Sustainability starts with process optimization

Establishing a sustainable supply chain requires a solid and stable corporate foundation – a foundation that enables all processes to be designed or optimized, making sustainable action a reality.

Stakeholders are increasingly demanding sustainable supply chains. But embedding sustainable values within companies involves more than simply setting out values, targets, and strategies for economically, environmentally, and socially sustainable conduct throughout the supply chain. Establishing a sustainable supply chain requires transparent support for stakeholders’ needs and for diverse flows of information, materials, and values – as well as integrating processes so that they are fit for the future. The goal here is to avoid limiting the company’s ability to act. Sustainable action should maintain delivery capability and flexibility, cut costs, and meet customers’ expectations.

How exactly do successful companies put these requirements into practice?

To be effective, approaches to transformation initiatives of this kind need an integrated, end-to-end, and agile project methodology. What’s more, they require a team that can support the project from strategic development to process optimization – right through to implementation in the various IT systems involved. When implementing systematic supplier management, it is important to consider all the necessary strategic and operational information. This includes business volume, production processes deployed, quality criteria, infrastructure, complaints, and production efficiency. And it is also important to ensure that implementation is technically feasible. In light of global logistics concepts, it is also vital for management to rethink its approach, taking new processes like hub and spoke, cross-docking, consignment consolidation, and direct shipment into account.

Sustainable supply chain – from vision to transformation

To first make these complex processes transparent and then optimize them, five central challenges have to be considered if transformation projects of this kind are to succeed:

  • Complexity: Content, scheduling or regional requirements, and diverse future scenarios can lure companies into the “complexity trap.”
  • Moving targets: Although requirements and targets are constantly changing and evolving, one expectation remains constant – rapid achievement of a high degree of maturity.
  • Standardization versus customization: IT departments want standardization; user departments want specialization. These demands initially clash. The aim is to strike a healthy balance between them in line with the 20/80 rule.
  • Coexistence management: During roll-out there is simply no choice – you have to manage parallel operation of processes, systems, and infrastructures.
  • Change management: Last but not least, attention must be given to ensuring that the specialist departments are involved and that they accept the changes.

Traditional IT implementation methodologies demonstrably fail to master these challenges. An end-to-end integrative approach during the project helps tackle them head-on.

The KPS Rapid-Transformation® Method is designed to manage complex transformation strategies of this kind across all corporate divisions. It incorporates all processes, systems, and infrastructures – in other words, the entire supply chain. Security of supply and maximum flexibility are key to establishing a cost-optimized, sustainable supply chain and effectively securing long-term competitiveness. The KPS method offers an integrated and holistic approach to achieving this, ensuring a smooth transition from strategy definition to process modeling – right through to implementation in the right system environment. Unlike with conventional methodologies, where individual phases are initially worked through sequentially (waterfall approach), potential errors and adjustments can be identified at an early stage.

The KPS method uses the simultaneous engineering approach – a prototypical procedure that can be deployed irrespective of industry. One great benefit of the method is that it cuts costs and saves time because it eliminates tasks such as the time-consuming blueprint phase, in other words analyzing the legacy system and describing the concepts.

Procedures can be translated directly into end-to-end processes, enabling staff, users, and companies to see at an early stage just what future process chains will look like. In contrast to other approaches, it also shows how these stakeholders can become actively involved in defining these chains. This enables problems to be spotted more rapidly, allowing them to be resolved faster. In addition, the users affected benefit from early familiarization with the new systems and change processes.

Transformation projects are often delayed or even fail because staff are not brought on board in good time. The change management tools provided by KPS Change Laboratories are leveraged to validate change processes and train employees, enabling them to pass on their knowledge and information to other colleagues. Continually integrating the specialist departments in this way enables the test and implementation phases to kick off sooner, significantly reducing project duration, and saving the company money.

Once the new processes and systems are in place within the existing structures, the company has a solid and flexible foundation. As a result, it can respond rapidly to changes in the market. In a next step, specific supply chain management processes can be added or optimized. The environmental, social, and economic factors considered at this stage have already been defined in advance. Companies find it easier to move toward a realistic, sustainable supply chain only if their processes have already been integrated and automated.