Insight

Supply Chain as a ServiceThe Promise of a Virtual, On Demand, Innovative, and Scalable Supply Chain

Cloud computing allows companies to reduce their upfront capitalexpenditures on servers while simultaneously delivering ongoingflexible computing power, server management, maintenance andreplacement. Innovative companies such as Rackspace offer aplethora of IT solutions across multiple cloud providers to effectivelysupport and manage applications from website hosting to email. Similarly, Supply Chain as a Service offers companies a new flexible service model toattain virtual economies of scale day one without the upfront investment in people,processes, and equipment. Supply Chain as a Service is an innovative new approach tosupply chain that allows companies to generate a 4-5x return on investment bypartnering with one service partner to support all or part of their supply chain needsincluding procurement, production control, manufacturing, quality, warehousing, andlogistics. Companies that llogistics. Companies that leverage Supply Chain as a Service realize lower and variablecost structures, leverage proven technology and systems, and attain instant scalability.

Supply Chain as a Service could solve multiple business problems in a single offeringand help create a more demand-driven environment, which allows companies toadjust more quickly to end customer demand. - Institute for Supply Management

ChallengesCommercializing a product is challenging whether youare a startup or established company and theaccelerating speed of product innovation requiredacross industries is staggering.

A growing group of leading-edge companies are reevaluating theirbusiness models and partnering with industry functional operationsleaders in manufacturing, procurement, production control, quality,warehousing, and logistics to bring their products to market.

Unfortunately, these varied and disconnected functional approachescan quickly become overwhelming and unwieldy for many companies.Growing companies need more flexible resources and processes thatare much different than larger established companies. The ability toflex resources, adapt quickly, and focus on specific supply chaindisciplines are all requirements for world-class supply chainmanagement.management.

In order to remain competitive, growing businesses will need topartner with end to end supply chain solutions providers in order togain the cost structure, technology and systems, and scale of theirlarger competitors.

What is Supply Chain as a Service?Supply Chain as a Service is a virtual supply chain team enabled bycloud software that supports all or part of a company’s supply chainoperations. A virtual Supply Chain as a Service team partners with acompany’s existing team to execute procurement, production control,manufacturing, quality, warehousing, and logistics projects or dailyoperations. Supply chain functional experts at third-party servicepapartners are leveraged based on a company’s unique needs, scalingwith companies as they grow. Companies can utilize previouslyunattainable blends of professional skillsets and experience levelsas needed during complex projects instead of recruiting andonboarding one specialized staff member.

Supply Chain as a Service offers companies end-to-end supply chainmanagement services from strategy to product delivery, freeing upvaluable company time to focus on customers and new productdevelopment.

Ways to realize value now

1. Project Test Case. Smaller projects or new products offer excellent low risk test cases for Supply Chain as a Service to prove model results to senior leadership.

2. Internal Buy-In. Spend time explaining short and long term goals with your internal team to ensure full support and to generate the best results.

3. Technology Synergies. Supply Chain as a Service providers have software tools that often generate better task status visibility than is currently available from internal teams, adopting these best practice tools for internal projects can further dive efficiently.

5. Staffing Mix. Adjust internal staff mix to support core ongoing business supply chain needs and utilize Supply Chain as a Service for supply chain need spikes to realize the most savings.

4. Subject Matter Expert. Bring in subject matter experts to develop and implement processes your internal team can then manage as opposed to spending valuable resources working to learn new challenging skill sets from scratch.

Innovation

Think BIG. Minimizing risk whilemaximizing reward is a criticalpractice when it comes tooptimizing your supply chain.– APICS

SolutionsStep 1. Realize Lower & Variable Cost Structure Supply Chain as a Service offers companies a lower and variable cost structurecreating a commercial competitive advantage. Experienced talent is scarce andcompanies are finding that Supply Chain as a Service provides low cost access totalent with direct experience solving specific problems. Companies are acquiringaccess to more senior talent at a lower cost than hiring a full-time resource byutilizing Supply Chain as a Service part-time combinations of senior and juniorrresources that equate to one full-time resource. This results in a 50% reduction instaffing costs by utilizing Supply Chain as a Service to support periodic spikes insupply chain need. Supply chain need spikes from strategic projects, like supplybase building for a new plant, are well suited for Supply Chain as a Service.Companies that leverage Supply Chain as a Service can quickly improve theircompetitive commercial position by adopting a lower and variable cost structure.

Step 2. Leverage Proven Technology & SystemsSAE recognized Supply Chain as a Service as the most disruptive technologyinnovation at the 2016 SAE World Congress for its demonstrated results in theautomotive industry. New software technologies have allowed Supply Chain as aService to support end-to-end supply chain operations, better bridging previousgaps in business process outsourcing offerings that focused on tactical functionswithin supply chain. Supply Chain as a Service’s integrated cloud software andskilled people combination has led skilled people combination has led to new program launch timeline reductions of33% on average. Supply Chain as a Service systems reduce operational executionrisk and create smooth transitions from idea to customer delivery. Our experiencehas demonstrated bill of material costs can be reduced by 15% on average whenestablished systems for supplier quoting and sourcing are utilized. Companiestoday are realizing immense value by tapping into the established proventechnology and systems that Supply Chain as a Service offers.

Step 3. Attain Instant Scalability Global markets can shift quickly so the ability to tap into an external team toquickly expand can position a company to take advantage of market openings.Utilizing periodic incremental support to backfill and augment your internal supplychain team can reduce employee turnover, improve job satisfaction, and enhanceresults. Program launch risk is reduced 25% when gaining instant and perpetualexternal personnel bandwidth. Experienced supply chain professionals can leverageestablished supplier established supplier relationships to double supplier engagement to improvecommercial results. Technical commodity expertise increases product speed tomarket and allows Supply Chain as a Service teams to contribute to the ongoingtechnical product enhancement. Supply Chain as a Service provide companieswith instant scalability by tapping into on-demand external talented supply chainbandwidth as needed to expand rapidly when necessary.

6. Variable Needs. Utilize Supply Chain as a Service for periodic variable supply chain needs, supplier plant audits, supplier quality support are excellent use cases.

7. Process Bandwidth Boost. Specific tasks within supply chain such as supplier identification and qualification are well suited for Supply Chain as a Service and can free up your internal team’s time to focus on other strategic initiatives.

8. Buying Power. Dramatically reduce costs and increase supplier engagement by utilizing Supply Chain as a Service volume buying power and scale.

9. Rapid Response Capability. Implement an as needed 24-hour rapid response support team to manage through sudden industry and economic shifts.

10. New Perspective. Reduce the impact of group think by periodically engaging Supply Chain as a Service teams to review strategies and operations.

Ways to realize value now

Conclusion

Company OverviewAt IndustryStar we are a supply chain services and software technology companythat is passionate about partnering with high growth technology companies to bringinnovative and disruptive technologies to market that will have a positive impact onthe world.

Our experience shows leading companies that are using SupplyChain as a Service for part or all of their supply chain operationalneeds quickly develop a competitive advantage over theircompetition. As with cloud computing, Supply Chain as a Servicedrastically rewrites the business rules of engagement, creatinglower and variable cost structure opportunities for early adopters.Supply Chain as a SeSupply Chain as a Service allows companies to focus on their corestrengths while leveraging proven technology and systems toefficiently bring products to customers. By adopting Supply Chainas a Service, today’s companies develop instant scalability leavingbehind the ramp-up, ongoing operational costs, and hiring ofpermanent staff.

Future ways to realize value

For more actionable insightsfor creating, expanding, and enhancing supply chainoperations, visit our blog atblog.industrystarsolutions.com

industrystarsolutions.com

(734) 794-3072

330 E. Liberty St. Suite 3FAnn Arbor, MI 48104

IndustryStar Solutions LLC

© MMXVII IndustryStar Solutions LLC

William CraneFounder & CEOwilliam.crane@industrystar.com

Dr. Sime Curkovic, Ph.D.Director of Supply Chain Innovationsime.curkovic@industrystar.com

Tony LancioneDirector of Supply Chain Solutionstony.lancione@industrystar.com

Success at high growth technology companies is a result of eective supply chain solutions. To learn how IndustryStar can help,email info@industrystar.com.

Learn More