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:
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.