A successful, profitable, sustainable supply chain starts within your organization. Developing internal competency for supply chain design and network optimization capabilities is at the core of not only supply chain success but also the success of your entire company.  

At the OptiCon 2024 event, Kerry Rosenhagen, managing director at NTT Data Supply Chain Consulting co-led a session explaining the foundations of effective supply chain design.  

The team from Optilogic asked Kerry to share his seven expert tips for building a sustainable supply chain design organization. Read on for his insights and connect with Kerry here. 

Supply Chain Design as a Core Competency

Before we discuss the practical steps of supply chain design, we must stress the importance of top-down buy-in. For the organization to embrace supply chain design, adoption must be a priority at the executive level.  

“Supply chain design must be a core competency for a business to have a well-designed and well-performing supply chain.” – Kerry Rosenhagen

From a budget standpoint, the C-suite must allocate resources to hire quality team members, compensate them well, and create a team large enough to be sustainable through inevitable turnover.  

It starts at the top: if leadership champions supply chain design, the rest of the organization will, too. Conversely, it will not be important to the organization if it’s not important to leaders.  

Now, let’s get into the tips for building your supply chain design organization.

Tip 1: Cross-Departmental Involvement Is the Key to Success

Supply chain design is a total-organization endeavor and requires cross-departmental involvement. From transportation, warehousing, finance, demand forecasting, inventory replenishment, and every team in between, you need to involve SMEs from these different functions to build the model, ask the right questions, have the proper business constraints, and develop organizational confidence in these results.  

Getting buy-in and input from across departments helps ensure your supply chain design is effective and profitable.   

Tip 2: Supply Chain Design Requires a Capable Team

Supply chain design isn’t effective in a silo, and it’s not something an individual can execute. Design requires a forward-thinking team that will work with the departments within your organization. You want the right leadership, the right team under that leadership, and external partners that provide support as needed.  

Well-rounded leadership that promotes supply chain design capability

A successful supply chain design organization must appoint the right person to leadership.  

“Many organizations see supply chain design leadership as a purely technical and analytical position and neglect the leadership skills required for the role.” – Kerry Rosenhagen

Ultimately, your supply chain design team lead must do just that: lead. You need someone with strong people and management skills who understands and executes modeling and design tasks.  

Companies need a supply chain design leader who will promote the capability within the organization and build up the internal design team. Think of your supply chain design lead as the head of an internal consulting team. They’re responsible for engaging various departments within the business, promoting their team’s capabilities, and creating a pipeline of projects so their team provides as much value as possible to the organization.  

Leadership should display analytical and modeling capabilities, show interest in and understanding of the business, and be the leader the rest of their team wants to follow.

Hiring candidates you can promote

While not everyone you hire needs to have the potential to be promoted to a leader, you want to hire and promote someone within the supply chain design team and task-level contributors. At some point, your team leader will likely move on. Promoting within the team is ideal, so you want well-rounded candidates who could move into that position.  

In addition to the team leader, you need a team of at least three people to weather turnover and maintain competency. One or two people don’t have the critical mass of sustainability. If you lose one employee out of a team of two, you lose half of your capacity.  

“Maintaining organizational knowledge, culture, and methodology is challenging for any enterprise. It’s crucial that your team captures as much of your methodology as possible and document and retain the knowledge systematically.” – Kerry Rosenhagen

This is especially difficult when you suffer turnover and lose expertise and capability with each team member who leaves. Document where you can and determine an organizational system for maintaining competency.  

Leveraging external partners

In addition to documentation and systematizing the work, which helps maintain continuity of competency, you can leverage external partners to support your supply chain design teams.  

Kerry notes, “When you have a partner like NTT Data Supply Chain Consulting, you maintain a relationship with a team within our consulting organization. We can help augment resources, manage through turnover, and add stability and continuity to the competency, which is difficult to achieve with a small team of people.”  

Tip 3: Define What “Good” Means for Your Supply Chain

Supply chain design isn’t a one-size-fits-all, one-and-done operation. It’s a continuous discipline that evolves as your organization and its goals and priorities change.  

• What are your objectives?
• What are you trying to achieve with a better supply chain design?
• What are your current pain points in terms of SC performance?
• Are customers complaining that it takes too long from order to delivery?
• Are you able to fulfill orders efficiently in your distribution center (DC)?
• What are you trying to improve with a better supply chain design?  

These are a few initial questions you should consider with your team. Asking these questions of your organization helps you identify, define, and design the best supply chain for your company. 

Tip 4: Build a Cohesiveness of Purpose and Career Progression for Your Team

One huge challenge for most organizations is turnover, and one way to mitigate that is to provide a career path and leadership opportunities for team members.  

Your team members want to build their skill sets, provide value, and advance their careers. As they see leadership or other promotion opportunities within the broader supply chain organization, they will seek advancement and will likely want to move on to other roles. Build a culture around the value of supply chain design and network optimization within your organization, so your teams feel valued and have a purpose.  

Successful designers are remarkable assets to your broader supply chain or operational organization. Create a pathway for these team members to continue serving, growing, and providing value within your organization to create a win-win scenario for everyone involved. 

Tip 5: Rapid Prototyping to Test and Retest

Many organizations make the mistake of prematurely implementing new approaches before seeing a proof of concept or confirming value. Supply chain modeling allows you to test and retest infinite scenarios to determine the ideal SUPPLY CHAIN DESIGN decisions for your organization. The right tools provide businesses with a quick proof of concept so their teams can implement changes quickly and accurately to bring their organization closer to its ideal network design.  

Tip 6: Operationalize and Implement Results from the Team

Dependencies and constraints drive design decisions. Your team must understand how these factors impact both day-to-day and big-picture operations. Create and follow a detailed project plan that includes lead times associated with implementation and how it affects your dependencies and constraints.  

Evaluate how those choices might disrupt your business as you consider new implementations. For example, you might add two new distribution centers to your network within 12 months. At first glance, that seems like a positive move. But will that implementation cause too much disruption? Should you move forward one at a time so as not to disrupt?  

Understand the dependencies of implementation and create a plan that allows you to meet customers’ needs as you execute it.

Tip 7: Be Open Minded to New Supply Chain Design Approaches and Tools

As your organizational and operational goals constantly evolve, so is supply chain design. Be open to exploring new technologies that empower innovation in this space. AI, ML, and other powerful machines continue to redefine how we approach supply chain design.  

Explore ways you can increase the size of your toolkit. In the past, mixed integer algorithms were the norm. Today, systems with astronomical horsepower and computing capabilities allow for detailed, near-instant outputs that inform supply chain design and network optimization.  

These new techniques and approaches yield enhanced decision-making support that helps your organization achieve—and even surpass—its current goals.  

Building Your Ideal Supply Chain Design Organization with Cosmic Frog

A good supply chain design is the foundation of your organization. For your supply chain to be sustainable and successful, it must be built and optimized for your unique needs.  

Cloud-native Cosmic Frog is the leading supply chain design solution on the market. Test changes to supply chain structure, policies and rules across cost, service, and risk metrics. Leverage one-click sensitivity analysis to adapt to whatever conditions come your way.  

Create your free Cosmic Frog account now to get started.  

Connect with Kerry and his team at NTT Data Supply Chain Consulting here.