- A joint A.T. Kearney-CSCMP study
As India's economy grows and the operating environment evolves, it is critical to understand the macro trends that will shape future supply chain design.
With high infrastructure growth expected in India, the earthmoving and construction equipment (ECE) market is estimated to increase by 20 to 25 percent.
- Ivey Business Journal, March-April 2014
Getting fulfillment right is more mission-critical for a multichannel environment compared to a traditional brick-and-mortar setting.
- Supply Chain Management Review, March–April 2014
There are three key considerations organizations must keep in the forefront of their planning when implementing A.T. Kearney’s Advanced Tail Sourcing framework, these include skills, scoping, and change management.
Work with your suppliers to generate profitable, value-building growth.
Innovation is key to enabling future success. But development costs can quickly eat up the benefits of the growth in sales and profit generated. This is one reason why more companies are reshuffling their internal capabilities to rely on a cadre of well-chosen partners—especially suppliers—to pursue profitable, value-building growth.Close
- Supply Chain Management Review, January–February 2014
Companies that can accurately anticipate how trends will affect the various elements of their manufacturing strategy, such as the future need, location, and size of factories, can turn challenges into profitable opportunities.
View study abstract and request the full report.
The pharmaceutical industry can unlock $135 billion in value by learning from leading CPG firms.
The competitive landscape of the pharmaceutical industry is changing dramatically. Sales are slowing, innovation is losing its punch, and complexity is rising in markets and technologies. The old pharma paradigm of a pure focus on innovation and markets is changing; price, cost, and service are beginning to matter more. As a result, the economics of the industry are changing, and operations is becoming a differentiating factor in the competitive landscape. Leading Big Pharma companies understand the new rules of the game and have started investing heavily in improving capabilities and shifting paradigms in operations. They are seeking to be first in this race. Pharma companies that want to be on the winning end must follow suit.
Comparing pharma’s operations with that of the consumer goods industry shows significant opportunities for pharma to improve in all major operations areas, including service, inventory levels, efficiency, quality, and innovation speed. By taking a page from the operational practices of consumer goods firms, the pharmaceuticals industry can unlock billions of dollars in value. They can make a step change in performance without reinventing the wheel, while still continuing to support the pharma industry’s economics.
The value of this endeavor is enormous. Assuming an operational transformation that merely cuts the performance gap with the consumer goods industry by only half, a typical pharma company could increase its earnings margins by 7.5 percentage points and free up inventory worth roughly 11 percent of one year’s sales. A firm with about $24 billion in sales—the average sales for a top-20 company in 2012—could unlock roughly $1.8 billion in yearly earnings and $2.6 billion in cash from working capital reductions. Over the whole industry, this would equal $135 billion in additional cash.
There is no silver bullet that magically brings results. Reaching world-class performance in pharma requires a holistic transformation based around a four-pronged “battle plan”: operations strategy, planning and reporting, execution, and people management. Within each theme are the moves pharma executives can make to create an immediate impact on their results and build a growing, long-term advantage.Close
From the Industrial Revolution to the 1990s high-tech boom, manufacturing shifts with periodic waves of disruptive change.As the latest waves of change gather momentum, 21st-century manufacturers face decisions that could create opportunities or competitive challenges as significant as Eli Whitney’s idea of interchangeable parts or Toyota’s improvements on Henry Ford’s assembly line. Today, the potential impact of new technologies such as 3-D printing, the risks inherent in global supply chains, the exponential growth of data, and the changing socioeconomic demographics are just a few of the new disruptors.As a result, the future of manufacturing is again a hot topic in public debate and on boardroom agendas. Companies are looking for a unique competitive edge or ways to respond to the unexpected. Manufacturers that can accurately anticipate how these trends will affect their businesses can turn challenges into profitable opportunities.In this first in a series of papers on mastering disruptive change in manufacturing, and based on our work in six core areas and on insights gathered from our Global Excellence in Operations Factory of the Year competition, A.T. Kearney identifies the driving forces we expect to be among the most influential to manufacturers.Close
A.T. Kearney offers nine ways to interact with suppliers, identifying formulas that characterize true supplier relationship management.
We rely on suppliers for a wide range of products and services that allow us to succeed, yet we know surprisingly little about these relationships or how to fully harness them. Some believe these relationships are all about cutting costs. Others think they are the sum of every category management initiative ever tried. We have a different view. We believe that suppliers, and our relationships with them, are an area yet to be fully explored or exploited. At a recent A.T. Kearney Executive Roundtable, 50 chief procurement officers from major U.S. and global corporations conceded that managing suppliers effectively is one of their biggest challenges, and that they are not currently prepared to address it.
A team of A.T. Kearney partners is spearheading an initiative to fill this void. Called the True Supplier Relationship Management (TrueSRM) Project, and funded by leading high-tech players around the world, we have developed a comprehensive approach to managing supplier relationships—comprehensive because it works in all industries. This paper is about our initial findings, which will culminate in a book scheduled for release in 2014.Close
Five trends are reshaping this growing sector. The winning players will be those that anticipate the shifting landscape and adapt their supply chains accordingly.
Home delivery of large-format products—appliances, furniture, electronics—falls short of today's expectations. Isn’t it time to deliver all the goods?
The market for home delivery of large-format products such as appliances, furniture, and electronics is poised for growth but structural hurdles are blocking retailers and home delivery service (HDS) providers from capturing that growth. A nationwide HDS integrator could resolve these issues—while also unlocking sizable savings and improving customer service—but it hinges on the willingness of retailers, HDS providers, and investors to work together. Each side faces unique challenges: For retailers, these include disagreement on “role” in home delivery, near-term cost pressures, and no immediate HDS option; for HDS providers lack of size and density, operational issues, and investment muscle are the biggest hurdles.
Similar to UPS and FedEx in parcel delivery, an integrator would be a national service provider offering an end-to-end (line haul and last mile) network with leading capabilities and technology to sustain best-in-class performance. In addition to unlocking and passing on significant cost savings to retailers large HDS integrator networks would unlock breakthrough scale and density while reducing coordination complexity. The value created by integrating will increase the pie for both retailers and HDS companies.Close
- Supply Chain Management Review, July–August 2013
With a market poised for growth and retailers generally uncertain about the need to differentiate through home delivery, a nationwide home delivery service integrator could resolve these issues while also unlocking sizable saving and improving customer service.
What are the supply chain challenges in India and what is the best way to address them?
Greater and more intense competition and global value chains are leading to substantial shifts in what is expected of the supply chain function. It is no longer enough to simply connect supply and demand at optimal cost and service levels. Today’s business leaders are demanding more from their supply chains, including competitive advantage.
Coupled with India's unique operational challenges, such expectations make the role of a supply chain professional extremely complex. Yet there are examples of organizations across industries that have managed to move beyond the constraints in India to develop supply chains that lead to competitive advantage. How do they do it? What are the challenges, and how do they get beyond them? How do they define supply chain success?
To answer these questions, the Council of Supply Chain Management Professionals (CSCMP) in India and A.T. Kearney embarked on a first-of-its-kind joint study. Based on A.T. Kearney’s experience helping organizations in India and one-on-one conversations with C-level executives and senior-level supply chain professionals in the country, this paper highlights seven supply chain best practices—or themes—that successful organizations across India are using to gain competitive advantage.
Collaborate to integrate the value chain virtually. Collaboration can be at three levels: across functions, across the value chain, and beyond the value chain. For collaboration to work, it must be led by the dominant player, based on a win-win partnership with shared goals, and focused on the long term with clear markers for success.
Replace one-size-fits-all with a tailored approach. Organizations in India are more diverse than ever. So taking a one-size-fits-all supply chain approach does nothing more than compromise segment-specific needs.
Plan more frequently and across multiple horizons. Supply chain managers must be able to see the big picture while also focusing on the details. The key to doing both is in frequent and multi-horizon planning sessions: weekly reviews for short-term planning, and regular reviews for long-term planning.
Implement pull replenishment across the value chain. To deal with pressure on costs and services, leading supply chain organizations implement pull replenishment strategies across their entire value chains from customers to vendors.
Actively manage complexity. The best supply chain strategies integrate complexity management in all planning processes to prune that which is non-value added and capitalize on that which is value added.
Let business needs drive technology and automation choices. Technology and automation are integral to overcoming challenges in India. Leaders employ technology and automation thoughtfully and tailor it to their business needs.
Reconfigure the supply chain organization to include business management capabilities. The shift in supply chain expectations calls for a fundamental rethinking of the capabilities required of the supply chain. Today's organizations need to have a suite of business management skills in addition to their supply chain skills.Close
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