The Opportunity – Unchain Your Corporation
Successful business transformations are difficult, yet rewarding
Since Supply Chain Management was co-invented by one of our senior partners in Germany – Dr Wolfgang Partsch, it has helped integrate businesses. First on national level, then on regional level, and now on global level, as today’s businesses morph into global B2B networks, they need exceptional know-how, experience base and global mind-set for successful transformation.
TO SUCCEED – MODERN BUSINESS TRANSFORMATION MUST GO BEYOND THE OBVIOUS, AND THE BASICS
Team building is not enough any more, hard power is also needed to dispel complacency
20 years ago team-building exercises would be enough to release positive emotional change in the group. Today, hard reality of looming mortgage payments and job security hits the moment people are back in office, and they are back to information hoarding and office politics.
Systems, and process excellence are not enough, soft power is even more important
15 years ago ERP and other similar systems were quite the rage. These were enough to show the flaws in process and enable basic planning and control. Today flexibility and adaptability are more important.
Agile corporations are increasingly driven by information and collaboration
Modern corporations collect pertinent information at each node along their vast network. This rich data is methodically analysed to optimise demand, supply, inventory, costs and service levels to create the best profit results. Not many people know this art – while there might be many pretenders.
Modern businesses are evolving into B2B Networks also known as SCM 3.0 (Supply Chain Management 3.0)
Having knit the entire company’s operations, sales, finance, marketing, R & D into a single cohesive unit, now they extend beyond the boundaries of a single company into suppliers’ and customers’ companies to achieve loose/tight integration.
Rewards for successful business transformation are very high; Penalties for failure are onerous too
MARGINS FOR THREE GENERATIONS OF SUPPLY CHAINS
In the modern globalised era, even very well established companies face sudden crisis and disruption. The hard reality is: Transformation winners take away the biggest prize, leaving crumbs for the rest.
Modern supply chain management (SCM) takes the companies through three big transformations. Dr Wolfgang Partsch (our senior partner based in Munich, Germany) co-invented SCM in early 1980s to knit together operational groups in a Swiss-German company.
Since then SCM has been used to integrate rest of the departments, and even outside companies – suppliers and customers – tighter and tighter into one cohesive unit, reaping huge profits for the winners.
Supply Chain 3.0 creates average margin of 16.7% for winner, which is five times that of SCM laggards
The extra margin comes from SCM effectiveness, pricing power due to SCM segmentation, and using suppliers for collaborative innovation.
Supply Chain 2.0 (transitioning businesses) earns average margin of 8.3%, which is barely HALF of the SCM winners
There is high level of SCM efficiency, but the problem is that their margin is steadily transferring to SCM 3.0 winners in a systemic decline.
Supply Chain laggards barely make profit unless they have some other advantage.
At 3.3% they are struggling to break even despite high revenues.
The transformation journey incorporates collaboration using the cutting edge supply chain know-how, talent and resources – combining best of hard verifying systems and soft collaborative mind-set.
- The Opportunity
- Why “Unchain Your Corporation”?
- How to Think about Business Transformations?
- Recommendations for Unchain Your Corporation
- Authors’ Team
- How to Use “Unchain Your Corporation”