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THE OPPORTUNITY

Successful business transformations are difficult, yet rewarding

Four type of CHAINS hold back businesses from successful transformations - external, structural, procedural and executional. Most people can focus only on one or two of these, and as a result, miss out on big gains.

BEHIND EVERY THREAT IS AN OPPORTUNITY

Team building is not enough anymore

20 years ago teambuilding exercises would be enough to release positive emotional change. Today, information hoarding and corporate politics are rife.

Systems and process excellence are not enough

15 years ago ERP and other similar systems were quite the rage. These were enough to show the flaws in process and enable basic planning and control.

Agility is increasingly driven by information

Modern corporations collect pertinent information at each node along their vast network. This rich data can be used to optimise demand, supply, inventory, costs and service levels to create the best profit results.

Modern businesses are evolving into B2B Networks also known as Supply Chain Management 3.0

Top businesses now extend beyond the boundaries of a single company into suppliers’ and customers’ companies to achieve loose/tight integration.

REWARDS FOR SUCCESSFUL BUSINESS TRANSFORMATION ARE VERY HIGH; PENALTIES FOR FAILURE ARE ONEROUS TOO

In the modern globalised era, even very well established companies face sudden crisis and disruption. The hard reality is: Transformation winners take away the biggest prize, leaving crumbs for the rest.

TAKE THE WINNERS’ ROUTE TO BUSINESS TRANSFORMATION

Modern supply chain management (SCM) takes the companies through three big transformations. Dr Wolfgang Partsch (our senior partner based in Munich, Germany) co-invented SCM in early 1980s to knit together operational groups in a Swiss-German company.

Since then SCM has been used to integrate rest of the departments, and even outside companies – suppliers and customers – tighter and tighter into one cohesive unit, reaping huge profits for the winners.

MARGINS FOR THREE GENERATIONS OF SUPPLY CHAINS

Supply Chain 3.0 creates average margin of 16.7% for winner, which is five times that of SCM laggards

Supply Chain 2.0 (transitioning businesses) earns average margin of 8.3%, which is barely HALF of the SCM winners

Supply Chain laggards barely make profit unless they have some other advantage.

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