Supply Chain Strategy – Case Study

1. 1. Identified large growth opportunity in a downward market.
   2. Market study on how to differentiate in the market through supply chain.
   3. New business and supply chain strategies.
   4. Defined strategies for leveraging installed base.

Situation

The market for a $600M division of a large multinational corporation was decimated by the pandemic. Growth wasn’t forecasted for several years, so the company wanted to find ways to grow sales while waiting for the market to come back. The leadership team wanted to know if there was a way to utilize supply chain excellence to differentiate themselves in the marketplace.

Solution Approach

Working with the leadership team, we decided to do a market research study for each of their four product channels. The company also had multiple channels of distribution which were different based on geography. Given that this was a global company, our research focused on finding ways to differentiate the company by identifying ways to leverage current industry gaps as identified by the Voice of the Customer in the following areas:

1. Supply chain requirements (new product and spare parts)
2. Product delivery and quality performance
3. Product capabilities
4. Support in the field – pre-sale and post-sale (internal sales, field representatives, manufacturer’s representatives)
5. Voice of the Customer

During the research phase, we reviewed current performance data, and interviewed over 50 customers, manufacturer’s representatives, current employees in sales, service and supply chain. We also spoke with former employees of the company and former employees of their competitors. We also studied internal business processes and strategies to identify operating gaps, plans and programs that would impede recommendations.

Findings

In each of the four served markets we found the following:

1. The product portfolios were incomplete and needed to be more robust.
2. Service levels and after the sales service was a thorn in the customer’s side, because downtime was unacceptable.
3. Quality needed to improve.
4. Customers wanted their products but viewed them as black boxes that provided information. They wanted the products to be tied together to allow information to be aggregated and have reporting that helped them run the equipment better with higher productivity. They wanted holistic solutions.
5. They wanted suppliers who were innovators.
6. The company had a huge installed base that they were ignoring.

Solutions

Utilizing our Supply Chain Hierarchy of Needs® framework we took the results of the research and presented the findings to the senior leadership team. After reviewing them, leadership realized that their Most Important Goal and their business strategies were out of sync with the marketplace. That caused us to pause for a moment and redefine them. They ultimately decided that their Most Important Goal was to own the installed base of products for the entire industry, not just their installed base.  utilizing our “Where to Play” and “How to Win” strategic planning framework, we were able to redefine their value proposition, business levers they could take advantage of, prioritize markets to play in and build “How to Win” strategies. That morphed into several different strategies:

1. Long-term
   1. Become a system supplier rather than a product supplier.
2. Short-term
   1. Create additional revenue generating “after the sale” services that were system focused.
   2. Redefine their supply chain structure: Organization, skillsets and technology to support each product channel.
   3. Optimize their technology backbone.

Upon completing this effort, we held an “Implementation Workshop” with senior leaders to layout the multi-year implementation roadmap, create project charters, and identify teams that were responsible for those projects.

If you want to speak with a supply chain strategist at Group50 and find out more about this case study or learn how digital transformation can accelerate your company’s performance, please send us an email at info@group50.com, call us at (909) 949-9083, or request more information here.

About the Author:  Jim Gitney is the CEO and Founder of Group50^® Consulting, and the author of “Strategy Realized – The Business Hierarchy of Needs®” which summarizes a framework for creating a business that leverages topics in this article. (You can find out more about the book and acquire a copy by clicking on the image to the right).

Founded in 2004, Group50®consulting is focused on working with middle market companies to significantly improve their productivity by leveraging people, process and technology as part of a company’s strategic plan.  Group50® consists of consultants who have spent their careers in corporate America learning how to optimize businesses.  We specialize in working with senior leaders to develop and implement strategies that accelerate top line and bottom-line performance.

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