Strength Through Diversification: Opportunities across Asia Pacific

SUPPLY CHAIN REDESIGN

Supply chains have a design life, normally of at least 5 years but usually of around 10 years and so require ongoing assessment and updating. However, enacting a complete redesign, or even an update, should not be undertaken lightly as 80% of supply chains costs are locked in at the design phase. This is why it is imperative that making the right decisions about the design and operation of future supply chains networks needs to involve rigorous data analytics, use of advance planning processes, algorithms and tools and access to latest market conditions.

Beyond this, further factors for consideration include:

Service lead times can vary greatly by sector and by different supply chain design types. Agile supply chains allow for quick response, while lean supply chains offerpredictability at low cost. It is important to analyse and understanding customer buying behaviour, not just now but into the future and how this impacts competitive environments. Proximity to suppliers is a fundamental consideration in achieving manufacturing continuity and not exceeding target input costs. Transforming supply chains and moving away from established supplier ecosystems carries risk that can sometimes outweigh benefits which should be rigorously analysed and tested in the design phase. Labour availability, cost and productivity varies considerably across sectors and geographies. Corporates need to consider labour availability against the key skills required. While the ongoing shift to automation, particularly robotic solutions, can significantly reduce blue collar labour it simultaneously creates demand for skilled technicians and engineers to ensure efficiency gains and continuity. Such labour which is not always readily available in every market.

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