Gartner opines that supply chain organisations suffer from at last one of three critical organisational design mistakes potentially derailing efforts to achieve desired business outcomes.
Chief supply chain officers (CSCOs) who improve outcomes radically redesign their structure based on their distinct organizational needs, while prioritising balance, strength and speed as key business objectives.
Key Findings
- Importance of Tailored Design: Successful supply chain leaders radically redesign their structures based on unique organisational needs rather than adopting generic solutions. This approach allows them to implement transformational operating models that better serve their business objectives. Alan O'Keeffe, senior director analyst at Gartner, noted, “The commonality between successful organisations is that their leaders intentionally prioritised the organisational goals of balance, strength and speed into their design process”.
- Common Mistakes in Reorganisation:
- Mistake 1: The “Either/Or” approach: Many organisations fall into the trap of choosing between centralised and decentralised models, which can create confusion and performance gaps. Successful CSCOs recognise the need for a balanced approach that integrates standardisation for efficiency while allowing for differentiation to meet unique business needs.
- Mistake 2: Debilitating headcount reduction: Focusing on reducing headcount can jeopardise long-term capabilities by sacrificing critical talent and expertise. Instead, CSCOs should invest in developing skills and fostering autonomy within their teams to enhance organisational effectiveness.
- Mistake 3: The copy/paste approach: Simply replicating organisational designs from other companies can hinder effectiveness. Each organisation has unique characteristics that must be considered. Successful redesigns involve clarifying authority and streamlining decision-making processes to enhance responsiveness to customer needs.
- Recommendations for CSCOs: To avoid these pitfalls, CSCOs should:
- Integrate activities that benefit from standardisation while differentiating those that require customisation.
- Focus on long-term capability development rather than short-term cost savings.
- Design structures that facilitate rapid responses to customer demands and clarify decision-making authority.
O'Keepe says that research findings reveal that the leaders who achieved success took a more radical approach to redesigning their supply chain organisations, resulting in the ability to deliver on new and transformational operating models.
