Supply chain management – the quiet revolution

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Supply chain management can move beyond functional improvement to deliver significant strategic and competitive advantage to an organization.

In other articles in this short series we’ve looked at the effect of digital transformation, and at the evolving role of the demand planner.

In this one, I’m briefly going to discuss supply chain management as a whole, and how it is becoming the next frontier for business process outsourcing (BPO).

There’s a quiet revolution taking place. For many years now, our teams here at Capgemini have been helping our clients shape some of the most admired supply chain functions in the marketplace.

New benefits

In demand planning and master data management (MDM), we’ve helped our clients achieve real strategic and competitive advantage through a range of benefits, including reduced working capital, improved customer service, increased productivity, enhanced agility, increased scalability, improved responsiveness, and enhanced transparency.

By bringing together our own expertise and technology with their own systems and experience, we’ve seen products being brought to market 60 and even 80 days sooner than would otherwise have been the case. The usual BPO business benefits of cost and time savings, increased efficiency, and the ability to reallocate staff to less repetitive tasks are being joined by others. In particular, we’re seeing greater speed to revenue – the ability of organizations to develop their supply chain not just as a function, but as something that can bring them into new markets at speed and deliver significant competitive advantage.

In order management, our Digital Global Enterprise Model© (D-GEM) is helping organizations with robotic process automation (RPA) and with intelligent rules-based exception handling to ensure orders are processed much more quickly and efficiently, and with fewer errors. Again, the usual BPO benefits – an instance here might be reduced cost-to-serve – are being joined by new advantages. Faster, more seamless, more accurate order fulfilment increases customer satisfaction, retention, and, ultimately, revenue growth.

Tangible benefits such as these are important, not just for the bottom line, but as a justification for choosing to adopt the BPO route in the first place. When an organization considers outsourcing an area of its operations as fundamental as its supply chain management, it is staking a great deal – which is why global service providers need to be able to demonstrate that theory is borne out by practice, and in particular, by significant results and by Proof of Concept exercises. Surprisingly, few of them seem to do this; at Capgemini, we aim to make a virtue of it.

Success stories

Here are a few cases in point.

A global fast-moving consumer goods (FMCG) business saw:

  • Up to 20% relative improvement in forecast error rate
  • Up to 25% improvement in demand planner productivity
  • Reduced 0.5 days of inventory throughout the network, resulting in inventory savings of around €90 million.
  • Over €11 million in annual inventory cost savings for excess and obsolete inventory.

An international medical device, pharmaceutical, and consumer packaged goods company saw:

  • Up to 18% relative improvement in forecast error rate
  • Up to 25% improvement in demand planner productivity
  • Over €10 million in annual inventory cost reduction
  • Over 15 value-adding transformation projects implemented for demand planners.

A European-based multinational bottling company saw:

  • Up to 13% relative improvement in forecast error rate
  • Over €3 million reduction in working capital, warehousing and freight costs
  • Over €30 million saving from network optimization

As I say, these aren’t just our successes. Nor are they simply traditional BPO successes. They are also examples of how supply chain management, and supply chain management BPO in particular, can move beyond functional improvement to deliver significant strategic and competitive advantage to an organization.

Learn more about how Capgemini’s Demand Planning offering puts your customers at the very center of our solution, opening your channels to new, innovative business models that can lead to increased revenue, profitability, and working capital, as well as enhanced customer satisfaction.

To learn more about how Capgemini’s Digital Supply Chain Practice  can increase your competitive advantage by strengthening your business drivers and focusing on your end customers, contact: mike.meech@capgemini.com

Mike Meech is passionate about delivering real transformation outcomes to Capgemini’s clients through applying his knowledge of 15 years in the Procurement Supply Chain BPO market as a delivery leader, transition manager, and solution architect.

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