Global Supply Chain Management
How to meet current challenges with strategic investment and consolidation.
02.06.2022 | Article
The manifold challenges and disruptions that global supply chains are currently facing are greater than ever before. Geopolitical tensions, an increasing shortage of resources, and the global Covid-19 pandemic have all had an immense impact on the trade in goods and are creating a tremendous pressure for companies from all industries to adapt to these changes.
In order to ensure a resilient supply chain and to be prepared for future challenges and disruptions, companies must be aware of the complex dependencies between the different enablers and target dimensions within a reliable supply chain. The new Porsche Consulting Study provides decisive insights into which strategic investments need to be made in order to consolidate the supply chain and ensure long-term customer satisfaction. A new approach was designed to differentiate investment plans into mid-term and long-term strategies with the aim of identifying potential for transformation in the supply chain visions and strategies of the respective companies. Porsche Consulting has therefore developed a functional model that bundles these complex issues into four target dimensions: Resilience & Flexibility, Cost & Capital Efficiency, Ecological Sustainability, and Social Acceptance. These premises and target dimensions are facilitated by three internal and three external enablers respectively. The internal enablers comprise Processes & Organization, Digitalization, and Technology, while the external ones include the Operating Model, Partnering, and Geographical Portfolio.
Figure 1: Target Dimensions and Enablers for Supply Chain Management
According to the feedback from the participants, Resilience & Flexibility as well as Cost and Capital Efficiency should be the medium-term investment priorities. Operating Model and Processes & Organization are thereby key enablers for achieving medium-term success. These enablers can ensure a robust supply chain that has the ability to adapt to new circumstances and continue operations without suffering financial losses – even in times of crisis.
Figure 2: Medium-term investment prioritization
For the long-term success of supply chains, the participating experts and executives stated the increasing importance of Ecological Sustainability as a key target, which follows Cost and Capital Efficiency and Resilience & Flexibility, two priorities mostly based on the long-term strategic commitments and corporate strategies of their companies. Key enablers for achieving success in the long run are Digitalization and Technology.
Figure 3: Long-term investment prioritization
The results have shown that, given the pressing global challenges that businesses are facing at present, experts and executives are focusing their supply chain investments on inbound and outbound logistics more than on inhouse processes. The necessary short- and mid-term adaptations are mainly concentrated on organizational measures, such as Operating Model and Processes & Organization, whereas Digitalization and Technology are crucial when it comes to achieving long-term success.
¹ The international Porsche Consulting study was conducted from July 2021 to March 2022. The 60 participants, originating from different industries and levels of hierarchy ranging from expert to C-level management, were asked to weight their investment priorities in medium- and long-term investment strategies for supporting global supply chain management at their respective company.
