How even the largest manufacturers are learning to create agile operations
25 October 2021 // The old business thinking was that there are “battleship” companies and “speed boats.” Battleships were those enterprises that dominated an industry through force of size and power but weren’t very adept at change. Speed boats were the disruptive innovators that could out-maneuver the bigger competitors but often ended up being acquired as markets matured.
Now, it turns out that some of the biggest battleships are learning how to make speed boat turns in their post-pandemic supply chains according to a recent Wall Street Journal article, which spotlighted initiatives by Procter & Gamble, IKEA, Alberstons and others (subscription required for access).
“From furniture makers to grocers, the world’s biggest companies are using their deep pockets, sprawling global operations and commanding market share to insulate themselves from the global supply-chain meltdown,” the story reported. To be sure, some of the moves described are old-school battle tactics: Forcing consumers to accept alternative products, raising prices and. squeezing suppliers, to name just a few.
What’s interesting, though, is some of the new approaches that in some cases are made possible with scale. “The big companies have gotten the message that they need to be agile as well as big,” said Michael Zimmermann, a partner at the consulting firm Kearney. “They are able to commit $10 million to book three ships, or they can book an entire plastics plant, or mobilize a team of engineers to solve new problems very quickly.
Having resources at hand is always nice, but the story reports that some, like Procter & Gamble, are also benefiting from investments in streamlining operations and creating more flexible and visible supply chains.
At Morgan, we have long helped global-enterprise clients (including 2 of Gartner’s 2021 “Supply Chain Top 10” manufacturers) custom tailor their transportation, multi-party supply chain operations and data. But even if chartering ships the way P&G does isn’t an option, here are some strategies to steer your own Mighty Mo’ a little more like a Chris-Craft:
- Find smarter ways to digitize your own operations, and those of key suppliers. As the supply chain visibility market has developed, vendors have rolled out many software platforms and hardware devices. The biggest current obstacle, however, is the difficulty and expense of implementation. We created ChronosCloud to be the ultimate speed boat implementation across your critical supply base, though it also steams along in formation nicely with the battleship platforms. It’s also the only digitization solution that aligns your operations and finance teams, for synchronized processes from pickup to payment.
- Remember that data is not information. In our practice, it’s common for clients to have massive, detailed spreadsheets and databases—and no idea what it all means. Data isn’t actionable if you can’t normalize it across systems and suppliers and transform it into actionable information.
- Custom-tailor your transportation network. Leverage the best of existing routes and supplement it where applicable with custom and dedicated infrastructure, such as we design for our customers. A solution that’s created for your exact needs can hedge against capacity and pricing changes, while also providing better control, reliability and flexibility.
- Rethink inventory management so that you can take better advantage of strategic sourcing opportunities and reduce inventory on your balance sheet. When you’re no longer worried about the cost of owning inventory, you’re also able to make more efficient transportation and warehousing decisions. Morgan’s first-of-its-kind Inventory On Demand™ service offers completely outsourced ownership of goods, along with more traditional supply chain financing options.
Need help adapting your organizational battleship for the speedboat supply chain era? Let us know!
Heard On The Dock
“The big companies have gotten the message that they need to be agile as well as big.”
-- Michael Zimmerman, Partner and Americas Lead, Kearney
While You Were Shipping…
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