Resilient Supply Chains are now a Competitive Advantage

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Resilient Supply Chains are now a Competitive Advantage

We just got through the biggest health and supply chain disruption since WW2. As we move through the pandemic, the global Supply Chain is struggling to recover. Companies are challenged with limited raw material availability, extended lead times and transportation delays. Their competitors, that have been able to keep or get product in stock, are capturing market share.

Since approximately 1990, with the advent of the Lean / Toyota Production System, and when supply chain management became a “thing”, supply chains have gotten leaner. However, they have potentially became less resilient. Having a Lean Supply Chain was required to drive down costs and complete for customer demand. However, now resilient supply chains are the competitive advantage. Low cost is less important than meeting the customer demand.

A big shift is about to happen which will change the physical structure of supply chains including more capacity, warehouses and inventory.

A summary of basic supply chain designs can help you design the right supply chain for both your market and potential disruptions.

Lean

Focus: Asset efficiency

Measures: inventory turnover, equipment utilization

Toyota advocated reducing waste, including any excess inventory. Manufacturers operate with less purchased components/materials and work-in-process to drive cash-flow efficiency. While beneficial for costs, these supply chains are most susceptible to disruption.

Fast
Focus: Fast delivery to customers

Measures: Fill rate, Delivery days, Leadtime

The fast supply chain puts the focus on getting product in the hands of the customer. We can all thank Amazon for reimagining the supply chain for ecommerce. If Toyota thinks surplus is non-value-added, Amazon thinks a customer not buying a product because they would have to wait too long is non-value-added. These supply chains are inherently resilient but have more inventory and are more asset-intensive during times of low disruptions. Amazon lost money on its key distribution business for many years to build up a fast supply chain network.

Reliable
Focus: Meet customer expectations

Measures: On-time in-full (OTIF), Quality

Reliable supply chains are not the fastest or lowest cost but seek to meet customer expectations. If they quote a 1 week leadtime, customers have learned that they will get everything they need in 1 week and that it will work. There has been less focus on these attributes as all supply chains have gotten more reliable… at least before the pandemic. Now, this capability is in demand.

Agile
Focus: React to market changes

Measures: Capacity-flexibility, New product development cycle time, % of sales from products introduced in last 3 years

Agile supply chains can spot trends and adjust. They will use their supply chain partners, such as contract manufacturers and third-party logistics (3PL) providers to increase or decrease their fulfillment capability. They invest in new product development and development of their supply chain partners. Apple would typify this supply chain. They down own most of their supply chain but they exert incredible control. This type of supply chain is more expensive during times of steady demand but can react quickly if demand increases or decreases without having high fixed costs. These supply chain are inherently more resilient to supply chain disruptions because of their investments in their supply chain’s capabilities.

We do not know what will happen in the future, but we have seen the power of resilient supply chains and the challenges faced by lean organizations. Organizations that were hit the hardest the supply chain disruptions are focusing more on managing their supply chain risk.

Client Voice

What Clients Say

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"If you are looking for someone to help drive improvements, create repeatable processes and mentor younger staff in your facility then reach out to Supply Velocity. Your expertise and dedication have driven significant im..."

Tim Donohoe

COO, Chemline

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Josh Cole

Director of Supply Chain, Crescent Parts & Equipment

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Lorenza Pasetti

CEO, Volpi Foods

"Supply Velocity is driving instrumental change in our inventory management processes. This is critical for us to be competitive in a supply chain environment with numerous disruptions. They are making change happen, whic..."

Jim Carroll

Executive Vice President Operations, Schaeffer Manufacturing

"In a time of volatile supply chain disruption, Supply Velocity is helping us develop Demand and Supply Planning processes to proactively tackle these new challenges. They are genuine partners, working with our team, faci..."

Jane Thrasher

Vice President of Supply Chain, Horizon Hobby

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Geoff Gross

President, Gross Mechanical

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Rob Bowers

Vice President of Strategy, Total Hockey

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Lee Hartwell CPA

Plant Manager, Myerson Tooth

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David Walters

President, Hy-C

"Our experience with Supply Velocity was one of the best values we have ever had from a consulting project. Cyril Narishkin brought a structured lean methodology, invaluable experience and engaging facilitation skills to..."

Mike Howard

CEO, Aspeq

"Supply Velocity has helped Clean succeed in a number of ways. First, they provided the education that kicked off our Lean Process Improvement journey. They also facilitated a number of large supply chain and process impr..."

Jeff Lazaroff

Senior Vice President, Clean Uniform

"We engaged with Supply Velocity to help us embed process improvement at all levels of the business. Our team learned from Mitch to let the data drive decisions, to use Lean tools to help us see our processes critically a..."

Dionne Dumitru

COO, Weekends Only

"Supply Velocity gave us the tools to analyze our business and processes based on the facts and numbers versus our perceptions. Our common quote was "Let the numbers lead us". The key for our organization was how quickly..."

Ned Lane

President, CeeKay Supply

"We used Supply Velocity to rethink our sales process. By analyzing the entire process we found wasted time in our Sales, Admin and Operations departments. Streamlining this process created extra time for each Sales Rep,..."

Jeff Reitz

Vice President, Central States Bus

"Supply Velocity created visibility within our Assurance Services Group... visibility of performance, Client-service, employee satisfaction and processing time. Using the Supply Velocity System, Audit Report Cycle time is..."

Fred Kostecki

Partner-In-Charge, Assurance Services, Rubin Brown

"Supply Velocity's Lean Six Sigma System has given us new tools to help improve our sales performance. We have learned new ways to analyze our business which makes problem solving more accurate and has made us better lead..."

Rachel Andreasson

Executive Vice President - Marketing, Wallis Companies

"The role of the Erie Insurance Marketing Department has been evolving over the past several years - from a support role to a more critical role of driving growth in our organization. Because of our increased workload and..."

Karen Rugare

Director of Marketing, Erie Insurance

"Isolating a problem, finding short, and long term solutions with measurable results is what was promised and results is what was delivered by Supply Velocity. Upon launch of the Lean Six Sigma Selling System, we knew mor..."

Mark A. Presker

General Manager, Architectural Millwork of St. Louis

"In the spring of 2003, the St. Louis Area Chapter of the American Red Cross engaged Supply Velocity, Inc. to perform a study and make recommendations to streamline office processes, maximize cash flow in purchasing and w..."

Joe White

CEO, American Red Cross - Saint Louis Chapter

"We are using Supply Velocity's Lean Six Sigma methods to analyze a variety of processes including rationalizing SKUs (stock-keeping-units). By using math to evaluate SKUs we took some of the emotion out of our decisions...."

Mark Kelso

Director of Process Improvement, Save-A-Lot

"Anheuser-Busch Precision Printing had been implementing Lean Operations on our own for the past two years. We needed to move faster and partnered with Supply Velocity, Inc. Through Supply Velocity, Inc.'s mathematical wo..."

Rich Lavosky

General Manager, Anheuser-Busch Precision Printing

"C&R was struggling with labor productivity. The construction crews were often missing materials that they needed to do their work. This caused significant idle time. Supply Velocity, Inc. and C&R used value stream mappin..."

Tom Kuthe

V.P. Construction Operations, C&R Mechanical

"Your process encourages this group to work together, better communicate and have fun doing it."

George Edinger

President, C&R Mechanical

"Closure Medical recently completed a major reorganization in order to enhance our ability to rapidly create innovative medical devices. We hired Supply Velocity to help us map out the process and service flows of the new..."

Gabe Szabo

Vice President, Product Development, Closure Medical - A Division of Johnson & Johnson

"We are pleased that Essex selected Supply Velocity, Inc. as our Lean Implementation Partner. At one facility, we have saved over $350,000 in work-in-process inventory, reduced throughput time from 2 weeks to minutes and..."

Terry Etter

Vice President of Operations, Essex Medical Systems

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Bill Gilbert

President, Fusion Coatings

"Many thanks to all three Supply Velocity presenters. I think you guys took a very difficult time for learning and capitalized on everyone's time and training needs. I truly hope this helps your business as this was a con..."

Mark Holdinghausen

VP of Operations, DEMA Engineering

"We used Supply Velocity on our Warehouse optimization project. One of the key characteristics of Supply Velocity is that they listened to our requirements and provided a clear path for our Warehouse processes using lean..."

Haris Tokalic

President, Grand Rock, Inc.