The absolute focus on “manufacturing excellence” is a dead end. Manufacturing companies invest a lot of time and money to continuously improve the value chain. From planning and production to storage and logistics, many processes and resources are involved that need to be optimally coordinated to reduce costs, improve quality and increase customer satisfaction. Unfortunately, this is often not the case, as companies organize their value chain in silos that work in isolation from each other and have little transparency and communication. This leads to inefficiencies, waste, errors and missed opportunities. In a time characterized by change and disruption, the right strategy is essential for survival.
To meet current and future volatile challenges, companies need a synchronized end-to-end value chain that integrates, harmonizes and optimizes all processes and resources along the entire value chain while remaining resilient. Such a value chain enables companies to react quickly and flexibly to market changes, customer needs and internal requirements by increasing visibility, collaboration and agility in all areas. A synchronized end-to-end value chain with production in focus offers the following benefits:
- Cost savings::By reducing excess inventory, waste, transportation costs, warehousing costs and other operational costs, companies can improve their profit margins and become more competitive.
- Quality improvement:: By improving real-time data quality, minimizing errors, implementing feedback loops and applying continuous improvement measures, companies can increase the quality of their products or services and reduce the complaint rate.
- Customer satisfaction: : By shortening delivery times, increasing delivery reliability, adapting to individual customer requirements and improving service quality, companies can increase customer loyalty and retention and open up new markets.
But if it is so simple, what is preventing companies today from thinking and acting comprehensively? As a rule, each silo is already so busy with its own optimization that there is no time to think outside the box. In our projects, in addition to understanding the problem, a lot of time has to be invested in getting the stakeholders from the adjacent areas on board and ideally even in the target image workshops. This is time well spent for the end result.
So how can a synchronized end-to-end value chain be achieved in the company? Here are some tips and recommendations from successful projects that can help:
- Comprehensive analysis of the existing value chain and identification of weak points that cause inefficiencies, waste or quality problems. Methods such as process mapping, value stream mapping or lean management can be used for this. A 360° supply chain assessment provides all parties involved with a good overall picture.
- Define the targets and key figures for improvement along the value chain. Which specific aspects should be optimized, e.g. costs, quality, delivery time, customer satisfaction or sustainability? Also determine how the success of the measures is to be measured and monitored, e.g. using KPIs, dashboards or reports. These key figures help to determine which overarching data should be collected and evaluated in which data structure. This means that digitalization is not an end in itself, but serves to achieve goals.
- Develop a strategy and action plan for implementation along the value chain. Create a roadmap that describes the individual steps, responsibilities, resources and timelines for implementing your value chain. Possible risks and challenges that may arise and corresponding countermeasures must also be taken into account. With agile approaches, 80% accuracy is sufficient; the details emerge in the development process with the prioritization of measures.
And perhaps the most important thing at the end: put together an interdisciplinary team from all affected departments (the former silos), who take small steps forward in an agile manner to celebrate (small) joint successes. Anyone who has experienced this moment first-hand will never want to go back to his or her silo, but will become an active supporter of tearing down more walls.
Value Chain unlocked 2025
At the “Value Chain unlocked 2025” Strategy & Practice Day on February 27, 2025 in Frankfurt, the Sustainable Supply Chain Practice will show which approaches are already working for well-known global market leaders and how a networked value chain must be set up to meet future requirements efficiently, flexibly and sustainably.
