As global businesses continue to battle supply delays, escalating fulfillment costs, talent shortages, and a barrage of other challenges, designing your supply chain to be agile and resilient is more crucial than ever. Smart technology investments are imperative to supply chain agility and protecting your customers and bottom line.
But how do you make smart supply chain planning investment decisions?
In this step-by-step guide, we’ve got you covered. We’ve collected expert advice from analysts, consultants, and technology teams to equip you with everything you need to navigate your own supply chain investment strategy.
Part 1: Steps to Creating a Successful Supply Chain Investment Strategy
/ Define your supply chain business performance goals
Supply chain volatility is here to stay. So how do you plan and set goals amid the chaos? Your supply chain must survive and thrive in the new reality and be ready to take on future challenges. In other words, how do you want to compete? To achieve agility and resilience will require strategic thinking and planning.
Are your business goals centered around growing revenue or maximizing profits? Operating at peak efficiency? How about attracting and retaining good talent for difficult-to-fill roles? Whatever your goals, they must be clearly defined before making investment decisions.
/ Identify key stakeholders early in the process
To set business and performance goals, round up the troops early in the process. According to Gartner, competing priorities can cause supply chain leaders to overlook the importance of building a base of influential collaborators and supporters who can advocate for their work and execute the strategy.
The old adage “no man is an island” applies when it comes to planning and executing your supply chain agenda. Gartner recommends creating a list of internal stakeholders by identifying people and groups who are decision makers or influencers of supply chain’s strategy, objectives, and progress. Don’t forget individuals or groups below the C-level who may be adopters later on.
/ Pinpoint key obstacles and bottlenecks to making investments
Did you know that how companies approve investments can impede supply chain agility? Long, drawn-out processes are no longer effective, and many companies have abandoned the colossal and messy annual budgeting process in favor of monthly or quarterly sprints.
It’s important to nail down your strategic goals prior to the budgeting process so you can align the proper resources to fund your investments. A decentralized budgeting process has the added benefit of flexibility, allowing you to take advantage of future opportunities instead of operating in reaction mode.
Besides the budgeting process, take stock of other obstacles that may impede your progress. For instance, are you constrained by insufficient working capital to fund your investment? Depending on the size and complexity of your business, create an investment business case that includes a cash flow analysis.
¹ Gartner: How Supply Chain Leaders Can Improve Relationships to Win Support and Influence Others 28 October 2021 – Caroline Chumakov, John Johnson
Part 2: Balancing Plug-and-Play Modular Solutions with One-Size-Fits-All
Did you know that how companies approve investments can impede supply chain agility? Long, drawn-out processes are no longer effective, and many companies have abandoned the colossal and messy annual budgeting process in favor of monthly or quarterly sprints.
It’s important to nail down your strategic goals prior to the budgeting process so you can align the proper resources to fund your investments. A decentralized budgeting process has the added benefit of flexibility, allowing you to take advantage of future opportunities instead of operating in reaction mode.
Besides the budgeting process, take stock of other obstacles that may impede your progress. For instance, are you constrained by insufficient working capital to fund your investment? Depending on the size and complexity of your business, create an investment business case that includes a cash flow analysis.
01 First determine goals and objectives.
What are your business objectives? What goals will your planning technology support? Don’t forget future requirements. Your planning capabilities should be deep enough to support your business as it grows and evolves. If your company has an advanced supply chain planning roadmap, you may want the deeper, dedicated coverage of a best-of-breed.
02 How strategic is supply chain planning to the vendor?
How closely does the vendor’s out-of-the-box solution match your business needs? If extensive customization is required, what are the cost, time, and staffing requirements? Will the software–and the vendor–be flexible enough to support you as you grow? Will there be a need to expand into other business units/regions?
03 Estimate cost of customization and upgrades over the life of the software.
Domain appropriate choice of supervised, unsupervised or reinforcementa learning algorithm(s) (e.g. K-means clustering, decision trees, neural networks, etc.).
04 Assess software vendors’ acquisition history.
How has the vendor assimilated acquired companies/technologies? How well supported and maintained are acquired technologies and customers?
05 Consider training and development needs.
Ask vendors how they will support your team from contract through benefit realization. What skills are required for your team to operate the system effectively? If in-house talent is hard to come by, can the vendor support a SaaS model?
06 Maintaining and supporting the system.
Vendors of all sizes can deliver excellent–or not so great–technical support, so be sure to ask references about their support experience. Maintaining multiple systems can be a headache, but excellent support can make all the difference.
07 Ease of integration.
Large software suites will often claim they handle integration just fine, but you may need to throw a lot of money to consultants to make it work. Many best-of-breed technologies are designed for integration, and do their best work enhancing other, larger systems. Look for systems with the ability to integrate “agnostically” with other suites and best-of-breed providers.
