Supply chain Reengineering
Supply chain Reengineering
Introduction to supply chain Reengineering
Supply chain re-engineering is about analysing the existing configuration of a supply chain, planning improvements to that configuration and then putting these improvements into practice. One of the main tasks is to evaluate cost efficiency to ensure that costs are being driven down through the contract duration
Definition of Supply chain Reengineering
Supply chain reengineering is the combination of analysis, planning and implementation
Supply Chain Re-engineering – System Approach
There is a logical and systematic way of addressing the task of supply chain re-engineering. This logical and systematic approach is referred to as the systems approach. It is called system approach because, It is an organised process characterised by orderliness. Secondly, re-engineering task should be done in a systematic manner with dedicated resources and with proper attention to detail.
Elements of the System Approach
The systems approach to analysing supply chains and improving their performance has been developed based on the experiences of a range of companies in a range of different business sectors. There are four distinct constituent elements of the systems approach and are customer service, Methodology, guidelines on good practise and tools and techniques.
Understanding Customer Service
Customer service ‘sets the spec’ for supply chain design. Understanding customer service requirements in targeted market segments forms the basis for any effective supply chain re-engineering and change process. As shown bellow a market-driven customer service strategy provides the performance specification for integrated SCM.
The systems approach to analysing supply chains and improving their performance involves the application of logical, structured methods rather than relying on making limited improvements in particular areas of the system. The methodology provides guidance on how to address this process in an organised manner, proceeding in logical stages to develop a solution.
Guidelines on Good Practice
Every supply chain is unique. It has unique products, processes, people and a lot more besides. Hence, there is no universal solution which can be applied which will automatically result in a supply chain achieving its optimum competitive potential. The methodology helps to identify the most suitable solution for a particular supply chain but there are approaches which appear to exist in the majority of world-class companies.
Tools and Techniques
A potential problem when analysing supply chain organisation and operations is that there are few established analytical tools which can be employed. The lack of such tools can result in practitioners failing to apply a methodical, scientific approach and instead relying purely on experience, intuition and iteration. Tools used for financial planning analysis, SWOT analysis etc can be effectively applied in supply chain as well.