Adaptable supply chain: from Just-in-time to Just-in-case

Adapt2Market Uncategorized

First up, some stark statistics. According to Mckinsey Global Institute study:

“Over the course of a decade, companies can expect disruptions to erase half a year’s worth of profits or more”

Citation: MGI study

Check the chart below how your much impact it makes on your industry.

Does this have to be this way? Not necessarily. Visionaries like Proctor & Gamble made significant efforts to make their core supply chain operations more adaptable by leveraging data-driven sensors of ecosystem, core mission centricity to be proactive than reactive and agile response-ability to change as events happen across its supply chain. One key element of data-driven adaptability is a digital control & response capability aka Supply Chain Control Tower. In their words, this is:

“powered by a lot of data infrastructure that we had to put in place to get near real-time data from the supply chain so that we know when an area is potentially affected,” 

Claudio Borger, program manager at P&G


What does this adaptive supply chain capability deliver in terms hard business benefits? See the example of IBM (which operates a $7b+ supply chain) (source: IBM case study

  • Shortened critical supply chain disruption management time from 18-21 days down to just hours.
  • Avoided any major supply assurance impacts.
  • Maintained greater than 95% of serviceability targets.
  • Reduce expedite costs by 52%.
  • Realized an 18% reduction in inventory levels.
  • Attributed a 1.5% reduction in working capital costs to inventory reductions.

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