U.S. manufacturers are optimistic about the financial impact of potential policy and regulatory changes, as revealed by the Supply Chain Readiness Study that TBM recently completed with Aberdeen Group. But the disconnect between supply chain priorities and capabilities is cause for concern.
Two Ways You Can Learn More
- New Research Report from TBM and Aberdeen Now Available
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Having the right supply chain capabilities enables manufacturers to respond quickly to policy changes no matter how well a plan is executed. In fact, we recently partnered with Aberdeen to examine how manufacturers are responding to the uncertainty around immigration, trade, and other potential U.S. policy changes.
The research revealed that manufacturing leaders expect policy changes to have a positive financial impact on their businesses. Whatever happens – in Washington or elsewhere – supply chain capabilities need to be aligned with business priorities for companies to respond quickly and reap any financial gains.
Supply Chain Capabilities: Priorities vs. Readiness
The chart “Importance vs. Readiness”, compares the rankings of supply chain capabilities by importance against leaders’ confidence that each capability is where it needs to be. When considering specific capabilities, business leaders feel their S&OP processes are up to snuff. They are less confident about other high priority areas, including supply chain network design, inventory planning and optimization, inbound and outbound logistics, and global trade management.
Supply Chain Capability Challenges: People, Process, or Technology
To dig a little deeper into this issue, we asked manufacturers to rate the challenges (people, process, or technology) for each of these supply chain capabilities. Most of their supply chain capability challenges revolve around process issues. S&OP, where the biggest challenge is people, was the only exception. That’s understandable, considering the cross-functional cooperation required to make S&OP work effectively.
Interestingly, there wasn’t much overlap. Some supply chain capabilities face mostly process challenges (supply chain network design and demand planning and forecasting) or technology challenges (inventory planning and manufacturing) or people challenges (S&OP and global trade management). Of course, people, process, and technology all must be managed to some degree within each of these areas.
Whatever happens in Washington, in today’s ever-changing global economy manufacturers will always have to prepare for and respond to government policy changes. Doing that successfully requires robust supply chain capabilities. While we wait for any major changes to be enacted, it’s a good time to take a good hard look at your key supply chain capabilities, including your team’s skills, process rigor, and technological capabilities, and identify any gaps that need to be closed.
Source: Supply Chain Readiness Study by TBM Consulting Group and Aberdeen Group, June 2017.
If you would like to download and read the full Aberdeen Group / TBM Consulting Research Report on Supply Chain Readiness, click here.
By Ken Koenemann, Vice President Technology and Supply Chain Practice, TBM Consulting Group, Inc.