@Risk

If you want to successfully compete in today’s complex, global, and increasingly unpredictable business environment, your company needs supply chain strategies that can respond quickly to changing market conditions.

But, how do you go about improving your supply chain agility so that you can better respond to both opportunities and threats? Are there certain steps you should follow to develop the flexibility that’s now required? For starters, take a look at your supply chain alignment. There’s no question that a supply chain that aligns your company with its suppliers, partners, and customers creates end-to-end efficiencies, strengthens your core business, and helps you gain competitive advantage.

An excellent white paper by A.T. Kearney can help you initiate the process. Titled, “Aligning a Misaligned Supply Chain: Improving supply-chain management to gain a competitive edge” , this 12-page report begins by outlining the benefits of a properly aligned supply chain:

• lower costs
• less required capital
• higher quality, and
• improved service.

Then, it goes on to describe in detail both the causes of alignment problems and how to re-configure misalignments. According to the report, in order to have a properly aligned supply chain, you must:

• understand true demand
• improve visibility of total supply-chain costs
• align incentive, and
• coordinate decisions and track compliance.

The authors use Toyota as an example of a company that has reached advanced levels of performance in each of thee four areas. The epitome of a successful automaker, Toyota has created a transparent demand plan with aligned operating parameters that maximize total supply chain performance (note obvious contrast with GM, as discussed in an earlier post).