiliates. All Rights
Reserved.
"Applying Gartner's Pace Layers to Supply Chain Applications and
Processes" introduces pace layering, how to classify supply chain
applications to the right pace layer, and then how to apply pace
layering to supply chain. Apply the guidelines in this research to
deconstruct the body of applications in the infrastructure and
develop a long-term, dynamic technology plan that fully leverages
IT investments.
Looking Ahead
Global turbulence and uncertainty are realities that modern
supply chains must be prepared to address. Building a resilient
supply chain that responds profitably and reliably amid increased
demand uncertainty will differentiate future leaders. Managing cost
and driving efficiency will remain cornerstones to any supply chain
operation. However, building a resilient supply chain requires
breaking traditional paradigms as to what defines a supply chain.
It requires a deeper linkage between demand, supply and product
development, with executive-level governance that ensures that the
right trade-off decisions are made. This not only requires process
excellence, but also the right organization and talent to drive
continuous improvement governed through appropriate performance
measures. The research provided herein will help executives start
to frame the path toward becoming a DDVN, and to support the
resiliency required to address the volatility ahead.
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Building a Resilient Supply ChainThis collection of research
addresses the new realities of today's supply network to help
position supply chain executives for success in 2011 and beyond.
Use it to drive resiliency, sustainability, agility and innovation
in the supply chain to achiev...REgional Headquarters
