SUPPLY CHAIN

END-TO-END SUPPLY CHAIN STRATEGY

Definition of the Supply Chain strategic vision and enabling E2E model, to integrate the value chain and drive key attributes necessary for success in your market and organizational context

What challenge(s) do our clients face?

How to adjust your supply chain strategy and model under an E2E approach to achieve the required levels of customer centricity, agility, resilience, sustainability, and efficiency across global value chains, to face business challenges in the new era.

Historically, many organizations first developed their supply chains within limited geographical bounds, in vertically integrated models. Over time, encouraged by expansion and globalization, these models were broken down into specialist functions, supported by external players and IT systems, making supply chains increasingly fragmented. New pressures in the business environment, such as changing consumer behaviors, risk of large disruptions, and sustainability requirements, call for the integration of the extended supply chain.

Different industries value different combinations of attributes, and organizations face challenges in developing key capabilities in the right balance:

From our perspective, successful supply chains in this new context have evaluated what it takes to win in their industry and market, and embedded these characteristics in their strategies and models.

How do we help?

Integration supports clients to develop a robust, sustainable and implementable end-to-end vision and model for their supply chain, connected to the overall business strategy and goals

The end-to-end supply chain can deliver various advantages, which are more or less relevant in different markets and industries. We work with a strategic mindset and pragmatic hands-on approach to help you:

  • Translate your business strategy into clear Supply Chain requirements, guaranteeing leadership alignment
  • Ensure top-management buy-in and support, as required for a business transformational journey
  • Define the E2E strategic vision and targets, based on your organizational strategy, and an evaluation of the competitive landscape, to push the necessary discussions in terms of strategic trade-offs
  • Consider the external perspective, facilitating transparent discussions and alignments with suppliers and customers from a neutral position
  • Assess where technologies and systems are needed to support your overall strategy and target model
  • Understand and ensure the key success factors are in place
  • Prepare the organization internally, identifying changes in organizational structure, ways-of-working, and leadership and/or cultural behaviors
  • Implement Change Management actions from the start of the design, to ensure model adoption across the organization and support a successful implementation
  • Develop a clear roadmap for the phased evolution of your supply chain model, considering business context and capabilities to make it implementable

What are the benefits?

Defining and implementing a cohesive end-to-end supply chain strategy enables your organization to meet your wider strategic objectives, bringing relevant benefits to the organization, suppliers, and customers:

  • IMPROVE REVENUE AND PROFITABILITY: Develop a new model that will support sustainable growth, in alignment with your business strategy and goals
  • BECOME CUSTOMER-CENTRIC: Develop the E2E model and capabilities that will enable right-fit service solutions to drive positive experiences along the customer journey
  • IMPROVE INNOVATION: Develop integration, collaboration and synchronization solutions across the extended Supply Chain to improve time-to-market under a customer-centric approach
  • INCREASE AGILITY: Identify opportunities to develop flexibility and responsiveness capabilities across the supply chain to react faster to market changes
  • BUILD RESILIENCE: Identify where the extended supply chain is vulnerable to large disruptions and which capabilities must be put in place to build strength, along with risk management strategies to ensure reliability
  • IMPROVE SUSTAINABILITY AND ETHICAL CONTRIBUTION: Develop solutions in an integrated way with suppliers and customers to drive significant positive environmental and social impact
  • IMPROVE EFFICIENCY: Identify cost- and speed-optimal solutions across the extended supply chain elements, in alignment with the required levels of agility, resilience, and sustainability

 

How does it work?

We assess the end-to-end supply chain as a whole, from its overall alignment with business strategy down to each individual component, and the relationships with other business areas and key players in the value chain.

Integration utilizes the following framework to assess the E2E level of a company’s supply chain and identify opportunities for its evolution, in full alignment with the business strategy.

Drive the Strategy E2E Elements Support the Strategy Business Strategy & Goals and Requirements for Supply Chain SCH E2E Strategic Vision E2E SCH Attributes E2E SCH Strategic Goals Industrial/Logistics Model, Technology and Networks Upstream & Downstream Strategies/Models Processes, Governance and KPIs IT Technology and Physical Infrastructure Organizational Structure Culture and Leadership E2E Elements Translation

To assess the end-to-end value chain opportunities in an organization, we consider 3 different dimensions to be evaluated thoroughly:

  1. Inside the Supply Chain – We assess all of the components in the framework, focusing on the organization’s Supply Chain, even if all of its functions are not grouped within a single area.
  2. Inside the Organization – We evaluate the level of integration, collaboration, and synchronization of each component with other business areas, with a particular focus on commercial strategy (GTM), innovation (I2M), and sustainability/ethical compliance.
  3. Outside the Organization – Finally, we look outside the organization’s boundaries and assess the level of integration, collaboration, and synchronization of each component with the main players in the value chain.

Three Assessment Dimensions (Process Assessment Example)

Inside Supply ChainMega-process Outside the companyValue chain integration Inside the companyInternal Harmonization 1 2 3

We structure our proprietary methodology to assess the E2E maturity level of the Supply Chain Strategy and model, customize solutions for the gaps identified, and develop an implementation roadmap that leads our clients into this transformational journey.

Strategic Alignment and AS-IS Diagnosis Definition Evolution Roadmap E2E Supply Chain Model
  1. Strategic Alignment and AS-IS Diagnosis:
    • We understand the business strategy, drivers and goals, and translate these into clear requirements for the supply chain, through interviews and workshops with the top management and the Supply Chain Leadership team in the organization.
    • Based on these requirements, we assess with the top management and the Supply Chain Leadership the current supply chain performance. It is common in our experience to find differing expectations across the organization’s leadership, which generates unrealistic targets and generates frustration.
    • Having this clarity, we evaluate the different components of the supply chain – both qualitatively and quantitatively – to define its E2E maturity level, identify the gaps, and the possible root-causes. This is achieved through in-depth interviews with key professionals from the Supply Chain function, and other areas (Sales, Finance, R&D, HR, etc.), data analysis, and benchmarking.
  1. E2E Model Definition:
    • Working with the Supply Chain Leadership team, we assess the supply chain strategy and define the necessary adjustments (or even a full redefinition) to meet the agreed requirements, and set concrete strategic attributes and goals. Based on these and the gap assessment, the required E2E maturity level is defined and translated to guidelines for the different Supply Chain components (Network, Processes, Organization, Technology, etc.).
    • We develop the directional TO-BE states for each component, the solutions needed to reach these, and the proposed multifunctional teams that should develop the implementation with us. Involvement of the multifunctional team is critical, as key professionals of functions such as Sales, Finance, Procurement, and HR will be suppliers and/or clients in the new E2E model
    • Workshops are held with the multifunctional teams to develop each component’s TO-BE state, and detail the solutions to address the gaps identified, define the initiatives required to implement (including preliminary high-level timelines), and identify potential bottlenecks and/or required enablers.
    • We validate the TO-BE states and solutions with both the Supply Chain Leadership team and top management, to ensure strategic alignment and solution buy-in – this is a key part of the Change Management process, to guide the whole organization to embrace the transformation.
  1. Evolution Roadmap:
    • Leaders are defined for all initiatives and we detail the activities and timelines together with them, with a high-level evaluation of impact and complexity, considering technical and organizational requirements.
    • We conduct prioritization workshops of the E2E initiatives with the Supply Chain Leadership team and top management, to balance quick wins with complex initiatives to guarantee that implementation is feasible given the company’s context and capabilities in place.
    • We develop an overall implementation roadmap and a high-level implementation plan for each initiative and design the necessary governance to execute the transformation, embedding Change Management actions to ensure adoption.

SUCCESS STORIES

CHALLENGE

Our client, a global player in the Foods industry, changed its business strategy to become multi-category, as the market for its leading category was stagnating. Focus was placed on developing fast-moving categories and this implied an organizational transformation to become more customer-centric and agile, while keeping costs under control.  The new strategy posed significant challenges for Supply Chain, which had focused on efficiency excellence in a high-volume and stable category.

APPROACH

We developed a strategic vision and model that addressed all the Supply Chain elements to embed the new attributes needed to support the business strategy. The new model considered developing optimized category supply chains, business connection, and integration, collaboration, and synchronization across the extended supply chain.  This called for the assessment and redesign of all Supply Chain elements, and we supported by first focusing on the optimization of the industrial networks by category across Latin America, then the redesign of the Supply Chain processes, governance, KPIs and organizational structure, identifying the overall necessary shifts in leadership/cultural behaviors to support the new model. An integrated transformation roadmap was developed to guide the organization in the implementation of all the new E2E model initiatives.

RESULT

The network optimization generated savings of 6%-10%, and embedded agility through more efficient processes to improve the supply chain’s responsiveness to changing market needs.  The Supply Chain functions were reorganized, enhancing organizational and process integration while reducing cost by 5%.   The client understood the necessary changes in cultural and leadership behaviors and, more importantly, assumed this as a business initiative and not merely a Supply Chain one that implied a transformational journey, with a clear TO-BE model and an actionable roadmap to achieve it.

CHALLENGE

Our client, a global petrochemical organization, was operating in a new country after significant multi-year investment and was struggling to adjust to local market dynamics while stabilizing production after the industrial ramp-up.  In addition, there were internal misalignments between the Sales, Manufacturing, and Logistics areas that drove a reactive approach to demand, impacting revenue, service level, and costs. The organization’s leadership thought the issue was focused mainly on the O2C process, but the symptoms indicated the problem was more complex. The pressure was high, as the company had to achieve aggressive EBITDA and market share targets that had been committed to shareholders and banks.

APPROACH

We started with a quick Supply Chain assessment, to validate the problem and identify the root causes of poor performance.  We identified several pain points, with O2C being just one, that called for an integral E2E approach.  We divided our support into 2 projects, first to focus on the redesign and implementation of 1) the S&OP process to improve product availability, 2) a control tower to improve logistics agility/service level and 3) the Supply Chain organization, as it was fragmented in several areas. The second project was focused on the redesign and implementation of 1) the O2C process to improve order cycle time and collection and 2) the transportation model to improve service level and reduce cost. In both projects we supported the client in the implementation, first leading the new processes and then transitioning these to the client’s team.

RESULT

The EBITDA and market share targets were achieved within the time-frame set, which helped bring down the pressure level on the top management team.  The planning process was significantly improved, driving better service levels to customers while reducing slow-moving inventory by 10%.  The O2C process improved, reducing the order cycle time by 25%. Finally, the new transportation model drove savings of 20% driven by planning improvements and improved tariffs (bidding execution).

INDUSTRY EXPERIENCE

Integration has supported organizations from a wide range of industries, including Consumer Goods (Food & Beverage, Beauty, and Personal Care, Home Care, etc.) Healthcare, Home Appliances, and Textiles, to design their E2E Supply Chain Strategies in Latin America, Europe, and the USA.

We have gained solid knowledge after years of working with players from different tiers of the value stream (Distributors, Retailers, Manufacturers, and Commodity businesses). This enables us to understand the key factors required to design and implement your E2E Supply Chain Model and mobilize benchmarks/best practices adapted to your unique needs.

TALK TO US

Alejandro Martinez

Alejandro is a Managing Partner in our Mexico operation. Alejandro has spent over 20 years within consulting, as well as within Industry, having been factory manager and chief of production for Kimberly-Clark. He has worked extensively across Mexico, Latin America and the United States developing deep experience in Consumer goods, Retail, Manufacturing, M&A and particularly [...]

Gilberto Sarian

Gilberto is a founding Partner at Integration. Over the course of more than 25 years he has led the development of Integration`s award-winning Supply Chain practice, advising international clients across Latin America, Europe and USA. With a background in Engineering, he frequently participates in events and lectures across the world, to discuss latest trends and [...]

João Barros

João is a partner at Integration and has been working since 2006 in our Supply Chain practice. During this period, he been instrumental to the practice's development in Integration's 7 offices around the world, contributing directly to its numerous awards in Brazil. He has led, and continues to lead on numerous projects in Planning, Distribution, [...]

Luis C Vidal

Luis is a Managing Partner at Integration where, since 1999, he has been working in the Supply Chain practice. During this period, he has led projects in the most diverse sectors and in themes such as Logistic Optimizations, Process Efficiency, Planning (S&OP), Industrial Strategy, Go-to-Market Strategy and Distribution Structure. His international experience encompasses the opening [...]

Ricardo de la Cueva

Ricardo is a senior specialist within Integration’s Supply Chain practice and has an MBA in Operations and Supply Chain from Rijksuniversiteit Groningen in the Netherlands. Having worked for over 20 years in consulting, he has developed extensive experience leading and advising on projects on an international scale across diverse industries including Consumer Goods, Healthcare, Education [...]

Stephen Fournier

Stephen Fournier is a Manager within Integration’s U.S. operation. Stephen is an experienced Strategy and Supply Chain consultant. He supports our clients in the development of Supply Chain Strategies, improving Operational Eficiencies and completing Strategic and Operational Transformations in sectors such as Food and Beverage, Consumer Goods and Retail. Stephen holds a degree in Management [...]

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