Making Supply Chain Make Sense to Customers
Supply chain covers many activities that touch every part of an organization. Today, 86 percent of companies with more than 10,000 employees report having a central supply chain organization with responsibility for key elements of procure-to-pay processes. Consolidating supply chain functions yields many benefits, but the challenge is gaining the benefits without the supply chain organization losing touch with its internal business unit customers.
Service delivery models that work best exhibit the following 10 design principles:
Figure 1: ScottMadden‘s Service Delivery Model Design Principles
Delivering supply chain through a shared services delivery model incorporates the best qualities from both a centralized service, that is efficient and standardized, and a decentralized service, that understands and stays focused on its customer (reference Figure 2 below). To be successful, the supply chain shared services organization must be closely aligned with its customers on expected performance, continuously improve, and benchmark to demonstrate competitiveness with the marketplace.
Figure 2: ScottMadden’s Shared Services Model
A critical hallmark of this model is a tiered structure for services, which aligns the service to the preferred method of delivery and aligns the work to the requisite skills. The result is a more efficient use of resources and better service. Although the segmentation of services by tier can vary with each company based on its strategy, organizational culture, etc., a typical structure leverages four tiers of service:
- Tier 0 is self-service and often utilizes portals or websites
- Tier 1 is basic transactional processing and customer service (e.g., fielding inquiries)
- Tier 2 is routine analysis and problem resolution for more complex issues
- Tier 3 is specialized and complex
How is your supply chain organization delivering services? Where are you today? Where do you want to be in three years?
Figure 3: How to Move toward Shared Services
Designing the best model is only part of the challenge—achieving the benefits requires the right talent, vision, and infrastructure. To learn more about ScottMadden’s service delivery model design approach, please contact us.
Additional Contributing Author: John Sequeira
Andy Flores Partner