Video
Turning a supply chain into a close partner with a company's business units can result in higher productivity and customer satisfaction, among other benefits. Miltiadis Athanassiou, a partner in Bain's Performance Improvement practice, discusses how to turn a supply chain into a competitive advantage through three different paths.
Read the transcript below.
MILTIADIS ATHANASSIOU: Increasingly, companies want the supply chain to be a true business partner. The question is where to look for value in order to realize that. It can be that the cost is too high. It can be that they cannot support actually their growth pipeline and their new product development, because the assets they have just cannot churn out enough products in time at the right cost level. It can be that they spend too much capex on all disadvantaged assets.
Therefore, it's important to understand where the main pain points lie and try to tackle exactly those with the right prioritization and with the right tools. What we find is that you can have different solutions depending on the status of the company and also the context of the ask. There are three approaches [for] how to do this. You can talk about quick wins—stuff that can be quickly implemented, hit the bottom line, but [doesn't] have a significant impact.
It can be a step-function improvement. You can change a process that allows you to hit a completely different price level, or you can bring certain automation in that allows you to be much faster, or you choose to go for complete reinvention that includes network optimization and transformation, includes different ways to procure, different ways to service your clients, and obviously, different product design development and portfolio. When done right, the supply chain can become a true business partner and be actually a competitive weapon for the company.
Read the related Bain Brief: It Takes Two to Tango—Is Your Supply Chain a True Business Partner?
First published in juin 2016