This research note is restricted to the personal use of Stephen Oudet (Soudet@deloitte.fr).

2013 Strategic Road Map for Managing

Supply Networks in Industrial Discrete
Manufacturing
24 October 2013| I!"002#01$1
%ane &eitler | 'i(as Saran)dhar | *ar(o +u((ila
Industrial ,anufacturers operate suppl- chains .ith co,ple/ de,and0 product
,anufacturin) and suppl- processes0 .hile tr-in) to balance custo,er ser1ice and cost.
Suppl- chain leaders can use this strate)ic road ,ap to identif- actions to i,pro1e their
suppl- net.or( capabilities.
Overview
ey !indings
2 Often0 a co,pan-3s centrali4ed sourcin) or)ani4ation has poor cross5functional
ali)n,ent. 6i,ited collaboration bet.een plannin)0 sourcin) and ,anufacturin)0
coupled .ith co,petin) functional ,etrics0 hinders opti,i4ed suppl- net.or(
responses.
2 *ost industrials are in the earl- sta)es of sales and operations plannin) (S7O+)
,aturit-. Their suppl- responses are not s-nchroni4ed .ith de,and forecasts and
are reacti1e to chan)es in sales re8uests or custo,er orders.
2 Suppl- chain plannin) (S9+)0 production plannin) and e/ecution s-ste,s are not
inte)rated0 and are dri1en pri,aril- b- spreadsheets0 leadin) to disparate data and
process inefficiencies.
2 Industrials ha1e co,ple/ product portfolios and suppl- chains .ith lon) lead ti,es.
*an- are tr-in) to find the ri)ht balance of a centrali4ed and decentrali4ed
or)ani4ational structure to ,ana)e the co,ple/it- .hile still re,ainin) custo,er5
focused.
Reco""endations
2 :ssess -our current capabilit- a)ainst the se1en di,ensions of de,and5dri1en 1alue
net.or( (';) e/cellence to deter,ine the )aps and to plot -our suppl- chain
,aturit- road ,ap (see <:ssess -our Suppl- 9hain *aturit- =sin) the Se1en
i,ensions of '; >/cellence<).
2 >stablish a centrali4ed sourcin) or)ani4ation that enables collaboration across
functions0 and .ith re)ional and plant5specific tea,s. ecentrali4ed plants should
use local procure,ent tea,s to ensure local e/ecution o.nership.
2 Opti,i4e -our suppl- chain response b- usin) product 1elocit- and actual sales
pattern anal-sis to deter,ine the ri)ht suppl- strate)-0 such as ,a(e to stoc(
(*TS)0 or asse,ble to order (:TO)0 confi)ure to order (9TO)0 en)ineer to order
(>TO) or desi)n to order (TO).
2 e1elop )o1ernance processes and shared ,etrics that brea( do.n the functional
silos (such as sourcin)0 inbound lo)istics0 production plannin) and ,anufacturin))0
and enable collaborati1e processes0 such as S7O+.
#a$le of %ontents
:nal-sis
&uture State
9urrent State
6i,ited 9ollaboration :cross &unctions and Suppl- ;et.or(s
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&i)ure 1. Strate)ic ?oad *ap O1er1ie. for Suppl- ;et.or(s *ana)e,ent
in Industrials
&i)ure 2. Strate)ic ?oad *ap Ti,eline for Industrial Suppl- ;et.or(s
I,,ature S7O+ :cti1it- ?esultin) in @ea( Aalancin) Aet.een e,and and
Suppl-
6i,ited =se of Inte)rated IT S-ste,s
Siloed0 &unctional *etrics
=nderde1eloped Infrastructure in >,er)in) *ar(ets
+roduct and Suppl- ;et.or( 9o,ple/it-
"ap :nal-sis and Interdependencies
*i)ration +lan
Bi)her +riorit-
*ediu, +riorit-
6o.er +riorit-
"artner ?eco,,ended ?eadin)
&ist of !igures
'nalysis
-na,ic chan)es in international ,ar(ets are i,pactin) suppl- chain strate)ies of
industrial ,anufacturin) co,panies (see ;ote 1). +roducts can be hi)hl- confi)urable0 and
custo,ers ha1e hi)h e/pectations of custo,i4ation and short lead ti,es. Bo.e1er0 in ,ost
cases0 products .ithin business units are sourced and ,anufactured to the sa,e ser1ice
le1el0 usin) a <one si4e fits all< approach. 'olatile de,and0 increased product co,ple/it-
and co,panies see(in) re1enue )ro.th in e,er)in) ,ar(ets are dri1in) industrial suppl-
chains to ,o1e a.a- fro, this approach and beco,e ,ore de,and5dri1en. 9o,panies are
e1ol1in) fro, a strate)- that is focused on cost and efficienc- to a pull5dri1en0 custo,er5
oriented one.
Industrial suppl- chains can be hi)hl- co,ple/0 .ith hi)h5,i/ products0 1ertical
inte)ration0 lon) lead ti,es and fre8uent chan)es fro, order to product desi)n. These
co,ple/ities0 to)ether .ith their t-picall- decentrali4edCsiloed functional or)ani4ation
structures0 ,ean the- face the follo.in) internal and e/ternal challen)es that hinder
suppl- chain perfor,ance and profitable )ro.th!
2 6i,ited collaboration across functions and suppl- net.or(s
2 I,,ature S7O+ acti1it-0 resultin) in .ea( balancin) bet.een de,and and suppl-
2 6i,ited use of inte)rated IT s-ste,s
2 Siloed0 functional ,etrics
2 =nderde1eloped infrastructure in e,er)in) ,ar(ets
2 +roduct and suppl- net.or( co,ple/it-
@e ha1e identified ei)ht specific areas in suppl- chain )o1ernance0 suppl- operations0
net.or( desi)n and best5practice capabilities that industrial co,panies ,ust focus on to
address the abo1e5,entioned )aps!
2 Inte)ratin) and ali)nin) perfor,ance ,etrics to business obDecti1es
2 >stablishin) a centrali4ed sourcin) or)ani4ation0 and collaboratin) .ith re)ional and
plant5specific tea,s
2 >nablin) supplier collaboration across the net.or(
2 Operatin) centers of e/cellence (9O>s) to dri1e collaborati1e best practices and
opti,i4ation across the suppl- net.or(
2 :chie1in) inte)rated sourcin)0 procure,ent0 and ,anufacturin) plannin) and
e/ecution s-ste,s
2 >nhancin) 1isibilit- across )lobal suppl- net.or(s
2 *ana)in) suppl- chain ris(
2 ?educin) suppl- chain and product co,ple/it-
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This research e/plores these actions and their i,pacts0 as .ell as ho. industrial
co,panies can prioriti4e actions to ,o1e fro, their current state to their desired future
sta)e (see &i)ure 1).
!igure 1( Strategic Road Map Overview for Supply Networks Manage"ent
in Industrials
Source) *artner +Octo$er 2013,
!uture State
Industrial co,panies .ill establish or)ani4ational structures0 processes and capabilities to
effecti1el- s-nchroni4e their end5to5end suppl- net.or(s. 9o,panies .ill ha1e established
the follo.in)!
2 Integrated and aligned perfor"ance "easure"ent -9o,panies3 sourcin)0
procure,ent0 inbound lo)istics and ,anufacturin) (e- perfor,ance indicators
(E+Is)0 such as in1entor- da-s (such as ra. ,aterials0 .or( in pro)ress and in5
transit)0 cost to deli1er or total operations costs as a percenta)e of re1enue0 .ill be
ali)ned to o1erall business obDecti1es. *etrics .ill be cross5functionall- ali)ned to
resol1e conflicts that isolate these functions into co,petin) siloes.
2 %entrali.ed sourcing organi.ation structure - Sourcin) .ill be centrali4ed
across re)ions andCor plants to enable collaboration .ith re)ional and plant5specific
tea,s. The procure,ent acti1it- .ill re,ain decentrali4ed .ith plant5le1el
o.nership.
2 Supplier colla$oration ena$led across t/e network -+roduction0 sourcin) and
inbound lo)istics .ill share forecast and plannin) infor,ation0 .hich .ill help build
cross5functional collaboration and s-nchroni4e suppl- net.or( acti1ities. 9onsensus
de,and plans0 in support of production plans and schedules0 .ill be shared .ith Tier
1 suppliers and lo)istics pro1iders. The- .ill acti1el- ,onitor supplier hubs or
portals0 and interact0 as needed0 to ensure ti,el- deli1eries of 8ualit- products and
ser1ices.
2 Operating %O0s -9O>s0 co,posed of suppl- ,ana)e,ent e/perts across
functional areas0 .ill help define the ri)ht suppl- chain strate)-. The- .ill increase
and le1era)e spend under ,ana)e,ent0 and i,ple,ent procure,ent shared
ser1ices. 9O>s .ill support the or)ani4ation in i,ple,entin) collaborati1e best
practices0 ,etrics and opti,i4ation efforts across the suppl- net.or(0 pro1idin)
)uidance and assistance to business units and di1isions.
2 Integrated sourcing1 procure"ent1 and "anufacturing planning and
e2ecution syste"s -Industrial ,anufacturers .ill ha1e strea,lined and
standardi4ed their processes0 and inte)rated S9+ and suppl- chain e/ecution (S9>)
s-ste,s. This .ill )i1e the, the abilit- to 8uic(l- respond to unplanned e1ents.
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The- .ill be able to replan their suppl- response 8uic(l- and release the ne. plan
into production.
2 3isi$ility across glo$al supply networks - =pstrea, suppl- chain and
operational 1isibilit- .ill enable co,panies to effecti1el- capture and anal-4e suppl-
chain infor,ation in near real ti,e0 and plan actions to deli1er profitable responses.
2 Supply c/ain risk "anage"ent +S%RM, progra"s - Suppl- net.or( partners
and ship,ent flo.s .ill be acti1el- ,onitored for potential disruption e1ents andCor
tri))ers. ?esponse actions .ill be de1eloped0 practiced and re1ie.ed0 as needed.
2 Reduced supply c/ain and product co"ple2ity - Industrial ,anufacturin)
co,panies .ill use supplier rationali4ation across the enterprise to consolidate
spend0 and to build supplier capabilities to enable responsi1eness to capacit- and
1olu,e 1olatilit-. +roduct portfolio opti,i4ation techni8ues0 such as product 1elocit-
anal-ses0 .ill be used to address co,ple/it- in operations.
%urrent State
The current state of industrial ,anufacturers3 suppl- chains is characteri4ed b- the
follo.in)!
&i"ited %olla$oration 'cross !unctions and Supply Networks
*ost industrial co,panies toda- ha1e ,ature0 but siloed0 functional capabilities. Internall-0
sourcin) and procure,ent tea,s are ,ana)in) bu-5side costs efficientl-0 and in1entories
are controlled at indi1idual locations. >/ternall-0 the lo)istics )roup is successfull-
,ana)in) deli1eries. Bo.e1er0 toda-3s d-na,ic business en1iron,ent de,ands e/tensi1e
collaboration F internall- fro, product desi)n to suppl- e/ecution0 and e/ternall- fro,
Tier 1 suppliers (see <eli1er Substantial 'alue b- Auildin) the ?i)ht Supplier
?elationships< ). @hat is ,issin) is the s-nchroni4ed effort that .ill consistentl- produce
an end5to5end0 profitable suppl- response.
I""ature S4O5 'ctivity Resulting in 6eak 7alancing 7etween De"and
and Supply
:lthou)h leadin) industrial co,panies are doin) )ood .or( on supplier de1elop,ent and
relationship ,ana)e,ent0 the lin( bet.een de,and and suppl- s-nchroni4ation re,ains
.ea( as ,an- co,panies stru))le to deli1er a consistent0 ti,el- and profitable response
to de,and. Suppl- plannin) and anal-sis are spreadsheet5 andCor paper5based0 and done
independentl- fro, production plannin). :li)nin) ,etrics and adoptin) cross5functional
processes0 such as S7O+0 .ill help industrials reduce the )ap bet.een suppl- plans and
de,and (see <S7O+ Aasics for Those on a %ourne- to Suppl- 9hain +lannin) *aturit-<).
&i"ited 8se of Integrated I# Syste"s
The use of >?+ is .ell5rooted in ,aterials and ,anufacturin) plannin)0 as .ell as
e/ecution functions0 but industrials are not le1era)in) IT sufficientl-. IT s-ste,s help
enable standardi4ed sourcin)0 procure,ent and ,anufacturin) processes0 but ,a- not be
inte)rated .ith data architecture0 .ith ter,s and infor,ation consistent throu)hout the
enterprise. In ,an- instances0 supplier data is out of date0 posted under 1aried ter,s (for
e/a,ple0 lb.0 lbs. or pounds) or incorrect. *aster data ,ana)e,ent (**)0 ,anufacturin)
e/ecution s-ste,s (*>S)0 supplier collaboration tools and )lobal suppl- net.or( 1isibilit-
are critical for suppl- chain efficiencies. Industrial co,panies ,ust use inte)rated S9+CS9>
s-ste,s to ,aster these capabilities.
Siloed1 !unctional Metrics
*etrics are nu,erous0 but focused .ithin indi1idual functions .ith little ali)n,ent across
functions. This can create internal conflicts0 and hinder collaboration across plannin)0
sourcin)0 lo)istics and ,anufacturin) functions.
8nderdeveloped Infrastructure in 0"erging Markets
The de,and )ro.th for industrial co,panies is shiftin) fro, de1eloped to e,er)in)
,ar(ets. Suppl-in) de,and for products and ser1icin) after,ar(ets in these re)ions are
bi) challen)es due to li,ited infrastructure and resource constraints. "artner research
sho.s that ,ost industrials ha1e not -et ali)ned their suppl- net.or(s to support uni8ue
re8uire,ents0 .hich ,a(es their suppl- chains less responsi1e (see <9onsider Three Ee-
:spects @hen Auildin) Gour >,er)in)5*ar(et Suppl- 9hain Strate)-<).
5roduct and Supply Network %o"ple2ity
Industrial supplier net.or(s tend to be co,ple/ and ,ultila-ered0 )i1en the di1ersit- in
products and channels. :dditional co,ple/it- occurs .ith decentrali4edCsiloed
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or)ani4ational structures0 as .ell as .ith )ro.th b- ,er)er and ac8uisition (such as
additional plant locations0 products and ,ar(ets). 9o,ple/ product desi)ns and processes
ha1e a direct i,pact on suppl- net.or( co,ple/it- and response strate)ies0 such as
postpone,ent. e,and 1olatilit- and chan)in) custo,er e/pectations add and create
further challen)es for industrial co,panies as the- stri1e for re1enueCprofit )ro.th.
On one hand0 this is dri1in) the need for enhanced collaboration across the net.or( to
respond 8uic(l-. On the other0 it3s de,andin) si,pler product desi)ns and ,anufacturin)
processes0 as .ell as fle/ible suppl- net.or(s0 to facilitate a speed- response. "round5
le1el i,ple,entations dri1in) si,plicit- are ,issin) in ,ost or)ani4ations.
*ap 'nalysis and Interdependencies
*an- enterprises cannot effecti1el- ,ana)e their suppl- chains and infor,ation because of
the deficiencies in the follo.in) areas!
2 6i,ited collaboration across functions and suppl- net.or(s
2 6i,ited capacit- and 1olu,e5plannin) infor,ation shared .ith Tier 1 suppliers
2 Infor,ation sharin) hindered across sourcin)0 procure,ent and production due to
siloed functional or)ani4ations
2 6ocal or functional cost opti,i4ation ,odelin) used rather than suppl- net.or(
opti,i4ation
!or 9I""ature S4O5 'ctivity Resulting in 6eak 7alancing 7etween De"and and
Supply9)
2 Suppl- net.or( responds to orders and chan)es in orders b- pushin) in1entor- up
or do.n the suppl- chain.
2 Suppl- plannin) is dri1en b- sales forecasts0 .ith li,ited use of S7O+ processes to
balance capacit-0 resources and in1entor-.
!or 9&i"ited 8se of Integrated I# Syste"s9)
2 Suppl- plannin) is done .ith spreadsheets0 .ith little or no reconciliation .ith
de,and forecasts.
2 *ultiple s-ste,s of record (SO?s) and no unified ** pre1ent <one 1ersion of the
truth0< addin) co,ple/it- to suppl- net.or(s and plannin) (see ;ote 2).
2 6ac( of inte)rated S9+ causes ,isali)n,ent bet.een production plans and hi)her5
le1el plans.
2 *>S infor,ation is not shared .ith suppl- chain. +roduction e/ecution infor,ation is
site5specific.
!or 9Siloed1 !unctional Metrics9)
2 Ee- perfor,ance ,etrics are not ali)ned across sourcin)0 procure,ent0 inbound
lo)istics and ,anufacturin) functions0 aidin) and possibl- increasin) the present
)ap bet.een suppl- and de,and acti1ities.
2 &unctional ,etrics not ali)ned .ith finance or sales ,etrics0 further )eneratin)
reacti1e suppl- responses.
!or 98nderdeveloped Infrastructure in 0"erging Markets9)
2 6ac( of a)ilit- in suppl- and ,anufacturin) functions in respondin) to chan)in)
costs0 le)islation0 and ,ar(et ris(s and disruptions.
2 Suppl- net.or(s are inade8uatel- prepared to ,eet uni8ue channel and ser1ice
re8uire,ents.
!or 95roduct and Supply Network %o"ple2ity9)
2 *a(e to order (*TO)0 *TS0 :TO and asse,ble to stoc( (:TS) suppl- net.or(s ha1e
e1ol1ed separatel- into co,ple/ suppl- chains .ith ,ultiple functional
or)ani4ations.
2 ;u,erous product desi)n and en)ineerin) chan)es cause ripple effects in
operations and upstrea, to supplier tiers.
2 +roduct 1ariet- and the lac( of part5le1el standardi4ation increase sourcin) and
,anufacturin) co,ple/it-0 and procure,ent lead ti,es.
Migration 5lan
Suppl- net.or( leaders should start b- prioriti4in) ei)ht areas o1er the ne/t three -ears!
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Integrating and aligning performance metrics to business objectives
Establishing a centralized sourcing organization
Enabling supplier collaboration across the network
Investing in or enhancing COEs
Achieving integrated planning and execution sstems
Enhancing visibilit across global suppl networks
!anaging suppl chain risk
"educing suppl chain and product complexit
#he actions in $igure % appl generall to industrial manufacturers& 'owever( the needs of
individual organizations ma cause priorities to differ& $or example( )CE integration
changes ma become urgent for an organization that wants to optimize online interactions
with its suppl network&
Figure 2. Strategic Road Map Timeline for Industrial Supply Networks
Source: Gartner !cto"er 2#$%&
'ig(er )riority
'igh*priorit projects can deliver strong business value( and suppl chain leaders should
start work on them right awa&
For *Integrate and +lign )erformance Metrics to ,usiness !"-ecti.es*:
Align metrics for sourcing( procurement( inbound logistics and manufacturing
functional areas to create accountabilit& Ensure standardized definitions of these
metrics across functions( and use them to make the right trade*offs to enhance
customer service and deliver value to the customer +see ,#he 'ierarch of )uppl
Chain !etrics- .iagnosing /our )uppl Chain 'ealth,0&
1se data captured from current sstems 2 E"3( )C3( )CE or !E) 2 for
performance measurement and reporting& 4here needed( add 5ualifing information
and comments( such as plant shutdown or hurricane disruption( to supplement
reports&
)hare performance information regularl using standardized supplier performance
scorecards& Identif and work collaborativel to bring about improvements in 5ualit
and on*time performance( driving continuous improvement and innovation&
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For */sta"lis( a 0entrali1ed Sourcing !rgani1ation*:
Establish a centralized sourcing organization& Collaborate across functions at
regional and plant*specific sites to improve planning and spend management&
4ithin the organization( use dedicated sourcing teams to manage complex products
and product groups&
6eep plant*specific procurement decentralized at the local or regional ownership
level&
Continue sourcing cost reduction efforts with bottleneck suppliers 2 that is( those
that have little profit impact on ou( but a high suppl risk& 7uantif the supplier
risk to better understand which mitigation strateg to use& /ou ma choose to add
buffer inventor or expend time and resources in supplier development activities&
1se consensus demand plans( developed with )8O3( to balance suppl( inventor
and demand more effectivel&
For */na"le 0olla"oration 2it( Suppliers*:
)hare consensus demand plans( in support of production plans and schedules( with
#ier 9 suppliers and logistics providers&
"e5uire suppliers to activel monitor supplier hubs or portals so that the are
responsive to changes& Interact( as needed( to ensure timel deliveries of 5ualit
products and services&
For *)repare for Integrated S0)3S0/ Systems*:
Initiate a program to establish master data governance( and standardize and clean
supplier( product and customer master data& Establish data 5ualit metrics that will
flag broken or dirt data& Institute an !.! governance polic with clear lines of
responsibilit and authorit( including configuration management&
Implement tools such as secure portals or supplier hubs to share information and
improve collaboration efforts&
Medium )riority
!edium*priorit projects ma take more time and resources to create value&
For *In.esting in or /n(ancing 0!/s*:
Establish a permanent suppl management COE with suppl chain and
manufacturing process experts& #he COE will promote and support suppl network(
inbound logistics( and manufacturing best practices( process and performance
improvements( and leading trends& #he COE will gain and share insights from inside
and outside the compan-
1se the COE to develop standardized sourcing( procurement( and
manufacturing processes and governance for common execution practices(
such as product orders( compliance for 5ualit( and e5uipment management
and maintenance&
1se the COE to increase and leverage spend under management& )trategic
and local business units buing locall use COE*managed agreements&
Centrall managed agreements will help resolve operating under conflicting
metrics&
.esignate the COE as lead on sharing and communicating suppl and
manufacturing information on enterprise best practices&
#eam with other strategic business*unit COEs within the enterprise to ensure
sourcing( procurement alignment with business objectives( strateg and
initiatives&
$or industrials that alread have COEs-
:enchmark against other industries( as well as the competition& Continue to
bring new ideas and innovation into the organization&
As metric targets are reached( raise the targets( and revise the metrics and
guidance accordingl&
4ork with I# to create ,procurement shared services, that include all the tools to be
used b suppl management staff&
For */n(ance Integrated S0)3S0/ Systems*:
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.etermine which technologies to use( and streamline sstems so that there is one
)O" across suppl chain functions& )tandardize sourcing( procurement and
manufacturing processes across the enterprise&
Implement an integrated )C3 and )CE sstem( leveraging !.!& Analze data to
refine near*term and midterm plans&
For */na"le 4isi"ility +cross Glo"al Supply Networks*:
)hare suppl and manufacturing forecasts( demand plans( and production schedules
internall&
3ost production plans( consensus demand plans and changes online( with alert
actions for re5uired stakeholders&
1se dashboards to provide up*to*date statuses of sourcing( purchase orders(
inventor levels( manufacturing schedules( and supplier deliver schedules and
receipts& "eports( information and actions are set up for the appropriate user&
1se the data to monitor purchase orders and outbound shipments( and take
proactive action in near real time&
For *5e.elop and ,uild an S0RM Strategy*:
Identif potential suppl chain disruptions and impacts on our suppl chain( #ier 9
suppliers and production& .etermine our compan;s risk tolerance level&
Identif suppliers 2 from multitier to #ier <& Identif critical suppliers and critical
products&
7uantif suppl chain risk with a simplified value*at*risk measure to understand the
worst*case scenarios from various suppl chain disruptions +see ,=ump*)tart /our
)uppl Chain "isk !anagement Initiatives,0&
.evelop )C"! plans to remove( transfer or mitigate risk& $or scenarios that exceed
our compan;s risk tolerance( make appropriate investments to make our suppl
chain more resilient( such as securing extra capacit or contracting with alternative
suppliers&
6ower )riority
>ow*priorit projects can la a foundation for further initiatives that will give enterprises a
lasting competitive advantage in the long term& Alternativel( the ma simpl appl these
actions to a narrow area&
For *Reduce Supply 0(ain and )roduct 0omple7ity*:
"ationalize the suppl base( and optimize suppl planning b region( product and
manufacturing strateg&
In emerging*market sourcing( use local expertise in logistics( manufacturing( 5ualit
and "8. to enhance collaboration with suppliers& 1se local teams to monitor
regulation( political and labor situations&
Identif customer segments of !#)( A#O( C#O and E#O b their different market
re5uirements& 1se suppl cost?capabilit information and demand drivers when ou
are deciding which production strateg to use it and when +see ,)egmentation
)trateg for !anufacturing Operations,0&
@roup products into standard and custom configurations based on their bill of
materials +:O!0 structures and demand volume& $or example( use pareto analsis
to group the top ABC in volume as ,standard, and the balance as ,custom,
configurations& !anage custom products as !#O or A#O& Consider modeling E#O
and C#O responses as well&
>ook to standardization and modularization opportunities across our product
portfolio b doing :O! analses&
:uild a process to manage the ,end of life, of a product;s life ccle& "eview our
product portfolio for low*selling products that ma be near retirement&
For *Manage t(e S0RM )rogram*:
"eview and incorporate suppliers; contingenc management plans that support our
operations& "evise plans annuall with current updates from suppliers& 4ork
together to identif and minimize risks&
Consistentl monitor( activel manage and be proactive in )C"! actions in
preparation for potential suppl chain disruptions& 4ork collaborativel with our
suppliers to be prepared to take action as needed&
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Gartner Recommended Reading
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,1se the 'ierarch of )uppl !anagement !etrics for )trategic Alignment and Enhanced
3erformance,
,1se 3ortals to .rive Disibilit and Improve )upplier Collaboration,
,.efine )uppl Chain #ransformation to Align "e5uired "esources,
,"efine /our !anufacturing )trategies to .rive Dalue $rom Emerging !arkets,
,!ultiple 3rocesses( 3artners and .ata Objects !ust :e Considered to Obtain :enefits
$rom )uppl Chain Disibilit,
Note $
5efinition of Industrial Manufacturing 0ompanies
@artner defines industrial manufacturing companies as asset*heav manufacturing and
construction industries( including mechanical( electrical and electronic e5uipment companies(
as well as their contract manufacturers&
Note 2
)ace 6ayering and Multiple S!Rs
@artner has identified critical suppl chain capabilities along the demand*driven value
network +..D<0 journe to orchestration& Companies progress b enabling these capabilities
in laers rather than simultaneousl& :usiness process( technolog and talent must follow
the same evolution&
,3ace laering, means creating an application strateg that can adapt& #his can be useful for
changing business needs over time& #he application strateg addresses the gap between the
business users of enterprise applications and the I# professionals who are charged with
providing those applications&
)O"s are applications that make up an organization;s sstems of record& #he tpicall
support administrative and transaction*processing activities( such as finance( '"( asset
management( core banking or procurement&
$or more on this( see ,'ow to @et )tarted 4ith a 3ace*>aered Application )trateg, +note-
this document has been archivedE some of its content ma not reflect current conditions0&
F %B9G @artner( Inc& and?or its Affiliates& All "ights "eserved& "eproduction and distribution of this publication
in an form without prior written permission is forbidden& #he information contained herein has been obtained
from sources believed to be reliable& @artner disclaims all warranties as to the accurac( completeness or
ade5uac of such information& Although @artner;s research ma discuss legal issues related to the information
technolog business( @artner does not provide legal advice or services and its research should not be
construed or used as such& @artner shall have no liabilit for errors( omissions or inade5uacies in the
information contained herein or for interpretations thereof& #he opinions expressed herein are subject to
change without notice&
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