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Finding the Sweet Spot: The Risks of Moving Slow or Fast in Business Transformation
Global supply chain blogs
Vivek Sood: Sydney based managing director of Global Supply Chain Group, a strategy consultancy specializing in supply chains. More information on Vivek is available on www.linkedin.com/in/vivek and more information on Global Supply Chain Group is available www.globalscgroup.com
Vivek is the Managing Director of Global Supply Chain Group, a boutique strategy consulting firm specialising in Supply Chain Strategies, and headquartered in Sydney, Australia . He has over 24 years of experience in strategic transformations and operational excellence within global supply chains. Prior to co-founding Global Supply Chain Group in January 2000, Vivek was a management consultant with top-tier strategy consulting firm Booz Allen & Hamilton.
Vivek provides strategic operations and supply chain advice to boards and senior management of global corporations, private equity groups and other stakeholders in a range of industries including FMCG, food, shipping, logistics, manufacturing, chemicals, mining, agribusiness, construction materials, explosives, airlines and electricity utilities.
Vivek has served world-wide corporations in nearly 500 small and large projects on all continents with a variety of clients in many different industries. Most of projects have involved diagnostic, conceptualisation and transformation of supply chains – releasing significant amount of value for the business. His project work in supply chain management has added cumulative value in excess of $500M incorporating projects in major supply chain infrastructure investment decisions, profitable growth driven by global supply chain realignment, supply chain systems, negotiations and all other aspects of global supply chains.
Vivek has written a number of path breaking articles and commentaries that are published in several respected journals and magazines. Vivek has spoken at several supply chain conference, forums and workshops in various parts of the world. He has also conducted several strategic workshops on various aspects of supply chain management. He received his MBA with Distinction from the Australian Graduate School of Management in 1996 and prior to these studies spent 11 years in the Merchant Navy, rising from a Cadet to Master Mariner.
Supply chain transformation is an important project for businesses looking to improve their operations and stay competitive in marketplace. Companies have two options when it comes to implementing a supply chain transformation: they can take things slow and steady, or they can move quickly to achieve rapid results. However, both approaches come with risks, and it’s essential to strike the right balance. Companies that take too long to transform their supply chains can fall behind their competitors, while those that rush the process can suffer financial losses or even bankruptcy.
In this blog, we’ll explore the importance of managing the pace of supply chaintransformation and highlight some examples of companies that have faced the consequences of moving too fast or too slow.
Striking the right balance – slow V/s fast transformation
Companies need to continuously evaluate and optimize their supply chain management to remain competitive. This process can involve incremental changes or a complete transformation of the supply chain model. Both approaches come with their own set of challenges and risks. Companies have two options when it comes to transforming their supply chain: they can take a gradual approach or a deliberate one. The gradual approach involves making changes to the supply chain one step at a time over several years. This approach allows companies to test and fine-tune each change before moving on to the next one, reducing the risk of major failures. The process can be slow and may not yield the desired results quickly enough.Despite the potential benefits of a deliberate approach, companies must be careful not to move too quickly. Rapid changes can disrupt their existing supply chain operations, leading to unexpected delays, cost overruns, and other issues. Moreover, companies that have failed to manage their pace of supply chain transformation have experienced catastrophic consequences such as bankruptcy or massive losses.
On the other hand, companies can choose to deliberately transform their supply chain to achieve faster results with less risk. This approach involves making large-scale changes to the supply chain in a shorter timeframe. While it can yield significantly greater benefits, it can also be risky if not managed properly. Rapid changes can lead to major disruptions within the company like – employee resistance, and other unforeseen challenges. For example, employees may resist changes that require them to learn new processes or technologies, leading to delays or reduced productivity. The organization may also struggle to integrate new systems and processes with existing ones, leading to inefficiencies or even failures in the supply chain.
Effective communication and collaboration are also essential. Leaders must work closely with employees and other stakeholders to ensure timely buy ins and alignment. Employees must be trained and supported throughout the transformation process, and concerns must be addressed promptly. The organization must continuously monitor and adjust its approach to ensure that it remains on track and achieves its goals. Companies must carefully plan and manage their supply chain transformations, taking into account the unique challenges and requirements of their business.
They must also choose the right software and implementation partners to ensure that the changes are properly integrated into their existing systems and processes. Additionally, companies must continually monitor and optimize their supply chain performance to ensure that they are achieving their objectives
One example of a company that was slow in its business transformation is Kodak. For many years, Kodak was a dominant player in the photography industry, but the rise of digital cameras and smartphones disrupted the industry and left Kodak struggling to keep up.
Despite seeing the shift towards digital photography in the 1990s, Kodak was slow to adapt its business model. The company continued to focus on film and traditional printing technologies, failing to recognize the potential of digital photography. As a result, Kodak missed out on opportunities to invest in digital technology, and competitors like Canon and Nikon were able to capture market share in the digital camera market. By the time Kodak attempted to pivot towards digital, it was already too late. The company’s lack of innovation and slow response to changing industry trends led to declining sales and eventually bankruptcy in 2012. While Kodak did eventually transition to digital photography, it was a case of too little too late, and the company never fully recovered from its slow transformation.
In the early 2000s, Blockbuster was the dominant player in the video rental industry with over 9,000 stores worldwide. However, with the rise of streaming services and digital media, the company’s traditional brick-and-mortar business model became outdated.
In response, Blockbuster attempted to rapidly transform its business by launching a digital division and partnering with cable providers to offer on-demand movie rentals. However, these efforts were not successful, and the company was slow to adapt to the rapidly changing market. By the time Blockbuster finally launched its own streaming service in 2013, it was too late, and the company filed for bankruptcy later that same year.
This example shows that even though rapid transformation can yield significant benefits, it can also be risky if not managed properly. Companies must carefully assess the risks and benefits of a transformation strategy and have a solid plan in place to mitigate any potential challenges
Transforming the supply chain is a critical aspect of remaining competitive in today’s rapidly evolving business landscape. Whether companies choose to take a gradual or deliberate approach to transformation, they must be aware of the associated risks and challenges. Companies that move too slowly may miss out on significant opportunities, while those that move too quickly may risk disruption and failure.
Effective communication and collaboration, along with careful planning and management, are essential for successful supply chain transformation. By taking the time to evaluate and optimize their supply chain operations, companies can reduce costs, improve efficiency, and enhance customer satisfaction. By continually monitoring and adjusting their approach, they can remain agile and responsive to changing market conditions. Ultimately, the key to successful supply chain transformation is to balance the pace of change with the need for stability and continuity.
The global supply chain of products is an immense and complex system. It involves the movement of goods from the point of origin to the point of consumption, with intermediate steps that involve resources, materials and services to transport them. A supply chain encompasses activities such as purchasing, production, distribution and marketing in order to satisfy customer demands. Companies rely on a well-managed supply chain to meet their business goals by providing quality products and services at competitive prices.
Efficiently managing a global supply chain requires considerable effort, particularly when dealing with multiple suppliers located around the world. Complex logistics tracking systems are needed to monitor product movements from one place to another. Technologies such as artificial intelligence (AI) can help companies keep track of shipments across different locations for greater visibility into their processes.
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