Supply Chain Modeling and its Importance

Supply Chain Modeling and its Importance

By: Jorge Silva   |     August 12, 2017
Preparing for a Downturn

Offshoring, onshoring, nearshoring, are business solutions that international and multinational companies have used for years. However, only a very small percentage of these companies have in-house tools that are effective at supply chain modeling and can help senior leaders model the never ending global supply chain changes required to meet the needs of an ever more demanding and less loyal customer base.

The current and future business environment demands agility, speed and flexibility.  These options, though essential for any growing organization, are costly and demand special tools and a support system to manage the same.  Take for example a company that wants to reduce its cycle time to better service its clients in North-America.  This client has a well-established supply chain that originates in China for the most part.  This approach has worked well for many years.  So, the traditional wisdom has been “if it ain’t broken don’t fix it”. However, the problem is that the company is using the same map to navigate a different landscape.  Competition has increased, customers are becoming more demanding and operating costs in China are growing at 20+% per year.  Products that yielded high gross margins just a few years ago are much more expensive and, that trend is not going to change any time soon.

What does a company do when they discover how different today’s business landscape is and their in-house resources are scarce at best and have no margin to consider alternatives? What do you do about the current geopolitical mess in the far east?  What happens if the US/North Korea/China reach a stalemate?  Good corporate governance requires that senior leadership consider alternatives, but how does one identify and model the plethora of options available to them?  Can management rely solely on their prior experiences?  What if the decision they make is a total failure?  Suffice to say, that the consequences of no decision or the wrong decision could be devastating

Fortunately, there is a better way to plan for eventualities and alternatives through supply chain modeling first. Group50 Consulting has developed supply chain modeling tools for analyzing a company’s supply chain that can quickly and inexpensively model changes to a supply chain and perform what-if analyses.  There are hundreds of variables that need to be considered to mitigate risks and optimize ROI. The tools and expertise that Group50 Consulting possesses provides management simple and executable options as well as resource to help with the implementation.

So, before you say “I do” to plan and implement strategic shifts to your supply chain like offshoring, nearshoring or onshoring, model it.  For more information on how easy it is to make this happen, contact Group50 here, drop us a line at info@group50.com or call (909) 949-9083.


 

About the Author:  Jorge Silva is the Global Initiatives Practice Lead for Group50®Consulting. He has over 25 years of global experience in companies ranging from start-ups to Fortune 100 in multiple industries.  He brings a unique view of how the globalization of business is best done, measured, and improved.  Jorge is a multi-national sales, marketing and business development expert whose core competency is designing and executing creative growth strategies.  He is fluent in Spanish and English and has lived and worked in the US, Spain, Singapore and the Philippines. #Group50,#supplychain, #onshoring, #nearshoring

This entry was posted in Global Initiatives, Manufacturing and Distribution, Mexico, on August 12, 2017
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