STRUCTURE
Put simply, your network is the foundation on which your Supply Chain is built. It is a key determinant of your cost to serve and the ease with which your business provides great service to your customers. So it makes sense to ensure it’s in the best possible health.
Which means the right sites, doing the right things, in the right places to deliver your strategic vision. Are you OK to work that out?
Related ArticlesPut simply, your network is the foundation on which your Supply Chain is built. It is a key determinant of your cost to serve and the ease with which your business provides great service to your customers. So it makes sense to ensure it’s in the best possible health. Which means the right sites, doing the right things, in the right places to deliver your strategic vision. Are you OK to work that out?
Major Infrastructure Project - where do I start?
By definition, long-term infrastructure reviews are an infrequent event for a business, taking place every five-to-ten years. Consequently, even experienced Supply Chain professionals may have had little, if any, direct exposure to a major network design review. Yet the numbers associated with a network review can be dauntingly high, especially in the face of the inevitable pressure to continuously deliver short-term financial performance.
Sequoia has over two decades of experience in supporting Board members to make these decisions; evaluating future operating costs, assessing risks, calculating return on investment and supporting the creation of a sound business case.
We are able to bring our experience of multiple strategic infrastructure projects to the table to support your team, some of whom may have never been in this type of significant decision-making situation before.
Sequoia’s thorough and well tested methodology seeks to establish a realistic base case against which strategic investments can be evaluated and growth scenarios tested. It provides key stakeholders with the answers to questions about risk and return, using financial evaluation to ensure sound infrastructure decisions can be taken and a strong business case developed.
The result? A process that is able to identifying the lowest cost, most effective future Supply Chain infrastructure – be this manufacturing or distribution focussed.
" An extreme example of the importance of defining a realistic Base Case was when Unilever acquired Bestfoods in 2000. The line by line, site by site assessment of the capital required to maintain the excess of production lines was higher than the capital required to consolidate the networks. "
Leveraging a Supply chain for Competitive Advantage?
A cost effective Supply Chain is undoubtedly a critical success factor for any FMCG business.
However, cost effectiveness is the absolute minimum contribution the Supply Chain should make to business success. Sequoia assists major companies to fully deploy their Supply Chain as a competitive weapon, in support of the business strategy:
- Create a strategic plan to establish the optimal, lowest delivered cost – highest service Supply Chain infrastructure
- Configure the Supply Chain to support innovation and speed to market
- Protect business continuity through Supply Chain asset planning
- Initiate or respond to disruptive Supply Chain business models
What should the scope of our strategic review be?
We have created optimised Supply Chain strategies for multiple global and local clients. Each one is tailored and focused on the specific client priorities - which have been varied in scope:
- balancing end-to-end operational costs to determine least-cost Supply Chain infrastructure;
- ensuring newly merged Supply Chain networks result in the optimal supply network, including the phasing of asset investments;
- identifying the appropriate number and location of manufacturing facilities by trading off distribution costs with site scale economies and inventory costs;
- generating robust restructuring plans to deliver financially optimal returns on investments.
In each case we support our work with full financial evaluations including IRR and NPV outputs. Risk analysis is overlaid to ensure the decision is well considered.
" Our recent survey of the structure projects that we have completed revealed significant operating cost savings from network optimisation: up to 25% for some clients, with typical savings between 10 to 15%. "
Is Future Thinking incorporated in our Strategy?
Sequoia also work alongside leading businesses and thinkers – developing the ideas and strategies which will create the even more effective and efficient Supply Chains of the future. Considering, modelling and evaluating possible future step changes in the retail, manufacturing and distribution Supply Chain environments provides insight for our clients to think beyond the here and now, ensuring their decisions are taken against a backdrop of possible future innovations.
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