Transforming Your Organization's Ability to Leverage a Holistic Supply Chain

Recent years have seen significant changes in consumer expectations for goods and services. Amazon and similar companies have developed and implemented an unprecedented order-to-delivery business model that has led to a shift in consumer demand. Add to this the strains that COVID-19 and other pressures, including geopolitical, operational, regulatory, financial, and security, on the global supply chain have caused, we now live in a world where the complexities and opportunities of consumers’ demands and the expectation that companies will be able to fulfill their needs at a moment’s notice can come into hard contact with the strains of real-world supply chain issues.

Consumers want more and faster—yet real-world circumstances can dictate the opposite. For companies to thrive, or even survive in today’s market, they must design and implement a holistic approach to supply chain management that focuses—delivering both simultaneously and across the enterprise—on resiliency, optimization, sustainability, and risk management.

What is a Holistic Supply Chain?

A holistic supply chain connects the various supply chain components, internal and external, to achieve seamless, end-to-end operations. Traditional supply chain concepts often look at the impact that the flow of goods and services, data, and finances have on a singular business. A holistic supply chain, by contrast, considers these same concepts through the lens of how that business impacts and is impacted by the world around it. This is achieved by focusing on the following priorities in concert with one another:

• Resiliency — Executing seamlessly while delivering improved results in the wake of unforeseen circumstances based on deep knowledge of your supply chain and the risks within it and being able to forecast and model events and their impacts and identifying and applying alternatives, such as different vendors or shipping routes.
• Optimization — Facilitating maximum efficiency and performance using technology, financing, operations, organizational culture, and more. This can require subject matter experts, software algorithms and coding, and other key elements to work through the risks and opportunities while also including more modest shifts such as changes to delivery schedules, warehousing locations, and the organizational mindset.
• Sustainability — Meeting and exceeding the business needs of the present without compromising the ability of future generations to meet their own needs. This can include topics such as climate, social justice, enhancing the welfare of the community, and delivering bottom-line results. It also includes expanding the components of shareholder value and assessing foundational programs, policies, and value propositions.
• Risk Management — Proactively protecting the organization from threats and vulnerabilities. Supply Chain Risk Management (SCRM) and its increasingly important cyber component—C-SCRM—are of rising criticality in a world where semiconductors, software, open-source code, counterfeit goods, provenance of materials, components, inputs, and much more all come to us through an additive production chain that includes some level of risk at nearly every stage.

In an ongoing example that involves SCRM, regulators and others are investigating AOG Technics, a UK-based broker founded in 2015. According to CFM International,¹ AOG Technics allegedly sold counterfeit aircraft engine parts and other parts of unknown origin to major airlines (including American, Delta, Southwest, etc.) by using false documentation. The investigation, led by the UK’s Serious Fraud Office, has grown to include other authorities too, such as the U.S. Department of Justice, and has seen raids and at least one arrest. Meanwhile, SCRM analysts are focused on how this could have occurred, its origins, potentially missed warning signs, and how dangerous fraud schemes like it can be prevented in the future as it demonstrates that all industries and even the most mature organizations are at risk.

Leveraging these priorities—resilience, optimization, sustainability, and SCRM—can lead organizations to assess topics outlined below, such as strategic alignment, collaboration, risk management, and creative investments, on their path toward a holistic supply chain. This may also include reviewing situational awareness, connectivity with third parties, competitiveness, opportunities, risks, preparedness, and more.

How Can This Benefit Your Organization?

Understanding and leveraging these elements of your supply chain can position you better than your competitors by making your organization leaner, more prepared, more focused on data and intelligence-driven decisions, and more strategic when it comes to looking for opportunities to exploit and risks to mitigate. Having these ingredients positions your organization for speed, accuracy, enormous growth, situational awareness, and so much more.

Exploring and even implementing some of the following activities can start an organization on a path to a mature and holistic supply chain capability:

• Publishing procurement policies and practices that consider cyber and physical security threat mitigation plans, greenhouse gas emissions disclosures, community impacts, fair labor requirements, etc.
• Codifying employee development efforts
• Conducting data management assessments (inventorying and assessing data streams)
• Tipping and cueing reactions to real-world events

What Are the Challenges in Transitioning to a Holistic Supply Chain?

Companies looking to create this transformation to a holistic supply chain can potentially feel overwhelmed by the monumental task of building the team with the experience and knowledge to succeed while leveraging the data sources, technologies, tools, and more for this new environment — and doing so while every dollar that goes to non-revenue producing activities is understandably scrutinized. Below are some of the challenges:

• Cost pressures — Increased cost of capital for investments often loses against razor-thin profit margins in today’s competitive economy. In some industries and companies, anything that doesn’t project—much less quickly show—a sufficient return on investment may never make it past the proposal stage or be dismissed as soon as margins start to turn down, costs go up, the impact isn’t seen, or the resources are needed elsewhere.
• Lack of established internal knowledge base — Access to and the rising cost pressures associated with the talent to manage continuously changing environmental, sustainability, and governance requirements; cybersecurity threats; education; re-skilling and digitalization of the workforce; and more are challenges that don’t go away. This includes keeping up with the most leading-edge trends and developments, as well as emerging and declining technologies—and your competitors.
• Outdated or immature internal processes — Shortcomings in product traceability, immature sales and operations planning processes, and having decentralized, non-standard, or sequential processes both internally and with the supplier base are just some of the factors that can hold you back.

For example, there are increasing regulations coming into effect related to Chinese semiconductors² and their use in goods and services for the U.S. government and those that sell products and services to it. If you are a producer of just about anything and you are not aware of and heeding these and other regulations and prohibitions, there is a good chance your company will get crossways now or in the future, no matter who your clients are in the United States, because you or they will want to sell to the U.S. government.

Why Guidehouse?

Maintaining the integrity of the supply chain and logistics operations while evolving to address new sustainability, security, and resiliency demands requires a different approach with modern solutions to navigate forward.

Guidehouse is a leading global provider of consulting services to the public sector and commercial markets, with broad capabilities in management, technology, risk consulting and a comprehensive suite of digital services. By combining our public and private sector expertise, we help clients address their most complex challenges and navigate significant regulatory pressures focusing on transformational change, business resiliency, and technology-driven innovation. Across a range of advisory, consulting, outsourcing, and digital services, we can help our clients find scalable, innovative solutions to outwit complexity and position them for future growth and success.