Building the logistics of the future
Mycroft Assistant: When building the logistics of the future, not only automation of work and abstract quantitative values as such are important, but also a strategic vision of trends in the world. As well as an understanding of how these trends will affect the company's activities in the medium term. For our part, we can solve the issue of automation (by offering Mycroft Assistant expert inventory management system), but the issues related to the strategy of work lie entirely on the management of the company and depend only on the will of the manager.
Suggestions for solving strategic problems based on the experience of the well-known consulting firm McKinsey (founded in 1926; profiled in management consulting; 17,000 employees) were well described in an English-language article that we bring to your attention in Russian translation.
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“Building the logistics of the future”
Many logistics chains are not ready to work in the upcoming reality. Most were designed (some brilliantly) in order to ensure stable, high-volume production, taking advantage of low-cost production in China and other developing countries. But in the future, when the attractiveness of locating production is changing rapidly (as well as the economic feasibility of producing large volumes), the lack of flexibility is fraught with danger.
It is upcoming new conditions, the main problems of which are the growth of uncertainty and the complexity of doing business, will come sooner than many companies expect. Some problems, such as sales volatility or active capital movements, for example, have always affected supply, but now everything is aggravated by a general economic downturn. At the same time, other changes associated with the growth of world income and the emergence of reliable suppliers from emerging markets will have an impact on logistics for another decade. As a result, for the strategic decisions taken in the supply chain, there is a problem that the decision made will not have a positive economic effect as a result of the influence of forces that are beyond the control of the manager.
Seeing this trend, some advanced logistics companies are working to solve the problem in two directions. First, they diversify their old common supply chain into several small ones that do a better job with complex tasks. Secondly, they see supply chains as protection against problems associated with changes in the working conditions of production facilities. A look at how pioneers solve their problems today can shed light on how to get more out of their streamlined supply chain.
Two problems
The stakes are higher than ever. “In our direction,” says Jim Owens, former chairman of the board of directors and CEO of Caterpillar (a manufacturer of construction equipment), “the company that best manages its logistics may have the greatest competitive advantage. This is one of the components of success. ”Despite this, the classic logistics chains of most global companies are poorly prepared for new conditions, which are characterized by growing complexity and unpredictability.
Unpredictable world
According to a McKinsey study, almost 68 percent of the world's managers said that the risks associated with logistics will increase in the next 5 years. And there is nothing surprising in the fact that the 2008 financial crisis significantly increased the impact of unforeseen factors on logistics: active capital movements and currency fluctuations — all of this raises the issue of stability of the financial system, as well as the depth and duration of a recession. At the same time, solving current problems, one should not lose sight of the fact that a new, long-term trend of decline in the global economy will continue to negatively affect logistics even after the economy starts to grow again.
The growing influence of new markets is one of the main sources of unpredictability. Their economic growth will increase energy consumption by about a third in the coming decade. At the same time, the growing appetites of China and other developing countries for such resources as iron ore and agricultural goods are pushing world prices up and complicating supply chain planning. Also, the world raises the discussion of environmental problems, which also needs to be taken into account in the light of the fact that the world is moving towards tightening environmental regulation.
These long-term factors have a key influence that interrupts other “standard” sources of uncertainty. For example, the growth of developing countries contributes to the global foreign exchange market and raises the problem of protectionism in the developed world. But there are other problems: a different level of economic growth between different developing countries means that a change in the cost of labor can quickly change the relative attractiveness of the production facilities. In China, for example, labor disputes and the growth of suicides, led to the fact that wage growth was 20%, and in some cities in China even more. Bangladesh, Cambodia, and Vietnam - are experiencing similar problems, which also affects wages. And finally, as the quality of local production grows, the issue of choosing a production location becomes even more difficult.
Increasing complexity
Among other things, production workers and suppliers also solve the problems of the increasing complexity of the processes. For many companies, this means increasing the volume of work in order to be able to satisfy the increasing demands of their clients. For example, mobile phone manufacturers in 2009 introduced 900 different phone options in more than 2000. The growth of the range also affects the classic product categories: for example, the supply growth for baked goods, beverages, cereals and confectionery products increased by more than 25 percent between 2004 and 2006, and the number of SKUs in some large North American grocery stores exceeded 100,000 in 2009.
At the same time, globalization has given an advantage to companies that offer a wide range of products in developing countries, their market is becoming desirable as a consumer, and not just as a center of production. Effective distribution in emerging markets requires a certain degree of improvisation, since the existing retail format varies greatly from modern hypermarkets to private family shops. In Brazil, for example, Nestle is conducting an experiment by selling its products to low-income customers, directly, through two supermarket barges in two tributaries of the Amazon River.
Solving problems
In such conditions, the idea that a company can debug logistics once and for all is fantastic. Seeing this, some companies start solving problems in two ways. First, they divide the existing monolithic supply chain into several small and flexible ones. While new supply chains use the same resources and information, they manage them differently, helping the entire company increase customer service.
Secondly, industry leaders perceive their well-established logistics as insurance against unforeseen circumstances, actively and regularly conducting its inspection and modifying it, in the context of modern economic conditions with an eye on the medium term for five to ten years ahead. By doing this, companies are building a diversified and flexible logistic structure that is easier to cope with the challenges of the modern world.
From one to several
Separating a monolithic supply chain into several small and flexible ones helps reduce complexity, save money, and increase customer service. Let's take a look at a living example.
Case: Logistic Chain Separation
The manufacturer of consumer goods in the United States lost to its competitor market due to problems with logistics. Prior to this, the company (like many others) transferred most of its production capacity to China, leaving a small part of its production on the domestic market in order to be closer to its customers. The classic case: all the plants operate on a single production plan, producing a full range of the company's thousands.
Today, increasing volatility in consumer demand, together with an increase in the range of hundreds of new SKUs annually, has caused the supply chain to become unpredictable, and problems with the quality of work have become a problem in the quality of customer service.
Trying to rectify the situation, the company analyzed its portfolio in two dimensions: weekly demand volatility and total production for the week. Armed with the resulting schedule, the company began to rethink its supply structure. This kind of grouping allowed us to shed light on the options for optimizing supply.
Based on the analysis, the company decided to divide the overall supply chain into 4 independent channels. For products of relatively stable demand and high sales volumes (less than 10% of the range, but an overwhelming effect on profits), the company left production in China. But at the same time, the responsibility for the production of all other goods with unstable demand was shifted to the plant in the USA, and the plant in America and Mexico began to respond to goods with stable demand but low sales volumes. The development of production in a highly expensive country, such as America, makes economic sense even for low-demand goods, because in this case the company has the ability to bring goods to the market quickly, without lost sales, while working with a low stock of these goods in warehouses. As a bonus, there is an opportunity to produce goods, for the production of which greater qualifications are required (and the qualification of American workers is clearly more than Chinese), thus giving the company the opportunity to stand out in a competitive market.
At the same time, the company not only redistributed production resources, but also changed the planning and maintenance processes themselves. For the most volatile products of the range (those that have been produced in the USA), the company no longer needs to anticipate demand in advance, but was able to quickly produce goods in the amount corresponding to current demand. At the same time, managers at the American plant were able to extremely simplify the planning process for products with low, but stable, demand.
For overseas projected sales, the company has its plants in China, which produce goods on the basis of long-term plans, as it was until now. But now, these plans have become more accurate, because managers no longer need to take into account in their models of "noise", which gave the sale of goods with unstable demand.
As a result, the changes made it possible for the company to reduce the complexity of supply and production, which led to a reduction in the cost of production by 15 percent. At the same time, the quality of customer service has improved, and the average delivery time has decreased to three days from the usual ten. As a bonus, it allowed to increase the quality of products throughout the range.
How much to share?
The first question that arises before a company that studies the issue of dividing supply chains into flows is the number of these flows. The answer to this depends on the resources the company uses to produce and sell its products, as well as the use of these resources falls on the product distribution strategy and customer experience.
The requirement seems obvious, but in practice most companies use only the second part of the equation. They can, for example, readily identify those products that they consider to be leaders in terms of costs, service, novelty, or (in most cases) some combination of all of this. A smaller proportion of companies carefully study operational problems affecting the business and conclude only on the basis of these problems.
Often, good practice is to start the analysis with an analysis of the volatility of demand and sales, and compare the result with the cost of locating production in various locations. This kind of analysis gives an idea of the combination of "speed-cost" and can give an idea of where it is best to place production. For example, one of the global manufacturers, as a result of the analysis, saw that 2/3 of the demand goes along the basic assortment (approximately 40 percent of the entire product portfolio) and production can be moved to a country with lower production costs, while the level of customer service will not decrease .
Of course, companies must take into account the interest of customers in the planning process. Thus, one company operating in the consumer sector found that distinguishing in the packaging of goods was the determining factor in the choice of goods by the customer, and therefore, the company decided to transfer all production to one packaging line. Thus, in the industries related to assembly and packaging, we found that a significant contribution to decision making in the separation of supply chains and on the location of production is a factor in customer demand and the complexity of the product itself.
The advantages of "assembly"
Although the division into several logistic flows seems to be quite complicated, in reality, this approach allows companies to reduce complexity and makes it easier to manage supply, because in this case, the company's resources will be used best. At the same time, this kind of approach allows the management to use the classic tools to improve each logistic flow individually, which previously could not be applied to the whole chain.
For example, one manufacturer of consumer goods, after splitting the supply chain into several small ones, was able to use production options that were impossible before (the start of production of goods closer to the moment of demand, which reduced the cost of storing goods). Factories of the American company are now engaged in a complete set of products from several semi-finished products, thus shifting the date of creation of finished products to the date of actual sale. Which, of course, made it possible to reduce the cost of storing finished products and offset the impact of the high cost of American labor.
With an improved understanding of their logistics, companies can improve their operational efficiency. For example, one of the global manufacturers discovered that the effect of the separation of logistic flows was greater than the introduction of the practice of “lean” production at the factories. And of the advantages, the company received: a quick switch-over of the production of products for factories with a high production cost, which made it possible to more effectively solve the problems of producing complex goods.
Using built-in logistics as a risk protection
The advantages that small logistics chains provide are most manifested if the company adjusts their work in accordance with changes in external circumstances. Will today's built-up logistics make sense, for example, if Chinese currency rises in price by 20 percent, oil will cost $ 90 per barrel, and maritime transportation will be underloaded by 25 percent? It is very important for a company to invest in understanding the situation on the global market and determine which of the many questions like the above should be asked. Nike, for example, has produced more shoes in Vietnam for the first time since 2010 than in China.
The fact that a built-in supply chain will be able to withstand various scenarios, greatly affects the profitability of the company, and in the near future - and the viability of the company in general. In light of this, companies must carefully select their suppliers and manufacturers in order to reduce their costs if they can implement different scenarios. The task is to determine the most flexible option of supply and production, even if it is not the cheapest at the moment. This kind of approach requires a certain change in consciousness, not only from operating managers, but also from the entire management of the company.
At one company, for example, executives were concerned that a bet on a Chinese manufacturing hub could be a problem if conditions change. Investigating the issue, managers analyzed the cost structure and how it will change in the next five to ten years under the influence of current global trends. They also raised the question of how fluctuating prices and logistics costs will impact the company.
As a result of the analysis, the company concluded that, despite the fact that in the short term, China remains the most attractive place to locate production, but the risks associated with rate fluctuations and wage increases are quite high.And so much so that Mexico was chosen as the best alternative in the analysis of several possible development scenarios. Thus, the company began to build relationships with suppliers in Mexico and build up its manufacturing portfolio there so that, if necessary, be able to quickly switch from China to Mexico depending on changing conditions.
Another company did the same, diversifying its assets across several developing countries, which helped protect against fluctuations in labor costs, tariffs, taxes and other factors. It also helped protect the company from force majeure: fires, earthquakes and strikes.
Another North American manufacturer divided its production capacity between Brazil and Mexico to protect itself against exchange rate risks in these countries. Also, the company has invested in the division of capacities for the production of high-tech components that can be made only in Europe or the United States, between these two regions. This allowed not only protecting oneself from currency fluctuations and economic risks, but also made it possible to improve the supply of partners who work in emerging markets.
This kind of change, of course, is not so easy to make, since the supply chain is usually very deeply embedded in the structure of the company. To make such changes, it takes a lot more work and collaboration between departments than many companies are used to doing. In general, organizational problems have a key impact, as we wrote in the previous article “ Does your team create problems for suppliers? "
But, in any case, the result is worth the effort. By creating more flexible and efficient logistics that can work effectively in the face of increasing complexity and uncertainty, the company will be able to gain a significant competitive advantage in the coming years.
About the authors
Yogesh Malik and Brian Ruwadi executives at McKinsey in Cleveland; Alex Niemeyer is the director of the Miami office. The authors thank Sebastien Katch for his contribution to the creation of this article.
We, Mycroft AssistantWe are not a consulting company, because the issues of strategic development are beyond our competence. Unlike questions related to the automation of forecasting, inventory management, building plans and other related work with the supply - with this you can contact us.
Our automated expert inventory management system Mycroft Assistant helps small and medium businesses to avoid overstocking or shortage of goods in stock, reduce costs and costs, and increase company profits. Analyzing the history of sales and current balances by department, Mycroft AssistantForms a forecast and gives recommendations on which goods need to be purchased and on which trading goods are required. It also creates a plan for sales and purchases in future periods. The system replaces manual analysis and work with Excel, which allows the company to develop and work effectively without the involvement of additional staff.
Suggestions for solving strategic problems based on the experience of the well-known consulting firm McKinsey (founded in 1926; profiled in management consulting; 17,000 employees) were well described in an English-language article that we bring to your attention in Russian translation.
')
“Building the logistics of the future”
Many logistics chains are not ready to work in the upcoming reality. Most were designed (some brilliantly) in order to ensure stable, high-volume production, taking advantage of low-cost production in China and other developing countries. But in the future, when the attractiveness of locating production is changing rapidly (as well as the economic feasibility of producing large volumes), the lack of flexibility is fraught with danger.
It is upcoming new conditions, the main problems of which are the growth of uncertainty and the complexity of doing business, will come sooner than many companies expect. Some problems, such as sales volatility or active capital movements, for example, have always affected supply, but now everything is aggravated by a general economic downturn. At the same time, other changes associated with the growth of world income and the emergence of reliable suppliers from emerging markets will have an impact on logistics for another decade. As a result, for the strategic decisions taken in the supply chain, there is a problem that the decision made will not have a positive economic effect as a result of the influence of forces that are beyond the control of the manager.
Seeing this trend, some advanced logistics companies are working to solve the problem in two directions. First, they diversify their old common supply chain into several small ones that do a better job with complex tasks. Secondly, they see supply chains as protection against problems associated with changes in the working conditions of production facilities. A look at how pioneers solve their problems today can shed light on how to get more out of their streamlined supply chain.
Two problems
The stakes are higher than ever. “In our direction,” says Jim Owens, former chairman of the board of directors and CEO of Caterpillar (a manufacturer of construction equipment), “the company that best manages its logistics may have the greatest competitive advantage. This is one of the components of success. ”Despite this, the classic logistics chains of most global companies are poorly prepared for new conditions, which are characterized by growing complexity and unpredictability.
Unpredictable world
According to a McKinsey study, almost 68 percent of the world's managers said that the risks associated with logistics will increase in the next 5 years. And there is nothing surprising in the fact that the 2008 financial crisis significantly increased the impact of unforeseen factors on logistics: active capital movements and currency fluctuations — all of this raises the issue of stability of the financial system, as well as the depth and duration of a recession. At the same time, solving current problems, one should not lose sight of the fact that a new, long-term trend of decline in the global economy will continue to negatively affect logistics even after the economy starts to grow again.
The growing influence of new markets is one of the main sources of unpredictability. Their economic growth will increase energy consumption by about a third in the coming decade. At the same time, the growing appetites of China and other developing countries for such resources as iron ore and agricultural goods are pushing world prices up and complicating supply chain planning. Also, the world raises the discussion of environmental problems, which also needs to be taken into account in the light of the fact that the world is moving towards tightening environmental regulation.
These long-term factors have a key influence that interrupts other “standard” sources of uncertainty. For example, the growth of developing countries contributes to the global foreign exchange market and raises the problem of protectionism in the developed world. But there are other problems: a different level of economic growth between different developing countries means that a change in the cost of labor can quickly change the relative attractiveness of the production facilities. In China, for example, labor disputes and the growth of suicides, led to the fact that wage growth was 20%, and in some cities in China even more. Bangladesh, Cambodia, and Vietnam - are experiencing similar problems, which also affects wages. And finally, as the quality of local production grows, the issue of choosing a production location becomes even more difficult.
Increasing complexity
Among other things, production workers and suppliers also solve the problems of the increasing complexity of the processes. For many companies, this means increasing the volume of work in order to be able to satisfy the increasing demands of their clients. For example, mobile phone manufacturers in 2009 introduced 900 different phone options in more than 2000. The growth of the range also affects the classic product categories: for example, the supply growth for baked goods, beverages, cereals and confectionery products increased by more than 25 percent between 2004 and 2006, and the number of SKUs in some large North American grocery stores exceeded 100,000 in 2009.
At the same time, globalization has given an advantage to companies that offer a wide range of products in developing countries, their market is becoming desirable as a consumer, and not just as a center of production. Effective distribution in emerging markets requires a certain degree of improvisation, since the existing retail format varies greatly from modern hypermarkets to private family shops. In Brazil, for example, Nestle is conducting an experiment by selling its products to low-income customers, directly, through two supermarket barges in two tributaries of the Amazon River.
Solving problems
In such conditions, the idea that a company can debug logistics once and for all is fantastic. Seeing this, some companies start solving problems in two ways. First, they divide the existing monolithic supply chain into several small and flexible ones. While new supply chains use the same resources and information, they manage them differently, helping the entire company increase customer service.
Secondly, industry leaders perceive their well-established logistics as insurance against unforeseen circumstances, actively and regularly conducting its inspection and modifying it, in the context of modern economic conditions with an eye on the medium term for five to ten years ahead. By doing this, companies are building a diversified and flexible logistic structure that is easier to cope with the challenges of the modern world.
From one to several
Separating a monolithic supply chain into several small and flexible ones helps reduce complexity, save money, and increase customer service. Let's take a look at a living example.
Case: Logistic Chain Separation
The manufacturer of consumer goods in the United States lost to its competitor market due to problems with logistics. Prior to this, the company (like many others) transferred most of its production capacity to China, leaving a small part of its production on the domestic market in order to be closer to its customers. The classic case: all the plants operate on a single production plan, producing a full range of the company's thousands.
Today, increasing volatility in consumer demand, together with an increase in the range of hundreds of new SKUs annually, has caused the supply chain to become unpredictable, and problems with the quality of work have become a problem in the quality of customer service.
Trying to rectify the situation, the company analyzed its portfolio in two dimensions: weekly demand volatility and total production for the week. Armed with the resulting schedule, the company began to rethink its supply structure. This kind of grouping allowed us to shed light on the options for optimizing supply.
Based on the analysis, the company decided to divide the overall supply chain into 4 independent channels. For products of relatively stable demand and high sales volumes (less than 10% of the range, but an overwhelming effect on profits), the company left production in China. But at the same time, the responsibility for the production of all other goods with unstable demand was shifted to the plant in the USA, and the plant in America and Mexico began to respond to goods with stable demand but low sales volumes. The development of production in a highly expensive country, such as America, makes economic sense even for low-demand goods, because in this case the company has the ability to bring goods to the market quickly, without lost sales, while working with a low stock of these goods in warehouses. As a bonus, there is an opportunity to produce goods, for the production of which greater qualifications are required (and the qualification of American workers is clearly more than Chinese), thus giving the company the opportunity to stand out in a competitive market.
At the same time, the company not only redistributed production resources, but also changed the planning and maintenance processes themselves. For the most volatile products of the range (those that have been produced in the USA), the company no longer needs to anticipate demand in advance, but was able to quickly produce goods in the amount corresponding to current demand. At the same time, managers at the American plant were able to extremely simplify the planning process for products with low, but stable, demand.
For overseas projected sales, the company has its plants in China, which produce goods on the basis of long-term plans, as it was until now. But now, these plans have become more accurate, because managers no longer need to take into account in their models of "noise", which gave the sale of goods with unstable demand.
As a result, the changes made it possible for the company to reduce the complexity of supply and production, which led to a reduction in the cost of production by 15 percent. At the same time, the quality of customer service has improved, and the average delivery time has decreased to three days from the usual ten. As a bonus, it allowed to increase the quality of products throughout the range.
How much to share?
The first question that arises before a company that studies the issue of dividing supply chains into flows is the number of these flows. The answer to this depends on the resources the company uses to produce and sell its products, as well as the use of these resources falls on the product distribution strategy and customer experience.
The requirement seems obvious, but in practice most companies use only the second part of the equation. They can, for example, readily identify those products that they consider to be leaders in terms of costs, service, novelty, or (in most cases) some combination of all of this. A smaller proportion of companies carefully study operational problems affecting the business and conclude only on the basis of these problems.
Often, good practice is to start the analysis with an analysis of the volatility of demand and sales, and compare the result with the cost of locating production in various locations. This kind of analysis gives an idea of the combination of "speed-cost" and can give an idea of where it is best to place production. For example, one of the global manufacturers, as a result of the analysis, saw that 2/3 of the demand goes along the basic assortment (approximately 40 percent of the entire product portfolio) and production can be moved to a country with lower production costs, while the level of customer service will not decrease .
Of course, companies must take into account the interest of customers in the planning process. Thus, one company operating in the consumer sector found that distinguishing in the packaging of goods was the determining factor in the choice of goods by the customer, and therefore, the company decided to transfer all production to one packaging line. Thus, in the industries related to assembly and packaging, we found that a significant contribution to decision making in the separation of supply chains and on the location of production is a factor in customer demand and the complexity of the product itself.
The advantages of "assembly"
Although the division into several logistic flows seems to be quite complicated, in reality, this approach allows companies to reduce complexity and makes it easier to manage supply, because in this case, the company's resources will be used best. At the same time, this kind of approach allows the management to use the classic tools to improve each logistic flow individually, which previously could not be applied to the whole chain.
For example, one manufacturer of consumer goods, after splitting the supply chain into several small ones, was able to use production options that were impossible before (the start of production of goods closer to the moment of demand, which reduced the cost of storing goods). Factories of the American company are now engaged in a complete set of products from several semi-finished products, thus shifting the date of creation of finished products to the date of actual sale. Which, of course, made it possible to reduce the cost of storing finished products and offset the impact of the high cost of American labor.
With an improved understanding of their logistics, companies can improve their operational efficiency. For example, one of the global manufacturers discovered that the effect of the separation of logistic flows was greater than the introduction of the practice of “lean” production at the factories. And of the advantages, the company received: a quick switch-over of the production of products for factories with a high production cost, which made it possible to more effectively solve the problems of producing complex goods.
Using built-in logistics as a risk protection
The advantages that small logistics chains provide are most manifested if the company adjusts their work in accordance with changes in external circumstances. Will today's built-up logistics make sense, for example, if Chinese currency rises in price by 20 percent, oil will cost $ 90 per barrel, and maritime transportation will be underloaded by 25 percent? It is very important for a company to invest in understanding the situation on the global market and determine which of the many questions like the above should be asked. Nike, for example, has produced more shoes in Vietnam for the first time since 2010 than in China.
The fact that a built-in supply chain will be able to withstand various scenarios, greatly affects the profitability of the company, and in the near future - and the viability of the company in general. In light of this, companies must carefully select their suppliers and manufacturers in order to reduce their costs if they can implement different scenarios. The task is to determine the most flexible option of supply and production, even if it is not the cheapest at the moment. This kind of approach requires a certain change in consciousness, not only from operating managers, but also from the entire management of the company.
At one company, for example, executives were concerned that a bet on a Chinese manufacturing hub could be a problem if conditions change. Investigating the issue, managers analyzed the cost structure and how it will change in the next five to ten years under the influence of current global trends. They also raised the question of how fluctuating prices and logistics costs will impact the company.
As a result of the analysis, the company concluded that, despite the fact that in the short term, China remains the most attractive place to locate production, but the risks associated with rate fluctuations and wage increases are quite high.And so much so that Mexico was chosen as the best alternative in the analysis of several possible development scenarios. Thus, the company began to build relationships with suppliers in Mexico and build up its manufacturing portfolio there so that, if necessary, be able to quickly switch from China to Mexico depending on changing conditions.
Another company did the same, diversifying its assets across several developing countries, which helped protect against fluctuations in labor costs, tariffs, taxes and other factors. It also helped protect the company from force majeure: fires, earthquakes and strikes.
Another North American manufacturer divided its production capacity between Brazil and Mexico to protect itself against exchange rate risks in these countries. Also, the company has invested in the division of capacities for the production of high-tech components that can be made only in Europe or the United States, between these two regions. This allowed not only protecting oneself from currency fluctuations and economic risks, but also made it possible to improve the supply of partners who work in emerging markets.
This kind of change, of course, is not so easy to make, since the supply chain is usually very deeply embedded in the structure of the company. To make such changes, it takes a lot more work and collaboration between departments than many companies are used to doing. In general, organizational problems have a key impact, as we wrote in the previous article “ Does your team create problems for suppliers? "
But, in any case, the result is worth the effort. By creating more flexible and efficient logistics that can work effectively in the face of increasing complexity and uncertainty, the company will be able to gain a significant competitive advantage in the coming years.
About the authors
Yogesh Malik and Brian Ruwadi executives at McKinsey in Cleveland; Alex Niemeyer is the director of the Miami office. The authors thank Sebastien Katch for his contribution to the creation of this article.
We, Mycroft AssistantWe are not a consulting company, because the issues of strategic development are beyond our competence. Unlike questions related to the automation of forecasting, inventory management, building plans and other related work with the supply - with this you can contact us.
Our automated expert inventory management system Mycroft Assistant helps small and medium businesses to avoid overstocking or shortage of goods in stock, reduce costs and costs, and increase company profits. Analyzing the history of sales and current balances by department, Mycroft AssistantForms a forecast and gives recommendations on which goods need to be purchased and on which trading goods are required. It also creates a plan for sales and purchases in future periods. The system replaces manual analysis and work with Excel, which allows the company to develop and work effectively without the involvement of additional staff.
Source: https://habr.com/ru/post/295340/
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