Plug-and-play supply chain
Agility, visibility and efficiency are all key concepts of any supply chain. With a huge number of organizations facing over 10 supply chains, according to a recent white paper released by DHL Supply Chain, how can they successfully execute
Last week, eft engaged DHL Supply Chain in a debate on plug and play supply chain exploring the ins and outs of one of the key strategies companies can deploy to achieve agility, visibility and efficiency at scale whilst retaining profitable growth.
The idea behind the plug-and-play supply chain is to standardize as much of your supply chain as possible (70-80% according to DHL’s whitepaper), using replicable bolt-ons when necessary to achieve goals. In essence, the objective is to create a series of replicable building blocks that are interchangeable no matter the supply chain. This type of model can be applicable to many types of supply chains, though Eric Johnson of American Shipper points out ‘Commodities, for one. Anything with predominantly repeatable sourcing and shipping patterns’ are particularly relevant.
So why plug-and-play? Cathy Roberson points out that ‘Over the past 17 years it seems we've gone from customizing solutions to standardizing them, back again etc.’ Dr. Steve Brady points out that ‘I have seen a disconnect with manufacturers AND retailers--not knowing their customers nor their vendors. And that leads to not knowing when and where to standardize, and when to "specialize".’
As with any strategy of this scale, some major steps are key to implementation. These include such key consideration including C-level buy-in, appropriate talent and accurate, reliable data. From the twitter debate, Richard Sharpe of Competitive Insights noted ‘The speed for implementation will be directly correlated to the executive sponsorship that supports the effort’ but also having ‘meaningful data that is trusted for segmentation insights and change management.’ So to answer Cathy’s questions above, the pace of business and advances in analytics have enabled a new type and level of standardization.
So how do you successfully implement your own plug-and-play strategy successfully? We’ll let DHL take it away: