Navigating Excellence: Sustainability of Supply Chain Performance
With the daily rates of change in competition in various business sectors, the vital role played by supply chains in achieving business objectives has increased. Consequently, companies are attaching great importance to the stability of supply chain performance, given the significance of the supply chain, which has become the backbone of companies’ success in achieving their financial and marketing objectives.
The aim of sustainable supply chains is to increase awareness of the vital role played by supply chain performance in the sustainable success of companies. An effective and consistent supply chain is key to companies’ stability by meeting customer requirements, reducing costs, and achieving operational excellence.
The objectives that companies seek to achieve include:
- Financial targets: Achieving targeted revenues and planned cost rates to reach the required profitability levels.
- Marketing targets: Achieving market share percentages to reach the targeted customer segments or markets where presence is required.
- Operational targets: Achieving stability in executive operational processes that lead, consequently, to achieving financial and marketing targets.
- Development targets: Achieving rates of development and continuous improvement in all financial, marketing, and operational rates continuously.
These objectives may be achieved, but the greatest challenge is sustaining the achievement of these objectives. To achieve the sustainability of companies’ success, especially with the daily changes in business sectors, focus should not only be on executive operations but also on building an integrated performance model that aligns with:
- Long-term company strategy
- Execution strategy, represented in the supply chain strategy
- Company resources, including financial, operational, human, marketing, and technical resources
The supply chain strategy is a roadmap that helps the supply chain team identify the objectives of implementing supply chain activities and expectations. Each successful strategy includes:
- A clear execution plan
- Identifying responsibilities and roles
- Indicators that can measure progress in achieving the objectives
A consistent supply chain strategy represents the strength of the company as a whole. Therefore, stabilizing supply chains not only improves executive performance but also enhances the overall flexibility of the company. Thus, the current competition among companies has shifted from technical and executive competitions to competition in the overall performance of the supply chain.
The Ten Challenges Facing Sustainable Supply Chain Performance:
- The absence of a supply chain strategy description for the company and the lack of directing this strategy to the executive levels.
- Insufficient linkage of supply chain performance indicators with the company’s execution strategy and their reflection on actual execution operations.
- Separating the performance system for the supply chain, without linking the performance rates for the supply chain with the rest of the company.
- The lack of connection between the supply chain performance evaluation system and the overall performance system of the company and its strategic objectives.
- The inability of the supply chain team to provide accurate explanations about the relationship between their activities in the supply chain and the company’s strategy, and the criteria used to assess their performance.
- Not knowing the key axes that affect performance within the supply chains and being satisfied with selecting performance measurement indicators rather than building an integrated performance system.
- The lack of clarity in the connection between strategic and operational planning for the supply chains, and the lack of coherence in objectives across strategic, executive, and operational levels.
- Executing and calculating supply chain performance indicators in executive and technical aspects only in a non-systematic manner without regular reassessment.
- The absence of clear responsibility for implementing the indicators.
- The inability to adapt to the daily changes in the business sector.
Solutions Offered by Sustain Chain for the Sustainability of Supply Chain Performance:
- Analyzing the current performance method and how the supply chain operates.
- Developing and implementing an integrated system for measuring and managing supply chain performance.
- Assisting in formulating a supply chain strategy.
- Developing a system of strategic objectives according to the Balanced Scorecard methodology.
- Evaluating the performance evaluation system and selecting the system that suits the company’s strategic objectives.
- Creating operational performance indicators for different levels of the company’s objectives.
What is the concept of performance?
It is an indicator of the individual’s, management’s, or system’s ability to achieve objectives from results in proportion to the available resources.
What is Booster?
It is a performance analysis system developed by Sustain Chain to analyze how the supply chain management performs its activities and uses specific tools and methods, including an organizational leadership culture that enables the supply chain team to identify the actual capabilities and capabilities of supply chain management that enable them to achieve management objectives and company objectives sustainably. The project focuses on developing the performance of the supply chain team, solving problems that hinder performance sustainability, and attracting effective parties to achieve the target.
How can Booster develop supply chain performance?
- Establishing a comprehensive supply chain performance system.
- Creating 40% – 30% additional capacity after analyzing the performance system.
- Creating an institutional culture for the supply chain, thus improving work results.
- Increasing employee engagement after analyzing their performance methods.
- Identifying the skills that need to be developed.
- Using new work methods to develop performance.