Redesigning Your Supply Chain: Common Obstacles and Focus Areas for Success

Given the current global trade and regulatory environment, Gibson has seen core trends with global manufacturers over the past few years.  There has been a greater emphasis on supply chain flexibility versus simple cost-reduction savings which has companies rapidly looking for new supply and manufacturing footprint strategies to be more nimble and closer to support key customers by region.  This has been greatly caused by the trade/tariff environment between the US and China, increasing labor costs in China, rising logistics costs globally and emphasis on last-mile delivery management or JIT inventory management solutions.

The global pandemic has accelerated the necessity for these efforts.  Many CEOs are now focusing on supply chain as strategic corporate initiatives to uncover operational savings but also to mitigate supply chain risk and establish more control over their supply chain end-to-end.  It is important to balance the time to move or change your supply chain with a detail, data-driven approach.  We have seen many global companies struggle to implement changes due to short-cutting the analysis to determine the best path forward.

At Gibson, we have seen these themes consistently across our clients.  Determining supply chain strategies to match these core areas is key during these unprecedented times, there are many obstacles and costs that are often overlooked:

1. Tooling considerations (transfer tooling vs. new tooling vs. dual-tooling)
2. Logistics Network Optimization
3. Cost to onboard and approve new suppliers
4. Undocumented specifications or supplier owned drawings (black magic)
5. New Product Introduction and Rapid Prototyping
6. Validation and testing
7. Manufacturing location (Greenfield, Brownfield, JV, Maquiladora, Vertical Integration, etc.)
8. Bill of Material Management and Localization
9. Service Part Management
10. Low volume, high mix product tail analysis

In order to best account and mitigate these factors, Gibson has found executing an end-to-end supply chain diagnostic as the best starting point for laying out a strategic supply chain roadmap for the next 3 to 5 years.  Gibson takes an independent, non-biased approach which has helped achieve over $10B+ in bottom-line operational savings for our clients over the past 40 years.  We have found time after time that a short-cut approach will cause a lot of pain and costs during the execution of the new strategy(s).  Gibson utilizes line-item level data, detailed Strategic, Operations, Organization and Systems cross-functional interviews to develop a customized roadmap and determine the bottom-line and operational impact to our clients.

To further assess your supply chain opportunity and risk, please contact Jonathan Volta at:

jvolta@gibson4.com