Why Supply Chain Models Have To Change For The Better

The Story Of Supply Chain Models In his book The 5-STAR Business Network (http://bit.ly/5-STARBN), Vivek Sood exposes the results of his researches on the organizational structure of companies. Companies used to follow the model of a traditional organization structure as in the following figure: However, the global business world has changed and this structure is no longer
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The Story Of Supply Chain Models

In his book The 5-STAR Business Network (http://bit.ly/5-STARBN), Vivek Sood exposes the results of his researches on the organizational structure of companies. Companies used to follow the model of a traditional organization structure as in the following figure:

However, the global business world has changed and this structure is no longer adapted to current businesses.

Companies focus on customer’s needs, but their supply network cannot provide the expected results because of this organizational structure. In effect, the problem about this structure is its rigidity.

Relations between these people and departments within the company are not flexible enough, which limits the results. Rigidity is responsible for the limited effectiveness of the organization.

The Shocking Revelation of Supply Chain Models.

In fact, the supply network should be more flexible, which will help the organization to be more customer centric. The traditional structure shown above is so rigid that it stifles customer responsiveness and innovation.

The main change that has made this organizational structure inefficient in today’s business world is outsourcing. In effect, today’s globalized world involves outsourcing and bigger supply networks than before.

This is what makes this rigid structure unadapted to current business realities. Strict hierarchy and silo mentality of the different departments prevent companies from achieving their objectives.

The Biggest Contribution Of Supply Chain Models To Humanity.

In fact, CEOs and executives think their globalized supply network will enable them to achieve very good results and respond to customer’s needs very quickly and effectively.

However, this cannot happen because of rigidity that is still present in their business, but they do not realize it. That is the reason why those who understand that are leaders in their markets.

This is how Apple became leader, outstripping Sony, Samsung, Nokia, and Dell.

To be better than your competitors, you must first have a look at your organization structure.

Is it rigid or flexible enough to be able to benefit from great supply opportunities thanks to your globalized supply network?

Can you act faster and more effectively than your competitors in the global market? Does your organization structure enable that?

If the answer to these questions is “no”, then you have to reconsider your structure first, before implementing any project. In fact, your business structure is the basis for all your decisions and strategies.

Simple Guidance For You In Supply Chain Models.

That is the reason why this is the first step in your evolution towards success.

Nowadays, supply chains are built across multiple countries and continents, and you cannot take the risk to keep a traditional structure. It is not adapted to the new SC models.

Although you are still selling a product to a customer, the process is very different from former businesses in the old business world.

New SC models involve new organizational structures. In the new organizational structure, the customer-centric model is based on customer’s needs obviously, which involve the sales team as a key player.

In fact, the sales team would be the basis for new organizational structures because they are the first people your organization needs to be able to create a satisfying product for your customers.

Then, Research & Development and Marketing are also two key functions of the modern structure. Finally, the supply chain, including procurement, production and logistics, represents the support base of the organization.

Consequently, the most important point to underline in this article is the importance of flexibility in new organization structures.

In fact, your supply network cannot provide the maximum results if you keep a traditional structure. They do not get along together.

New supply chain models imply new structures, and these modern structures involve flexibility in hierarchies and collaboration between the departments within the organisation.

For more information checkout our website https://globalscgroup.com/

Business Models, Supply Chain Models

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.

More information on Vivek is available on www.linkedin.com/in/vivek  and more information on Global Supply Chain Group is available on www.globalscgroup.com

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