Supply Chain Strategy Consulting
Creating a supply chain strategy is very similar to creating a business strategy. The difference in our supply chain consulting services is we start with an “operational” mindset and finish with a supply chain framework, built on optimization functionality.
Supply chain strategy is a plan based on facts. Facts include qualitative and quantitative data. However, a strategy is not always correct. Steve Jobs once said, “you never connect the dots going forward, you can only do that when looking backwards.” Business strategy tries to look forward but more than anything, it seeks to align the organization to a plan.
As a supply chain consulting firm, we follow a supply chain informed, four-step process for developing a strategy. Note the similarities and difference between how we approach supply chain strategy and how a management consulting firm approaches a generic business strategy.
- Baseline Analysis
- Strategy Map
- Key Supply Chain Decisions
- Implementation
Baseline Analysis
The baseline analysis step is the most rigorous step of the strategic planning process. In this step, we gather information to understand both internal and external factors that impact the business.
Analysis often performed:
- Define the problem statement:
- What are the current challenges or areas for improvement? What metrics would track improvement in these areas?
- Headline & Obituary
- Headline: what would be the headline if the company was written up in the Wall Street Journal for revolutionizing the industry? What does success look like?
- Obituary: what would the byline of the article be if the company failed and had to close as a result?
- SWOT Analysis
- We perform a detailed review of strengths, weaknesses, opportunities, and threats facing the business. Our aim is to determine how can we exploit our strengths and opportunities while mitigating our weaknesses and threats through supply chain management (SCM).
- Porters 5 Forces
- Porters 5 Forces provide insight into the competitive landscape which supports both business strategy and supply chain strategy development
- We review each force and consider them in our strategy development: threat of new entrants, supplier power, customer power, threat of substitution, and degree of competition
Strategy Map
Our consulting services often use the supply chain framework, Supply Chain Operations Reference (SCOR) model. This provides a simple basis for creating supply chain process optimization and view your supply chain on an end-to-end basis.
- Plan – Processes that balance demand and supply to develop a course of action that best meets requirements. When planning, sustainability, automation and global supply chain functionality often need to be considered. We use forecasting to understand customer demand and (if needed) plan for disruptions including shifting lead times. One well-known business tool that enables robust planning is Sales & Operations Planning (S&OP). A well functioning Sales & Operations Planning process integrates demand forecasting, financial forecasting and supply chain and operations capacity.
- Source – Sourcing processes that procure goods or services, and manage suppliers, to meet planned or actual demand (procurement / sourcing). Sourcing teams often need to support a global supply chain. In additions, stakeholders are requiring that companies have plans for sustainability in procurement operations and sourcing plans.
- Make – Processes that transform inputs to a finished good or service to meet planned or actual demand, and balance with procurement. Automation is a key consideration in the Make step of the supply chain framework.
- Store – Processes that manage inventory for use in manufacturing or to support downstream demand. Retailers, distributors and manufacturers in particular need to consider how their approach to Storage can help them deliver for their customers and aligns with their existing or future warehousing network.
- Deliver – Processes that provide finished goods and services to customers. This includes all modes of transportation including gig-economy delivery, drones, planes, trucks, rail, barges, and ships.
- Return – Processes associated with returning, or receiving returned products, for any reason. In today’s ecommerce driven economy, making it easy for your customers to return products is a critical strategic need for more than just retailers.
Our consulting firm’s Supply Chain Strategic Planning process is designed to gather facts and data and then build on the supply chain framework and pillars. We consider these six supply chain pillar categories in order to create a competitive advantage for our clients’ business.
A useful way to create a plan is to think hierarchically. Strategy supports the mission, so documenting the mission statement is the first step… if it does not already exist. This will be level 0 in the strategy map. The way to achieve the mission is documented in the Level 1 Purposes, which are the pillars of the supply chain strategy. The Level 1 Pillars enable the mission.
With the pillars defined, we can create detailed supply chain operations to enable the strategy. We continue to use the Strategy Map to hierarchically create these process definitions.
Key Supply Chain Decisions
Before we move to implementation, we need to review key supply chain decisions used in supply chain management. We want to ensure our supply chain strategy aligns to SCM best practices. Topics our supply chain consulting firm typically review vary widely. We consider strategic concerns including new product development, economies of scale, how we collaborate and invest in a trusting relationship with our suppliers, supply chain risks, and optimization technology that enhances supply chain management. We also integrate operational decisions into our strategy including inventory management, customer satisfaction and order fulfillment, operations planning, and other more real-time concerns.
One key domain of supply chain decisions is to understand how your existing strategy aligns with market demand. An effective supply chain is a competitive advantage. Do your business goals measure if your strategy is working throughout the product lifecycle.
Implementation
The organization must build processes and realign initiatives around the focal pillars. You cannot do everything at once, so we will prioritize two of the six pillars as having the largest gap of where you want to be and where you are with your current supply chain operation. All other plans must be set aside as the organization creates action items to achieve greatness for the focal supply chain pillars. Our first project with clients may be a demand forecasting project to support inventory-levels and other related decision-making, an analysis of suppliers for your key raw materials, or more broadly how supply chain design can help your company grow.
Supply Chain Consulting
It is important when choosing a Supply Chain Consulting Firm to understand their approach and your culture. At Supply Velocity, we have been providing Supply Chain consulting services for over 24 years. We use a blend of education with a focus on implementation. We don’t come in and develop your strategy and then hand it over. We work together to gather information and facilitate your team in developing the supply chain strategic plan.
More on Supply Chain Management
"*" indicates required fields
“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 improvement projects including: 1) building quality into our direct-labor productivity incentive program, 2) designing the layout of our garment warehouse, and 3) streamlining our route service process.We have integrated the methods that Supply Velocity taught us into our management and strategic planning. In the process our quality measurement has improved 22% from 2013 to 2015, we have reduced required annual labor by 2200 hours from the garment facility layout project and we’ve seen 50% decrease in error rate. Obviously the numbers speak for themselves, but just as important, Supply Velocity has been fun to work and have become true partners. They have “taught us how to fish” so our internal teams are able to implement change on their own, with the skills we learned from Supply Velocity. This relationship has been invaluable.”
“In 2015 we began working with Dr. Mitch Millstein to optimize our inventory locations supporting e-commerce and in-store inventory needs. From this work we developed a new omni-channel warehousing and inventory plan that entirely redefined our approach to warehousing, inventory management, store distribution and fulfillment. As a result of the analyses by Dr. Millstein we have begun the move to an improved omni-channel design by reassigning MSAs to new warehouses, greater leveraging of in-store inventories to satisfy e-commerce demands, and exploring acquisitions of new warehousing space in strategic locations. We have already seen an improvement of $300,000 from both more efficient shipping strategies due to better inventory management.”
“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 more about our customers, our products, and were able to create a solid plan to increase sales of our most profitable products. Within months of implementation, our booked sales jumped 60% and our most valued customers were getting direct, active, and calculable attention.”
“In thirty years of hiring consultants, Supply Velocity, Inc. was the first to tell me what they were going to do, set a price they stuck to and substantially exceed my expectations. I have recommended them to friends and acquaintances. They were true partners in assisting with the turnaround of an acquisition we had been struggling with for two years.Their math-based technology, solid down-to-earth facilitation skills, and positive, patient and enthusiastic attitude combined to make our implementation of Lean a very rewarding experience.
We increased our production by 50% in the first month of implementation and continue to see improvements. Improvements have not only been realized in productivity, but also in quality and morale. We have increased profitability by $2M on flat sales of $10M.
Based on Supply Velocity, Inc.’s integrity and our results, I will continue to refer them to others and utilize them in the future as we expand our company through acquisitions.”
“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 leaders.”
“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, which can be challenging in a 182 year old organization.”
“Mitch Millstein and his team helped guide our shop fabrication division in the re-layout of our custom pipe and steel fabrication facility when we moved into a new building. It is not only the results but how he helped. We were involved in every step. I personally did time studies and was able to see the non-value added steps required to manufacture in our old layout. When we created our new layout, everyone was involved, from the executive team to our direct labor force. With Mitch’s help we increased our throughput by a 3x multiple, while providing more competitive prices to our clients as a result of the efficiency improvements.This has enabled us to not only make more money but also to expand our commercial reach and serve more, and larger customers. I would recommend Supply Velocity to any company that wants to make improvement in supply chain and operations.”
“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, facilitating and teaching.”
“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 workflow balancing and visual management tools, dramatic improvements were achieved. The entire converting operation was rearranged based on Lean principles. The result is a 20.6% productivity improvement, enabling us to operate with 23 fewer people in production.”
“I am thrilled to provide this testimonial for Supply Velocity and their outstanding work in implementing Lean Warehouses and processes at Crescent Parts & Equipment through the COVID pandemic. With their data-first focus and Mitch’s exceptional coaching and experience, they transformed our business into a more supply chain-oriented organization, enabling us to grow while prioritizing employee safety and creating a better work environment. Supply Velocity’s expertise in Lean methodologies and their comprehensive evaluation of our customers have been instrumental in optimizing our operations and increasing customer satisfaction. We highly recommend Supply Velocity to any company seeking to implement Lean processes and enhance their supply chain efficiency.”
“Supply Velocity has provided the technical expertise and political capital to move our project forward. They have just the right amount of push and the right amount of support. Supply Velocity has helped us make real changes to improve efficiencies in logistics without jeopardizing our performance. We’re happy and our customers are happy.”
“For several years we have worked with Supply Velocity to support us with their expertise on Lean Operations and Supply Chain Management. Supply Velocity has helped us implement Lean, improve our inventory systems, and educate our people. They are professionals who are always available to help us as needed.”
“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 tools and our future sales growth as objectives.”
“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 help us streamline a very complex and disjointed sales order process. Just as importantly, our team now has the knowledge and process competencies to address other business improvement opportunities going forward.”
“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 down over 50%. We are using his strategies to create greater Client loyalty.”
“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, allowing them to spend more time with Customers and increase the value we add. Gross profit margins are up 40%!We are now using Supply Velocity to help us rethink our entire Strategic Plan.”
“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 and objectively, and to create a control plan to manage all of the tasks that were the outcome of the data study.The project turned out to be very significant to the company and most importantly, our customers. We reduced our customer wait times by 40%, and cut in half the labor cost to fulfill customer orders.
Some results are not able to be measured. However, as a result of this project, we have started to build a Lean mindset and culture, which is part of our strategic mission to save our customers money. Supply Velocity has been a valued partner in this mission.”
“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 desire to prioritize the most critical projects, we hired Supply Velocity to teach us the skills of Lean Six Sigma.Participants included the Promotions, Market Research and Agency Licensing sections of the Marketing Department.
We learned valuable tools to help us to prioritize based on the voice of the customer.
I firmly believe these skills made a difference in how we work every day. We are moving new projects forward, eliminating or changing ineffective processes, and we are a much stronger department. We continue to use the tools to help us with our highly-complex and time-consuming projects. Supply Velocity helped us to accomplish our goals.”
“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 mapping and visual management tools to make dramatic improvements in operations. Most importantly, two years later C&R is sustaining and improving on the implementation. C&R’s return on investment was 11:1. C&R had a record year last year in both sales and profits and would not have been able to pull it off without the changes Supply Velocity, Inc. helped us make.”
“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 increased inventory turns 3 to 8 times per year. All these results are in just 6 months. Our return of investment is very high.”
“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. We expect significant increases in sales and productivity from reducing poor performing SKUs.”
“Myerson engaged Supply Velocity, specifically Ray Davis to visit our plant in Trinidad to conduct a two day assessment of our production procedures and provide us feedback on areas for improvement and where applicable, areas for future analysis.Put simply, we got everything we paid for and in addition to more in depth analysis, we got specific tasks that were immediately actionable. Our local management team found Ray to be engaging, highly credible and insightful based on his wide experience. In other words the cultural differences and lack of specific industry knowledge weren’t impediments to things we could implement immediately and on our own. In a nutshell it was money well spent and will pay itself back many times over.”
“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 warehousing and restructure and enhance our maintenance department. Supply Velocity, Inc.’s process was methodical, flexible, staff-oriented, inclusive and, above all, trackable.In the last six months, our Chapter has realized expense savings of over $380,000 annually, and significant improvement in intra-company service levels has been attained. Supply Velocity, Inc. will return to the Chapter periodically throughout the next 18 months to audit our newly implemented processes. We have been pleased with our results and Supply Velocity, Inc.’s professionalism.”
“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 organization that would maximize our product development process (PDP). In four weeks, Supply Velocity helped us envision a new PDP structure, develop measures and accountability for each step, and gain consensus within the organization. Supply Velocity’s focus on speed and accountability helped us complete a critical project in a timely fashion.”
“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 considerable undertaking on the part of Supply Velocity. Outstanding!!”
“Your process encourages this group to work together, better communicate and have fun doing it.”
“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 we moved from classroom to actual project initiation. We were able to jump in, start using the tools and see a difference right away.
The get-into-action approach was good for our culture.”