Future retail supply chains need a digitally enabled operating model

The requirement to make changes in retail supply chain structures is now recognised more than ever as critical to customer experience and the associated success of retail organisations. Doing nothing is not an option.

However, Argon & Co ANZ has identified that many retailers in Australia and New Zealand still haven’t taken the actions required to set the foundations for their future supply chains.

Developing a customer centric supply chain with the capabilities to support omni-channel retail requires a strategic roadmap of building blocks that iteratively increase customer experience alongside improving supply chain agility and efficiency.

The journey to a future, digitally enabled operating model starts with a clear vision for your supply chain and knowing how this materialises in operational execution to meet the new customer experience required to successfully grow your organisation. Your operating model should connect vision and execution through an end-to-end supply chain covering 7 key elements;

  • Organisational design – here you define the organisation structure and ways of working to deliver the supply chain vision. When setting up the team to orchestrate the end-to-end supply chain you need to identify the core competencies to invest in and align to the business and supply chain strategy.
  • Processes – having robust policies, frameworks and understanding of how each part of the process contributes to your vision and customer experience enables automation of business rules enabling the nirvana of managing just the exceptions.
  • People & capabilities – most organisations recognise that people and capabilities are critical to their success, yet many fail to develop clear strategies for retaining, developing, motivating, and evolving their workforce to meet their business needs.
  • Performance measures – rethink how you target performance by aligning to your vision, identifying key focus areas by team, defining primary & secondary KPIs, along with clear objectives and key result (OKR) goals. Determine the data requirements, the lead and lag indicators and reporting frequency and format up front, then automate it.
  • Governance & reporting – get clear on how all levels of your organisation will receive and review performance to leverage the new advanced lead & lag performance measures.
  • Systems & technology – whether you decide on a full-scale multi-year digital transformation or a targeted modernisation effort the use of data, advanced analytics, optimisation tools and visibility layers enable the digital foundation that can unlock integrated, agile end-to-end supply chains.
  • Network infrastructure – having a clear, yet flexible strategy for your supply chain network is critical to efficient and agile operational execution.

Combining all these elements provides a future state target operating model. Leveraging a digital foundation, the future operating model will effectively coordinate and control your supply chain activities unlocking efficiency benefits and enabling rapid sense & respond capability driving operational agility.

Argon & Co are hosting a webinar on 27th October 2021 on How To Increase Agility and Efficiency In Your Supply Chain To Meet Customer Demands. Sign up for free on-demand access here.

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