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Sourcing is about value chain improvement – not just cost cutting

June 21, 2017
Posted by adjuno

On 8th and 9th June, Adjuno attended the ‘Manufacturing Supply Chain Officer Summit’ organised by GlobalSCM group in Singapore. It was an action-packed two day event which attracted over 130 attendees and 15+ supply chain speakers to join in. The theme of the summit was “From Innovation, Collaboration to Automation, Digitization”. During the summit speakers and panel discussions focused on sourcing and supply chain improvement initiatives. Some of the global companies namely Philips Lighting, Cisco, Schneider Electric shared new and innovative ideas along with some real life case studies. It was interesting to see how connected supply chains are moving towards next step in supply chain which is digitisation and automation.

One of the key messages we heard during the event was well expressed by Debashis Tarafdar, Gartner Research Director: Being Customer Focused to move to Value Chain Improvement is NOT just about understanding customer demand – it is about developing Agile Supply Chains.

If you missed it, below is a snapshot of event and some of the key takeaways from the keynote speeches and panel discussions.

The focus of the first day started with John Gattorna focusing on understanding different organizational supply chain buying behaviours – and the different characteristics of supply chain agility and decision making in a campaign environment.

This led to in-depth discussion and illustration through case studies of connecting the extended supply chain, and the preparedness to shift towards digitalization by Jun Kim – Cisco, Jan Nestler – Perkin Elmer, and Mark Morley – Opentext

Debashis Tarafdar, Research Director of Gartner group presented great learnings from their experiences in organisations moving up the Value Improvement curve from an “Inside Out” to “Outside In” approach, while shifting from a Service (response) to Cost Reduction to Service (proactive differentiation) focus. Through this journey towards truly orchestrated and digitalized supply chains, organisations can begin to truly add shareholder value.

On the following day, there were some great case studies of how Philips Lighting (Roland Bastiaensen) used advanced Continuous Improvement methodologies and collaborative metrics to improve agility and Procurement Engineering in their sourcing and product development. Additionally, Schneider Electric (Stuart Whiting) also demonstrated the case study results of a truly optimised supply chain using the ‘Buying Behaviour models’ with collaborative metrics and shared information.

My key take-away messages from the event were:

  • It is essential to understand the nature of your supply chain and whether it requires a Lean or an Agile response
  • Digitalisation using visible and shared information is a growing necessity
  • Many organisations are shifting their procurement initiatives to a ‘focus AWAY’ from just cost down – the ability to collaborate in cross functional teams to source improvements in customer value is a key initiative. Cost down on its own is not enough.
  • Many organisations are struggling to manage the information flow and storage at origin (prior to ERP existence), and need visibility tools and templates to help source ethically and manage the potential mountain of information in a systematic way

There were many other interesting speakers and panel discussions throughout summit focusing on how improvement methodologies, innovations and collaboration will change the face of supply chain and move towards the age of digitisation and automation. It will be interesting to see how technology will play an important role in leading sourcing and supply chain initiatives in the future.

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