Supply Chain Strategy & Design

A well designed Supply Chain is an essential element in the delivery of business success and will directly support the achievement of overall business goals.

Challenges

The needs of supply chains changes over time: what was a perfectly good design for a business model a few years ago, may no longer be appropriate. Supply chain needs change due to:

  • Growth
  • Sourcing changes (particularly off/on-shoring)
  • Changing customer delivery expectations and geographic footprint
  • Transport, labour and facility costs
  • Mergers, acquisitions, and divestments
  • Product and market changes (e.g. a move to on-line trading)
  • Changing cost or profitability expectations
  • The proliferation of go-to-market channels (eg omni-channel retailing and online fulfilment)
Opportunities

Re-designing a supply chain network enables the delivery of products and services to customers in a timeframe and with a level of completeness that meets their expectations and does so at the best cost. Re-designed supply chains often see increases in flexibility (the ability to accommodate unexpected changes in customer expectations or events along the supply chain), visibility (the ability for supply chain operators to see what is going on in the supply chain) and control (the ability to take action to decrease the impact of changes and events). This often results in:

  • Increased customer satisfaction (and associated loyalty benefits)
  • Reduction in overall inventory holding (and the associated increase in free cash)
  • Lower supply chain costs (and increased competitiveness)
  • Greater employee satisfaction and engagement
Approach

While it is important to understand how supply chains work and to identify and exploit opportunities, it is essential to first understand the business context in which the supply chain operates. GRA approaches supply chain strategy and design from the whole-of-business perspective: what is the business objective, where is it going, what has informed the way it is now, who and where are its customers (and how do they look in the future), how does the business plan to meet its goals over the next few years? We work intimately with business leaders to capture and clarify the intent and purpose of the business – we work to understand it as if it is our own.

Once the business strategy is clear, we define how the supply chain should respond to it, now and as it evolves. We consider:

  • What the physical foot-print of the network should be
  • What should be produced or purchased from which locations
  • How products should flow through the network
  • Where and how much product should be held to satisfy the business aim
  • What the cost drivers are and how sensitive the bottom line is to them 
  • The capability that is required to operate the supply chain and execute the strategy
  • When, or if, to make a choice between in-sourced and out-sourced supply chain management.

We create, cost and test supply chain models to ensure they will support the business strategy and determine how they should best be deployed.

Outcomes

The following are outcomes of this approach:

  • A clearly defined supply chain strategy and plan that directly supports and delivers the business promise
  • Clarity on what is required to develop, implement and sustain a supply chain
  • A deep understanding of the financial impacts of the supply chain design options
Benefits

The benefits of this supply chain strategy consulting approach include:

  • Confidence that the supply chain design fits neatly with business strategy
  • A supply chain that has the potential to embed best practices and resilience in the business environment
  • The roadmap to implementing a supply chain strategy and associated operational design is clear
  • The business case is well founded and well understood
  • Reduction in supply chain costs – typically in the range of 10-15%

View GRA's Supply Chain Strategy Overview presentation. 

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Testimonials

"GRA's insight and experience helped us identify the biggest financial opportunities and where our efforts should be focused to successfully execute our strategy and deliver substantial operational improvements."

– Brett Kelly, National Supply Chain Manager, Officeworks

Typical results

  • 20-40% inventory investment reduction
  • increased service levels ranging up to 99.9%
  • 10%-15% reduction in supply chain operating costs
  • 5%-20% spend management savings
  • the ability to fund business initiatives from operating cash flow (OCF) improvements
  • improved return on capital employed (ROCE)
  • a minimum 3:1 ROI (10:1 to 30:1 typical)