The document outlines a comprehensive supply chain strategy leveraging it as a competitive advantage for businesses. It discusses core offerings related to profitability management, working capital optimization, and supply chain planning, emphasizing the importance of synchronizing all components of the supply chain to adapt to increasing customer demands and global uncertainties. Deloitte offers a structured approach to implementing these strategies, focusing on transforming supply chain processes to improve efficiency and customer satisfaction.

1. Supply Chain Strategy
Leveraging the backbone
of your business as a source
of competitive advantage

3. Content
Supply chain strategy 4
Our core offerings 5
Integrated profitability management 6
Working capital optimisation 8
Supply chain planning 10
Sourcing & procurement 11
Supply chain network redesign & distribution 12
Business model optimisation 14
Operational excellence 16
Supply chain tools & methodologies 18
Why Deloitte? 19
Contacts 20

4. Supply chain strategy
From product development and sourcing through In the past, supply chain strategy has often been
manufacturing and distribution, it has never been more underestimated as a source of competitive advantage.
important to have all the moving parts of the supply Now, organisations are increasingly moving away
chain synchronised. In an environment with increasing from focusing their supply chain efforts on functional
customer demands, smaller quantities, less inventory excellence to leveraging their supply chain as a strategic
and slack capacity and significantly higher levels of capability.
uncertainty than ever before, more and more businesses
are rethinking their supply chain end-to-end. Not only have business leaders come to understand that
their supply chain is the backbone of their business, it is
This requires a top-down strategy supported by all roles also considered as an enabler for their business strategy.
that touch the supply chain – which is to say, everyone. In times when customers have increasingly higher
It also requires a commitment to developing the tools, expectations and demands, supply chain agility and
technologies, people and processes that move a supply flexibility are key differentiators for gaining a competitive
chain strategy from paper to reality. advantage.
Rather than engineering tightly coupled and inert supply When properly aligned, supply chain strategy is
chains, which are prone to failure when meeting the therefore not only about operationalising and
future, supply chain leaders are tailoring their supply supporting your business strategy; it is about leveraging
chain to the rising tide of global uncertainty and the backbone of your business as a source of
business complexity. competitive advantage.
It is clear that uncertainty and volatility are here to stay
and that supply chain leaders will have to define and
implement strategies to manage the associated risks. As
a result, supply chain strategy is paving its way to the
top of corporate agendas.

5. Our core offerings
Not only have business leaders come to
understand that their supply chain is the
backbone of their business, it is also
considered as an enabler for their
business strategy.
With our Supply Chain Strategy service offering we At Deloitte, we realise the importance of combining
assist our clients in organising and managing their deep process and technology experience with practical
supply chain to optimise profit, cost, efficiency, business strategy. With worldwide access to a highly
flexibility, reliability and customer satisfaction. We ranked range of capabilities across consulting, financial
therefore support our clients with the development and advisory services, tax and risk management, we take an
implementation of supply chain strategies and tactics by integrated approach that helps us see ways companies
offering them subject matter expertise and knowledge can use their supply chain operations to deliver more
on different subject areas ranging from the financial value across the business.
supply chain (Integrated Profitability Management
and Working Capital Optimisation), Supply Chain Putting the right supply chain strategy forward can be
Planning, Sourcing & Procurement, Network Redesign a daunting task. In this paper, we’ll cut through the
& Distribution, Business Model Optimisation (BMO) and clutter by breaking often complex supply chain strategy
Operational Excellence. into bite-sized pieces. It zeroes in on things that really
matter—and gives an overview of services and solutions
that really work.
Deloitte’s supply chain strategy offerings
Integrated
Profitability &
Working Capital
Optimisation
Operational Supply Chain
Excellence Planning
Supply Chain
Strategy
Business
Sourcing &
Model
Procurement
Optimisation
Network
Redesign &
Distribution
Supply Chain Strategy Leveraging the backbone of your business as a source of competitive advantage 5

6. Integrated profitability management Fulfil), and selling (Cost-to-Sell), by using pragmatic
Deloitte can help you in realising your objectives to activity based costing principles in a supply chain and
increase profit margins by focusing on cost reduction commercial context.
and revenue enhancement.
At the inbound side of the supply chain, this cost
From a cost perspective we will concentrate our transparency could be called Cost-to-Own (or more
efforts on reducing customer driven, internally driven commonly known as Total Cost of Ownership), which is
and supplier driven complexity. Our supply chain an important lever to enhance cost efficiency and spend
professionals can help your company with providing at supplier level.
Cost-to-Serve transparency in order to facilitate
profitability and portfolio complexity decisions at the From a revenue perspective we will positively impact
granular level of products and customers. Cost-to-Serve revenue enhancement or market share growth through
in this respect is a collective term for methodologies market and competition analyses, portfolio strategy,
that reveal the true cost of processes and activities pricing optimisation and increasing sales and marketing
in manufacturing (Cost-to-Make), logistics (Cost-to- analyses.
Integrated profitability management
Customer driven complexity
Internally driven complexity
Customer Company Supplier
Pricing
Cost-to-Serve
Cost-to-Sell Cost-to-Fulfill Cost-to-Make
Spend
Cost-to-Own (TCO)
Taking a granular perspective:
improving profitability from a customer, product and supplier perspective
G&A
Taking a functional and organisational perspective
6

7. Important subjects and tools are value-based For companies with average supply chain maturity,
management and value metrics, benchmarking, activity- integrated Cost-to-Serve initiatives often show potential
based management, customer profitability analysis, cost to improve absolute EBIT% margin with a range of an
management in supply chain relationships and balanced additional 0,5% - 2,0%.
score cards.
Businesses that invest in supply chain competences
In order to achieve sustained profits and a Return to ‘Provide Cost-to-Serve Transparency’ are leaders in
on Investment (ROI), this granular perspective will an evolution towards a more advanced type of supply
be combined with a functional and organisational chain management in which business performance is
perspective, focusing on Enterprise Cost Management improved by fine tuning the supply chain at a granular
and looking at processes, activities, and organisation. level. It is a clear example of what is commonly referred
Both perspectives are depicted in the figure below. to as ‘the Financial Supply Chain’, and constitutes a
transformation to a more mature type of supply chain
Methodologies that align the supply chain at the function in the business, reaching out to, and facilitating
granular level (individual products and customers), the business performance improvement dialogue with
probably comprise the biggest opportunity for profit and the Finance and with the Sales & Marketing functions.
cash flow improvement. The rationale is that over time,
companies are adding significant amounts of complexity
in terms of products and service offering policies. Not
all of this complexity is being added in a profitable way.
Therefore, it is not uncommon to discover as a result of
a Cost-to-Serve initiative, that a significant portion of the
profit potential - ranging from 30%-50% - is eroded by
unprofitable products and offerings.
Profitability improvement perspectives
Granular Perspective Functional Perspective
Customer Achieving
Enterprise Cost
Profatibility / Sustained Profit
Management (ECM)
Cost-to-Serve and ROI
Taking a granular perspective: Taking a functional and
improving profitability from a organisational perspective:
customer, product and supplier looking at processess,
perspective. activities and organisation.
Supply Chain Strategy Leveraging the backbone of your business as a source of competitive advantage 7

8. Working capital optimisation Working capital represents the liquidity a business
In order to be ready for tomorrow’s new opportunities, requires for day-to-day operation. It reflects the excess
businesses have to take action today. Businesses that of current assets over liabilities, comprising of accounts
want to excel will need to have sufficient cash available receivable and inventory minus accounts payable.
to get the most out of the presented occasions. One of When improving working capital in the organisation,
the few remaining areas which can deliver significant people must look beyond the boundaries of their own
cash to the business in a relatively short period of time operational processes and understand drivers of cost
without a large restructuring program is working capital. and complexity in the entire working capital chain: from
sales order processing to receivables.
By examining this cycle as a whole, inefficient areas
Working can be identified, processes optimised and cycle times
Capital
reduced. Working capital opportunities are tackled by
a variety of improvements on three pillars: increasing
Days Payables Outstanding (DPO) and reducing Days
Inventory Outstanding (DIO) and Days Sales Outstanding
Accounts Accounts (DSO). Examples of key improvement levers are depicted
Inventory
Payable Receivable in the figure below. A 360 degree view of the cycle
is pivotal in delivering an integrated approach to free
as much cash as possible in the short term and create
sustainable improvements in the long term.
Working capital improvement opportunities
Receive Working capital requirement
Cash out Cash in
invoice Cash conversion cycle
Goods Issue
Pressure
receiving invoice
DPO DSO Pressure
DIO Pressure
Days in Days in Days in
Days in
raw materials WIP finished goods
transit
inventory inventory inventory
Days payables outstanding (DPO) Days inventory outstanding (DIO) Days sales outstanding (DSO)
• Extend payment terms, halt early • Review production strategy (where to • Improve collection process and overdue
payments deploy inventory) and planning policies management
• Align payment term master data (MTO, MTS, SC decoupling) • Focus on quality of products and processes
• Optimise cash discounts against interest • Review safety stock levels and re-order (OTC) to ensure no barriers to timely
gains points payment
• Exploit opportunities to defer tax & duty • Reduce uncertainty in supply and demand • Align and optimise payment terms across
payments (forecast accuracy, supply reliability, supply territories and customers
lead times, change over times) • Optimise pricing structures, identify
• Reduce product portfolio complexity factoring opportunities
8

9. Making it visible, urgent, happen and stick insight on your working capital position and – maybe
Deloitte has developed a structured and collaborative even more important – to make it stick in your company.
approach consisting of 4 phases which jointly lead to This triggered Deloitte to develop a visual, highly
a successful implementation of sustainable Working interactive dashboard, which provides instant insight in
Capital Reduction (WCR) in the organisation. the most important working capital KPI’s down to detail
level. The dashboard supports powerful “on-the-fly”
To ensure that WCR remains top of mind within analysis and navigation from top-level overview down
the organisation it is essential for supply chain, to transaction details. Our WCR Cashboard is easy to
manufacturing and sales & marketing to think like a use for any business executive and easily adjustable and
CFO. However, it has proven to be time-consuming, expandable to your company’s specific needs.
costly and often difficult to obtain a comprehensive
Working Capital Management
Make it Visible Make it Urgent
• Understand Working Capital baseline • Perform what-if scenario analyses to identify
t i o n a n d Pe
• Understand maturity of existing process, an i s a op l the most critical drivers of performance
Org e
technology, and organisational capabilities • Identify opportunities based on root cause
• Perform transactional level analytics analysis
ib l e
• Report Working Capital Performance v is M • Define improvement initiatives outlining
it ak
e
rationale, key activities and risks
ak
ss Proces
e
ine
it
M
se
us
u rg
• Define and launch quick hits
ss
B
ent
• Build improvement roadmap
Working
Make it Stick
Capital
• Set up benefits tracking tool / WC Make it Happen
a
Ma
In
at
Dashboard (KPIs, information or D • Identify and suggest structural changes on
f
ma
tio n a n d
ke
requirements and reporting)
n
WC based on prioritisation of initiatives and
pe
st
it
• Secure ownership of changes in WC ic k ap roadmap
it h
management M a ke • Finalise and refine roadmap in differentiating
• Track progress of initiative roll out team(s) quick wins, tactical improvements and
(program mgt) Te c l s
h n o lo g y a n d To o strategic investments
• Determine key learning points and assess • Address WC ownership
possibilities for ongoing improvements • Roll out pilot initiatives at target business units
In order to be ready for tomorrow’s new
opportunities, businesses have to take
action today. Businesses that want to
excel will need to have sufficient cash
available to get the most out of the
presented occasions.
Supply Chain Strategy Leveraging the backbone of your business as a source of competitive advantage 9

10. Supply chain planning Because of our experience and global reach, we don’t
It has never been more important to knit your complex begin a project with a blank slate – rather, we know
supply chain together. Good advanced supply chain which improvement opportunities will drive most of
planning can keep the pieces, and the numbers, in sync. the necessary work. These opportunities, along with
Working from a clear top-down plan, you can focus relevant metrics & benchmarks, are captured in our
and sequence your efforts – so that critical areas like Deloitte Integrated Supply Chain (DISC) method. This
demand forecasting and inventory planning get the toolkit provides the foundation for designing leading
attention they need to drive improvements elsewhere. capabilities into your supply chain and accelerates the
time to benefit.
When forecasting works, roles and responsibilities can
fall into place. When lines of communication are open, Our services include the following areas:
competing views of demand can be reconciled and • Supply chain planning capability assessment and
news of change can reach the supply chain in time to opportunity identification
make a difference. When inventory planning works, • Integrated supply chain planning strategy, vision and
partners in the supply chain optimise all inventories – conceptual design
finished goods, critical components and raw materials • Supply chain planning process, technology and
– to effectively meet and respond to demand. And while organisation design covering the following areas:
large-scale transformation is often important, short-term - Sales and operations planning
actions can often drive big gains in working capital too. - Demand planning (including collaboration with
customers)
In supply chain planning, we work with clients to - Product lifecycle planning
develop strategies, define future solutions built on - Supply planning (including collaboration with the
leading capabilities and implement process and extended supply chain)
technology solutions. We’re as strong in helping clients - Inventory planning
execute a plan as we are in crafting it. - Supply chain flexibility
- Supply chain planning performance management
We help transform our clients’ business, generating
benefits such as:
• Reduced inventory levels
• Improved customer service
• Reduced cost of goods sold
• Improved forecasting ability & responsiveness
• Reduced planning cycle times
10

11. Sourcing & procurement Supplier management
Our supply chain service assists our clients across all Active supplier management is an integral part of
industries, private or public, to develop and implement strategic sourcing. Organisations are increasingly moving
strategies, tactics and infrastructures both within their away from the traditional approach of selecting the
own organisation and also across their extended supply “lowest cost supplier” to a “total cost of ownership”
chain of customers and suppliers. approach. This approach presupposes extensive
knowledge of supplier performance and its impact on
A strategic approach to procurement is proven enterprise operations.
to enhance the effectiveness and efficiency of
organisation’s operations as well as saving revenue Procurement optimisation
through effective sourcing, transaction cost reductions In procurement optimisation, the main focus is on
and standardised procurement processes. Sourcing transactional efficiency and on squeezing process-related
refers to the value added process of selecting suppliers costs and inefficiencies throughout the purchasing cycle
and the respective cooperation scheme. It must that begins with the identification of the need for the
be supported by advanced analytics and market material / service and end with its receipt. Best practices
intelligence, supplier performance information and a suggest that the procurement process should be as lean
concrete and well-developed strategy. On the other as possible.
hand, procurement refers to the transactional aspect of
the relationship and should be streamlined as much as
possible in order to achieve efficiency.
Deloitte can provide its clients with an integrated
approach incorporating spend analysis, strategic
sourcing, supplier management as well as procurement
optimisation.
Spend analysis
Before implementing any sourcing & procurement
initiatives, it is very important to analyse past, current
and projected spending patterns. The analysis must
span the entire enterprise and include data that is often
collected from various departments and locations.
Such an analysis of direct and indirect spend gives
the company the information and decision-support
required to develop supply strategies that are aligned
with the objectives of the organisation and to identify
and prioritise sourcing & procurement improvement
initiatives.
Strategic sourcing
The overall goal of strategic sourcing is to achieve
large and sustainable cost reductions, long-term supply
stability and minimisation of supply risk. The strategies
to achieve such goals can be as wide as rationalising
supplier base, leveraging spending across departments,
business units and geographical regions, reconfiguring
supply specifications, and / or developing strategic
partnerships / alliances with selected suppliers.
Supply Chain Strategy Leveraging the backbone of your business as a source of competitive advantage 11

12. Supply chain network redesign & distribution Change can be due to a number of trends. The
Supply chain network design aims to analyse and design network might erode because of a shift in the customer
the infrastructure of the supply chain network (inbound, base or the business model might change because
production and outbound) which fits the supply chain of an increased focus on sustainability. Mergers
strategy. The aim is to optimise both the level of service and acquisitions might bring along new plants and
towards your customers as well as cost of the supply chain. warehouses. Or perhaps, new products and markets
might lead to expansion of the network and an
Most supply chains are a result of legacy operations increased complexity. The combined effect of these
and strategic choices, not designed to drive value for an changes may significantly impact the efficiency of the
organisation in the future. Whilst these supply chains supply chain network and lead to a number of signals
are sometimes “good enough”, the rapidly changing for improvement.
business environment and growing complexity of many
businesses and their supply chain networks make a
strong case to step back, define and then implement
the optimal network configuration and operational
characteristics. No network lasts forever as the only
constant is change.
Signals for network improvement
Erosion
• Shifting customer base, volumes, product mix
• hanges in labor cost, tariffs, duties, currency exchange
C
Expansion & increased complexity
• ew products, markets, geographies
N
• upplier changes
S
• ompetitive dynamics with impact on product and service offering policies
C
Acquisitions
• ergers and acquisitions
M
• ew plants, new warehouses, new customers
N
Business model changes
• ake or Buy and outsourcing opportunities
M
• hanges in technology or organisation
C
• ntegration or regionalisation of supply chain functions
I
• ustainability and Corporate Social Responsibility
S
Costs
• High, and above average, overall distribution cost structure
12

13. Besides determining the physical aspects of the future profitable revenue growth, increased operating margin
network, there are a number of other considerations and increased asset turns. This balancing exercise
that will influence its design. Growth expectations, can prove to be daunting as network challenges
global or regional sales and brands, centralisation occur at every stage along the supply chain. A single
of planning, political stability, location of contract decision often sub-optimises another objective. All
manufacturers and tax considerations are only a few of in all, typical challenges for a network optimissation
the aspects to take into account in the network design. project are conflicting objectives and an ever changing
environment.
A network optimisation is a modelling-led activity that
defines the physical ‘shape’ and high-level operational Dependent on company objectives and constraints, a
characteristics of a distribution network. It is different network design study can be used for different sections
to operational modelling in that it looks over a longer of the supply chain like upstream, downstream, or
time horizon (3-5 years) to provide answers to key product segments. After analysing the current network
strategic questions. It helps organisations create a robust and both defining and implementing the optimal supply
solution that balances all of the strategic objectives, chain network, we have realised up to 10% to 15%
while considering all constraints and inputs to drive reductions in operating costs for our clients.
Network optimisation challenges
Increase Shareholder Value
Revenue Growth Asset Turns Operating Margin
Provide Differentiated Improve Working Increase Fixed Reduce
Customer Service Capital Utilisation Asset Utilisation Enterprise-wide Costs
Marketing strategy
Competitors
and portfolio
Co-locate capacity to Supply chain
Market developments Minimise Inventory
increase responsiveness planning model
Reduce no. of suppliers
External
Internal
Serve more profitable
Duties & taxes customers better Social impact
Maximise asset
utilisation at sites
Decrease lead times
Organisational model
Different costs Minimise
100% customer
between countries transportation costs
satisfaction
IT
Legal issues Working methods
Supply Chain Strategy Leveraging the backbone of your business as a source of competitive advantage 13

14. Business model optimisation As soon as businesses become more mature, in
With our Business Model Optimisation offering, we environments with less growth, they start concentrating
look at a company’s value chain to optimise the primary on other shareholder value creation levers such as
value creating activities in R&D, procurement, planning asset efficiency and operating margin. In this more
and manufacturing, sales and distribution and after sales mature stage, the more integrated, centralised and
service. functionalised operating models are favourable.
By taking a multi-country, very often regional or even a Supply chain transformation initiatives are a proven
global perspective, we align organisation and processes, way of reducing operational costs and increasing
and optimise the way resources are deployed, decisions profits. Most successful companies have gained a
are made and how the business goes to market. competitive advantage by applying continuous supply
Companies in the early stages of their lifecycle, chain improvements. These have resulted in streamlined
with growth abundantly available, tend to focus on processes, reduced stock levels, shorter lead times,
establishing their footprint in the market. For these better asset utilisation, improved productivity and better
businesses, the more decentralised and entrepreneurial service levels.
business models are favourable.
R&D and Sales &
Revenu Growth
Purchasing Manufacturing Distribution
Marketing Service
Integration of business functions in the primary value chain
Shareholder Value Creation
Operating Margin
Central
Mfg & Planning Sales & Distribution
IP company Procurement
Entrepreneur Entrepreneur
Entrepreneur Asset Efficiency
Support functions: support the activities of the primary value chain
Finance HR IT
(e.g. shared service operations)
14

15. But many of these projects fall short of their potential Business Model Optimisation initiatives do not
to leverage additional shareholder value. Why? Often necessarily have to be undertaken comprising the
they only invest in deep operational improvements, but complete supply chain in aggregate. In practice we find
ignore broader issues, such as structural tax planning. Or constellations ranging from a procurement entrepreneur
they focus on pre-tax gains instead of after-tax returns. over a supply chain company to a full principal including
Other companies concentrate on reducing the tax the R&D, IP and intangibles.
burden on their current operating model. But because
these tactical approaches do not automatically follow Deloitte’s Business Model Optimisation (BMO) services
a rise in profits, they are not effective in offsetting the focus on helping multinational companies integrate
marginal tax impact of new income. their operational and tax planning in a scalable and
sustainable way to help business leaders make more
Achieving world-class supply chain performance requires effective decisions on an after-tax basis.
an integrated approach, where companies not only
benefit from their operational improvements, but also
retain more of their additional earnings. This can be
facilitated by taking tax into account from the outset of
the supply chain planning.
Current Model Central Entrepreneur Model
Value Add allocation Value Add allocation
Third party
Suppliers
Third party Central
Suppliers Entrepeneur
Regional BG/BU Regional BG/BU National
Manufacturing Management National Manufac- Management Sales Office
Sites Costs Sales Office turing Sites Costs Stripped Risk
Profit and Tax Implications
Before After
Additional
Concentrating Profit ROW Profit Exponential
significant and
people functions, synergistic
Profit ROW assets, risk profit
management increases
and value add
with the central Profit Central
Tax ROW Tax Savings
Profit Central entrepreneur
Tax Central Tax Central
*ROW= Rest of the World
Supply Chain Strategy Leveraging the backbone of your business as a source of competitive advantage 15

16. Operational excellence Over the past decades, LSS has grown from a method
When businesses are maturing and going through the used on the shop floor in manufacturing industries to
different phases of their lifecycle, value creation efforts the entire supply chain, to service industries such as
are increasingly being made on improving operating healthcare and financial services, and even in the back
margins and asset efficiency. On the road to enhanced office for managing IT and human resources.
business performance, these businesses strive for
operational excellence. By combining the principles of ‘Lean’ and Six Sigma,
both waste and variation (defects) can be eliminated
Lean Six Sigma (LSS) is a structured and proven in product or service processes. Process inefficiencies
performance improvement methodology, which focuses or variations are identified using such tools as Value
on eliminating waste by improving cost efficiency, Stream Mapping or by calculating process capability.
quality and reliability, and compliance safety. LSS is a Having identified improvement opportunities, solutions
business performance improvement program, which can include increasing capacity through the application
combines focus on the customer with a structured, of Overall Equipment Effectiveness or enhancing
data-driven approach, leading to measurable equipment uptime through the introduction of Total
improvements. Productive Maintenance. However, these tools and
techniques used for performance management are
only some, but not all, critical success factors of lean
transformations.
Lean Six Sigma in the Lifecycle of the Business
Revenue • First mover in the market
Growth • Establish market footprint
Value Lean
Creation Six
Sigma
Operating
Margin • Cost efficiency
• Quality and Reliability
• Compliance safety/environment
• Customer Focus
Asset
Efficiency
16

17. Not only do business leaders need to understand their We see that especially this culture shift creates a flow of
business priorities (quality, cost reduction, flexibility, continuous improvement, which enables organisations
asset utilisation) and align their operational excellence to continuously achieve successes in lowering costs
strategy accordingly, they also need to develop business and enhancing customer’s experience by improving
transformation capabilities such as portfolio, program efficiency, quality and lead time. The combination
and project management. These include creating of Lean Six Sigma with integrated performance
transparency regarding the projects portfolio on site measurement enables organisations to further monitor
level, aligning projects with the site objectives and the improvements and control the process performance.
making the right choice when prioritising investments.
The journey towards operational excellence requires As the world’s leading supply chain consulting firm1, 1 Source: Kennedy Consulting
strong leadership to drive projects and to embed change Deloitte can not only help you to achieve operational Research & Advisory;
Supply Chain Management
in a culture of entrepreneurship and accountability. excellence by supporting your employees in the Lean Six Consulting Marketplace
Sigma approach and implementation, but also to create 2010-2013
Although buy-in from top management is critical, all the necessary preconditions to translate this operational
of the organisation’s employees play an important part excellence into enhanced business performance. We
in these improvements as the architects of the new have a large number of Black Belts and Green Belts
process. This makes Lean Six Sigma more than just a set that can help your organisation to transform processes
of improvement tools, but also a way to create a culture in a variety of industries including healthcare, financial
shift of the organisation as it provides the opportunity services, local government, energy and manufacturing
to create a common language in the business around industries.
performance improvement, and to create a platform for
leadership and talent development. LSS is more than a
methodology: it is a way of thinking.
How to translate an operational excellence strategy into
enhanced business performance?
n ce M a n a g e
rf o rm a me
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Supply Chain Strategy Leveraging the backbone of your business as a source of competitive advantage 17

18. Supply chain tools &
methodologies
Within Deloitte, we have a wide variety of tools and Here are some example supply chain metrics following
methodologies to execute complex supply chain the strategy/plan/source/make/deliver process taxonomy:
transformations. A primary example is our Deloitte • Strategy: Metrics surrounding the creation and
Integrated Supply Chain (DISC) method, which serves as management of the overall supply chain strategy,
a focal point for the supply chain practice area across including defining the organisation, establishing the
global boundaries and provides a common language for budget, management oversight and the performance
large-scale, global supply chain engagements. Our DISC achieved by the overall supply chain network.
method is based on the Supply Chain Council SCOR® • Plan: Metrics driving customer service and working
model and enhanced for a more holistic approach, capital (including inventory levels across the supply
integrating our supply chain-related offerings across chain) and address the functions of demand planning,
each of the Strategy & Operations, Technology, and supply planning, inventory management, distribution
Human Capital service lines. Other tools include our requirements planning.
Supply Chain Shareholder Value Map, IndustryPrint, • Source: Metrics on procurement effectiveness and
CategoryPrintsTM and Lean Six Sigma. efficiency — strategic sourcing, operations and
management of suppliers, contracts and commodities.
Furthermore, Deloitte has established a Global • Make: Metrics on cost and staffing around
Benchmarking Center (GBC) to provide executives with manufacturing — production, material availability,
industry-relevant metrics and insight. Relevant supply quality assurance, maintenance, sanitation and
chain data — gathered through benchmarking — can engineering.
help provide executives with the context they need • Deliver/Return: Metrics on cost and staffing levels for
to identify and prioritise improvement opportunities. order fulfillment, logistics, distribution, transportation
Through benchmarking, executives gain fact-based and returns/recalls.
measures across different dimensions of performance,
such as cost, quality, cycle time and customer service.
Our supply chain benchmarks are particularly robust in
client data from product industries (consumer business,
process manufacturing and discrete manufacturing).
Deloitte Integrated Supply Chain (DISC) method
Develop Plan Source Make Deliver Returns
Product Supply Chain Sourcing & Manufacturing Logistics & Reverse Logistics
Innovation & Planning Procurement Operations Distribution
Development
Strategy
Process
Technology
People/organisation
Performance management
18

19. Why Deloitte?
We help clients in their efforts to deliver more value at In summary, we offer leading edge supply chain advice
every step across their end-to-end supply chains – from to both the public and private sectors and can assist
design and planning through sourcing, manufacturing, in undertaking all aspects of strategic and tactical
delivery and return. We do this by helping to define a assessment, design and implementation to improve your
global supply chain strategy that not only aligns with a supply chain operations.
company’s overall business strategy, but also provides a
playbook and roadmap for execution. Our approach focuses on analysing our client’s supply
chain along three major dimensions: its business value
The supply chain has always been important; today it from both financial and customer standpoints, the
is critical. We understand the pressures and problems components and capabilities of its management and
faced by managing the complexities of the supply chain. the leadership alignment and infrastructure to support
Our teams are equipped with the experience and skills organisational change.
required to tailor our services to meet the specific needs
of our clients.
Key lessons we’ve learned along the way Some industries are ahead of others, and you
could be among the first to “import” a proven
Consider cross-functional impacts. leading practice.
Supply chain strategy is about more than just
operations. It also calls finance, HR, tax and other Focus on information, not inventory.
functions to the table. For example, you can’t Your customers have custom requirements. To
weigh the outcome of moving some operations the extent possible, learn to assemble and deliver
to another country without considering the tax rather than to build, warehouse and sell. Even if
implications. Every department brings a useful this strategy applies only to the marginal “tail”
perspective and set of values. SKUs and not your “A-movers,” it can enhance
your reputation for responsiveness. Last-minute
Stay flexible and balanced. customisation isn’t just for cars and PCs anymore.
An over-investment in fixed assets or fixed
capacity can pin you down. An under-investment Embrace sustainability.
can leave you unable to meet pressing demand. Not only is it here to stay, but green management
The right mix of in-house and third-party assets is like green food: good for you. Make a serious
– of fixed and variable costs – can provide effort to integrate sustainability into your
necessary agility. supply chain strategy instead of tinkering on the
margins – or worse, treating it like as PR gambit
Take a broad view of benchmarks. with no substance to back it up.
There may be lessons worth learning outside
your immediate industry or sector.
Supply Chain Strategy Leveraging the backbone of your business as a source of competitive advantage 19

20. Contacts
In case you want to know more about this topic, please do not hesitate to contact us:
Stefan Van Thienen Paul Delesalle Kobe Naesens Isabelle Hautecourt
Partner Director Manager Manager
+ 32 476 22 01 03 + 32 476 49 50 08 + 32 475 30 07 44 + 32 473 30 27 85
svanthienen@deloitte.com pdelesalle@deloitte.com knaesens@deloitte.com ihautecourt@deloitte.com
For more info on this topic, you can find us on the web:
www.deloitte.com/be/supply-chain-strategy Deloitte Supply Chain Strategy website
Deloitte – Supply Chain Strategy LinkedIn professional group
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