Do we need to Review our Supply Chain?

Is it necessary to change the network structure? Sometimes a network design needs to be generated due to mergers, new markets, products, and so on. This simple questionnaire can help to pinpoint these drivers and assess the need for a structural change. On the same token, it can also result in a recommendation to not change the structure but to search for changes in alignment. Adapted from Robert E. Murray (1991), the questionnaire is presented in this post, and includes a variety of questions such as; have there been changes in the companies’ markets and products? Have there been customer service issues? During different sessions we discuss logistics, transportation, and production operations to gain insight in the current structure.

It is usually quite clear if there is indeed a need to change. In these cases, it merely helps to understand what drove this need because it is usually as a result of a complexity of factors. Roughly speaking, we focus on seven topics. First of all, changes in the market form a primary driver. Think about the size, customer density, and changes in the market channels. A second important driver is formed by the changes in the product portfolio. Have there been additional products introduced? The other topics that are addressed are customer service, logistics operations, transportation operations, product operations, and other. Systematically, these topics are evaluated in search for structural changes. By ranking the change on a 0 to 6 scale, an indication of the total change can be derived. Murray suggested that above a certain threshold, above 70 points, a strategic redesign is called for.

SupplyChain_Need4

 

This post is also available in: Dutch

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