A supply chain target operating model: The foundation for a road to success

Increasing volatility and uncertainty forces companies to rethink their supply chain control model and transform business processes, organizational setup, and digital planning capabilities. To enable advanced levels of planning (solution integrated, data-driven, and with smart automation) it is essential that companies establish or re-define their foundational planning capabilities.

 

Building a solid supply chain foundation

To make sure that transformation initiatives are well aligned with your future supply chain vision, we emphasize the importance of defining an updated target operating model (TOM) at the very start. A target operating model focuses on translating your strategic principles and vision into a concrete operating model for planning and execution of the end-to-end supply chain. In addition, a TOM outlines the maturity of your supply chain focus areas looking at the axes of processes, organization, data, and tools. It’s the ultimate starting point for building a solid supply chain foundation.

Target operating model

 

 

Doing it the EyeOn way

At EyeOn, we have consolidated our project best practices into a standard approach to define your target operating model:

Scoping & planning principles, Supply chain mapping, Decision mapping, SC control model & organization

  • Scoping and planning principles: A key first step is to go back to your strategic guiding principles (such as visibility, agility, reliability) and confirm the scope and depth of your model.
  • Supply chain mapping: An updated mapping of your supply chain flows (both physical and financial) is crucial to identify bottlenecks and understand planning critical constraints. It is important to map the current state, as well as to visualize the future state.
  • Decision mapping: Write down how, where, and when you are forced to take key planning decisions at different horizons and planning levels. Based on a mapping of the decisions, horizons, level of detail, and frequency you can work out an (updated) planning cycle.
  • Supply chain control model and organization: As a last step, think about how you are going to organize the decision making and information flow of your end-to-end supply chain. Determine which activities require a central vs decentral level of control, and what the required planning roles and communication lines are.

Defining a target operating model sets the base layer of your supply chain planning foundation. From there you can detail the further transformation roadmap to realize step-by step planning improvement.

 

Want to know more?

Bart Paridaen E2E Transformation Lead

For more information on how we can support you in creating or re-designing your supply chain foundation please contact one of our experts.

 

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