From a supply chain perspective, these trends demand an outside-in approach, allowing quick responses to changing demand signals – based on predictive analytics – and optimization of customer lifetime value. However, Supply Chain cannot do this alone. To deliver customized services to profitable customers, insights from Sales, Finance and Supply Chain need to be merged into new, hybrid teams that are able to make the right trade-offs. The growing need for speed and agility are in sharp contrast with many of the processes that are in place today. At best, decisions are made in a monthly Sales and Operations Planning (S&OP) cycle, but for how long will a monthly cycle be short enough to enable companies to react to new opportunities on the spot? In the future, being able to act faster may make all the difference between success and failure.
To reach an appropriate level of agility, organizations need more mature, outside-in supply chain models. However, it’s a painful truth that very often even the internal supply chain organization is not optimally fueled with cost-to-serve insights. Ideally, these insights should then be complemented by a supply chain controlling function, which challenges the cost-to-serve estimations and explains the deviation between estimated supply chain costs and actual supply chain costs in a continuous feedback loop.