Watch: Having it all: How supply chains can deliver ‘value-added’ contributions

Modern supply chains must create value on multiple fronts. Michael Dominy, Vice President Analyst at Gartner, explains how they can truly “have it all.”

In uncertain times, it is especially important that companies operate their supply chains from the perspective of “added value”. For Dominy, this means that supply chains must not only deliver costs, but above all sustainability and productivity.

“They have to do everything,” says Dominy, even as top supply chain managers struggle with pressures and often competing goals from senior management, the board, customers and other stakeholders.

Dominy says companies today need to build a supply chain business case that shows contributions from measures such as process digitization and compliance with sustainability requirements. He cites the example of a large beverage manufacturer that went beyond just achieving efficiency on the production line – it implemented Internet of Things (IoT) technology to monitor parts and finished products, as well as advanced analytics to reduce production downtime. In the process, it was able to reduce energy consumption and increase both productivity and quality.

Someone in the organization needs to oversee all the elements that add value to a supply chain. According to Dominy, that person could be the chief supply chain officer, although he or she also needs to work with the board and the rest of the senior leadership team to assess how risk-tolerant the organization is. Achieving “antifragility” to disruption could mean taking on more risk up front, in the form of additional inventory or suppliers in multiple regions.

According to Dominy, three main factors determine whether a supply chain stays on top of its game. First, the design of the physical network; second, the decision about where certain products are manufactured; and third, the skills and talents of everyone in the organization.

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