Customer Service Improved
Cost of providing the service down
How does that sound to you?
Supply chain transformation and Copernicus
Retailers and manufacturers are under immense pressure to increase the performance of their supply chains, so it is not surprising that many resort to tough tactics in response to growing competition.
When companies need to cut costs, increase margins or gain a competitive advantage, one response is to rationalise distribution networks or to improve efficiency by standardising systems, in order to achieve greater levels of integration and reduced costs. Supply chain optimisation is the ultimate goal, but what does this mean and how is it achieved?
Very often, the focus for the largest companies is on big step changes or ''transformations''. This may be the only option for survival or for gaining sustained competitive advantage, but it can lock management into a ''rationalise, standardise'' loop, in which all the attention is on network redesign or IT systems.
In the SME sector where we battle every day for our business lives its not quite so easy. For many of our clients the in-house resources to delegate or allocate such a project to simply do not exist. That's where we come in …….
Initially, it is important to understand the main driver behind the need for change, whether it is improved customer service, survival, or to meet ongoing cost and margin objectives: ''The key driver for continuous improvement is cost… obviously the customers are important but cost is definitely the driver,'' is the view of one logistics director from a manufacturing company.
The challenge for organisations caught in the loop, is to find a way to break out of the cycle. Having made the initial change investment with Copernicus, you have created an opportunity to optimise your supply chain by continually driving for incremental improvements in people and processes
It is not easy. But our clients do successfully review and improve their supply chain processes at an operational level which leads to continuous improvement, the strategic significance of this activity can then be recognised and capitalised upon at senior level.
Correct supply chain systems can help organisations understand supply chain performance, but IT does not always provide the full insight. ''Another big issue with IT is that it''s tough to get all the different systems across the supply chain aligned and producing integrated information,'' a retail supply chain director commented. So SME's make do with the systems that they currently have rather than take on large scale change.
There is a need therefore to understand, measure and continuously improve supply chain processes using lean working practices in order to create the best climate for controlled change and to significantly reduce the risk associated with major transformations. ''Process improvements and IT are of equal importance, one would not work without the other. IT enables the area of waste to be pin pointed and means the future improvements resulting from improved processes can be measured,'' said a retail IT director.
The result is a way of working that allows continuous improvement or ''optimisation'' to be achieved at the same time as standardisation. However this approach needs to be supported by a company philosophy that recognises the strategic value of continuous improvement.
Service up, cost down
We say it is possible to increase service levels and continually reduce cost at the same time. The challenge for organisations is to believe this is achievable and then structure the business to create a lean way of working, supported by training and people development programmes, whilst focusing all the time on the needs of customers.
Companies must recognise that lean is not an end in its own right. It is a journey, where the opportunities for continuous improvement and optimisation are ongoing. Even more important, standardising on lean processes that help to optimise the supply chain also provides a deep insight into the true dynamics around extended supply chain processes. Organisations, particularly in the retail sector, find that with this knowledge and control, it is possible to reduce the inherent risk associated with transformational supply chain change.
Copernicus guiding your business to logistic success
To find out more about how Copernicus Consulting can help your business, please call us on +44 (0) 870 879 5365
or e-mail us at firstname.lastname@example.org