In 2022, The Innovation Garage® celebrates ten years of delivering long-term value to our clients!
Over that time, we have collaborated with over 40 organizations worldwide, training over one thousand. Sharing our insights, methods, and expert consulting in change management for strategy, innovation, & supply chain.
In celebrating this ten-year milestone, we are producing a series of digital conversations providing insights of those who have, in some way, had a positive influence on our work with others.
Most recently, Harry Moser, founder of the RESHORING INITIATIVE®, joined us to discuss Megatrends for 2032 in Supply Chain.
Megratrends are a super hot-topic with our clients right now. Several client teams are looking to the future in the midst of this chaotic and uncertain time.
The teams are digging deep and looking way ahead into the future. Ten years ahead, in fact.
Megatrends research and insight and Megatrends team workshops are a great way to get a view to the future.
In this 30-minute session interview with Harry, we discuss;
Insights on the influence of government policy, employment, skills development. and advantages of using Total Cost of Ownership (TCO) for localization and re-shoring decisions.
A key theme of the conversation revolves around the premise that in order to survive the current supply chain crisis, and those that will happen in the future, a key part of your strategy must include using Total Cost of Ownership Models as an aid in localizing your supply chain.
What is abundantly clear is that supply chain disruptions are here to stay. Those disruptions are by no means a short-term problem. Disruptions are occurring for more reasons and with more frequency than ever before.
As we look ahead over the next ten years to 2032, localizing your supply chain will be an effective long-term success strategy for your organization.
There is a vigorous debate amongst Global Supply Chain Management practitioners and the organizations in which they operate. We can frame the current state discussion around just a single question.
Should your organization make any more strategic decisions offshore, or is it better to invest our time, effort, and energy in localization?
We cover strategic details on the following topics:
1) It is essential to take a comprehensive big-picture and multi-year horizon perspective and how to use scenario planning to address shortages within your supply chain.
2) It is critical to reset your organization’s lean thinking mindset and supply chain approaches.
3) How to convince your customers to reshore and buy from you.
We discuss macro factors of why to localize, the concept of supply chain scenario planning, why you must take the long view, and how to begin innovating your way out of supply chain uncertainty.
Fixing the global supply chain crisis is not a short-term problem.
Fixing the supply chain crisis is not a ninety-day, six-month, or one-year activity. It is, in fact, a long-term twenty-year problem. Redesigning the global supply chain will take a generation to improve. The supply chain will not be righted in a meaningful way until your children or perhaps even your grandchildren are in the workforce.
The global supply chain crisis is something most governments, publicly traded, and privately held organizations have all contributed.
Total Cost of Ownership Analysis can help make sense of the challenges.
Procurement and supply chain practitioners have created more advanced and high fidelity analysis methods effectively named, Total Cost of Ownership (TCO). They are designing these math models to understand better sourcing decisions and their overall impact on the organization.
The TCO models represent advancement and a more holistic analysis of the costs involved. Incorporating freight, shipping costs, value-added taxes, capital investment, and transportation provides a more direct comparison of an actual “landed cost” comparing offshoring to a localized supply chain.
In hindsight, was it really in any organization’s long-term interests to go along with these offshore strategies?
For real-time evidence of this, look at the lot of your local new car dealership. Speak with your local vehicle dealership salesperson.
Vehicles are not being delivered because of offshore sourcing of critical to function components and, in many cases, a single integrated circuit chipset.
Dealer markups are now above and beyond the window sticker price.
It makes you wonder when practitioners of supply chain management will truly learn the lessons from history and actively change the approach.
This is where partnering and localizing come into play.
If we partner with local suppliers, we can drive total costs down and improve the supply chain’s overall value delivery.
Here are five common truths to better manage your supply chain:
- Understand your supply chain.
- Understand the critical items in your supply chain at the micro-component level.
- Localize and dual source all you can in your supply chain.
- Inventory buffer for critical components.
- Scenario plan for what the next 20 years will have in store.
So why should you localize?
If you localize, it is genuinely lean. If you localize, it is sustainable. If you localize, you help build better economic prosperity for your organization and your local region of the world. Localizing is lean at its core.
The reduction in lead time is lean. Reduction in time is sustainable. Localizing reduces all the complexities in getting materials from one point to another. Localization ensures that you can build up your organization in the local community.
Localization also provides sustainable employment for your organization and your suppliers.
Most importantly, localization will ultimately satisfy your organization’s customer base. Localization gives your customers what they need in the most effective timeframe possible.
So, no matter where you are in the world, we encourage you to watch the interview if you are a CEO, supply chain executive, or practitioner.
This is a global call to action to all supply chain practitioners worldwide – Start your localization journey now!
To build your plan, consider attending our next upcoming digital workshop on Business Continuity and Supply Chain Resiliency.
In this digital workshop we share simple, effective, and detailed approaches to support your organization to get better visibility in its supply chain. We discuss insights, offer tools, and practice real-world case application to make your supply chain more resilient and effective in today’s environment.
These steps will, most importantly, future-proof your supply chain to prepare for the Megatrends that evolve over the next ten years.
We help organizations grow!
We provide world-class education, tools, technology, and expert consulting in change management for strategy, innovation & supply chain.
We build strategy. We build ideas and coach the innovation capability of teams. We design products, services and supply chains. We guide leaders from non-profit, government, startups and the Global Fortune 500 to intentionally self-disrupt their offerings and organizations.
To learn more, visit us here, check out our calendar of events, or reach out to us to discuss a private program for your organization.