In recent years, a wide range of political, economic, and environmental factors have caused a rapid rise in supply chain disruptions. For instance, Brexit, punitive tariffs and, more recently, the Covid-19 crisis have consistently confronted companies with new challenges and made the impact of disruptions to supply chains abundantly clear.
According to a study from 2019, supply chain disruptions result in productivity losses for every second company. However, more than a third of companies do not analyse the cause of their supply chain disruptions and only around 15 percent have full transparency across their end-to-end supply chain, which is why these companies report recurring sales losses.
Getting the structure of sustainable supply chains right
In view of growing geopolitical uncertainties and policy rules, transparent and stable supply chains are more important than ever. The necessary integrated digitalisation of processes and creation of full transparency across entire structures is, however, a major challenge.
With our supply chain transformation programme, you can improve the resilience and competitiveness of your enterprise and position it to be fit for the future.
Our approach for your successful supply chain transformation
The key factors for setting up a competitive and stable supply chain in the future are resilience, transparency, automation, flexibility, and regionalisation. They are the essential criteria for a strategic realignment of the supply chain and make a significant contribution to your long-term success.
Resilient supply chains that are at the same time as transparent as possible need to be created to enable rapid responses to disruptions and to optimise value chain networks. Optimising resilience is mainly based on the agile design of the organisation, decentralised structuring of supply chains, setting up and making use of redundancies, diversified structuring of the working environment and the permanent encouragement of learning processes. In this manner, dependencies are reduced and flexibility is improved, but the demands of transparency rise.
Seamless function- and enterprise-wide collaboration along the entire supply chain network requires full transparency of the end-to-end supply chain. The entire enterprise and supply chain structures as well as their processes should be mapped in real time using digital tracking tools and KPIs and integrated with each other. With the use of suitable supply chain management and monitoring, reliable forecasts can be made to raise responsiveness, risks can be prioritised and identified as well as quality and supplier standards secured.
The digitalisation or automation of processes is the driver to create transparency and optimise workflows. Innovative digital technologies, such as data analytics, blockchain, AI and RPA are contributing significantly to the improvement of process efficiency and effectiveness along the supply chain and enable better adaptation to the new reality.
Flexibility means transparent, integrated, and resilient processes along the supply chain, which improve the scope for action and responsiveness to changing conditions. Strategies for handling risks can be defined at an early stage, agility fostered by investments in data and technology, customer-focused strategies developed and sound cooperation and communication with supply chain partners ensured.
Setting up a regional supply chain network can help to improve flexibility and transparency and minimise risks. Through their shorter transportation and supply routes, local production and supply chains ensure greater and more rapid supply capacity and minimise vulnerability to disruptions. Reduced dependence on global supply chains and a reduction in the supply chain lead to less complexity and greater diversification of risk. Irrespective of the factors for regionalisation, the general rule is this: a streamlined but diversified supplier and supply chain network should be established to reduce and to proactively avoid supply chain disruptions and the costs of conflict.
Your added value
With our supply chain transformation programme, you can master today's drivers and demands, such as SAP S/4HANA, transparency, digitalisation, and regulatory requirements. By implementing new functions/tools, realising standardisation, track and trace solutions and the use of other innovative technologies, you can make your supply chains fit for the future. In this way, you reduce supply disruptions, improve efficiency and the effectiveness of your processes, improve supply reliability, reduce cycle times, prepare for new legal regulations, raise capacity utilisation and achieve a reduction in the costs of conflict and operating costs.
We would be glad to assist you by drawing on our extensive experience with designing sustainable, forward-looking supply chains that are fit for the new normal. Get in touch.
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Partner, Consulting, Value Chain Transformation
KPMG AG Wirtschaftsprüfungsgesellschaft
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