Building Resilience: The Role of Centers of Excellence in Today's Supply Chain

As we’ve discussed in a recent post, the supply chain has experienced unprecedented levels of disruption over the last several years. Everything from the COVID-19 pandemic, geopolitical unrest in Ukraine and the Middle East, climate events and even the recent – and devastating – Francis Scott Key Bridge collapse in Baltimore have had major impacts on the stability of the global supply chain.  

As a result, manufacturers are tasked with mitigating risk and making their supply chains more resilient. This is such a focus, in fact, that the World Economic Forum launched The Resilience Consortium in cooperation with McKinsey & Company “to bring together ministers, chief executives and heads of international organizations to accelerate collective action across key resilience drivers for the global economy.”

Many organizations are so focused on risk and resiliency that they are creating Centers of Excellence (COE) to face this challenge head on. We recently sat down with several supply chain leaders to discuss this topic in more detail – keep reading to learn more.  

"Resilience is the ability to deal with adversity, withstand shocks and continuously adapt and accelerate as disruptions and crises arise over time." – The Resilience Consortium

Why COEs?

COEs are comprised of a team of experts focused on one mission – in this case, risk and resilience. And, with board members and auditors becoming more vocal about risk and resilience strategies, the C-suite is putting their best and brightest up to the task.  

The focus on risk and resilience is a shift for many organizations. The goal of the supply chain has changed – so the strategies and technologies that support it must evolve as well. Michael Ciatto, Senior Vice President and Global Leader, Supply Chain Service Line at Genpact, shared, “supply chains have historically been designed for efficiency – mostly cost efficiency. Efficient supply chains are fine, but competitive advantage comes from resilient supply chains. They should be evaluated on something that drives revenue and improves the customer experience.”  

What should a COE look like?

The pressure is on for manufacturers to fortify their operations, and the emergence of COEs dedicated to addressing these challenges will only become more common – and necessary. But what does a well-rounded COE look like? Below are a few key characteristics that comprise an effective COE.  

Real-time Visibility

“COEs will employ a command center approach, with real-time visibility into what demand looks like and highlighting any ‘hot areas’ of risk,” according to Bruce Richardson, Chief Enterprise Strategist at Salesforce

Business-wide

“With an increased number of disruptive events, COEs are important and useful and should encompass more than just the supply chain function. The supply chain is just one component, and the COE should be comprised of much wider parts of the business,” shared Katsutaka Ishida, Managing Director Japan at ketteQ.  

System Thinkers

Erik Olson, Global Industrial Manufacturing Lead at Korn Ferry, highlighted that “right now, people tend to be very function focused and don’t think of the end-to-end supply chain. The COE should be comprised of individuals that can think big picture to discuss how the supply chain organization should be staffed, what changes need to be made and how those changes will be addressed and implemented.”  

Technology-enabled

In some instances, COEs fail – not because the COE is a bad idea, but because the organization is resistant to change. “When COEs don’t provide the intended results, it typically goes back to not pushing for change, especially with technology. Old technology can’t do the job,” argued Mark Balte, Vice President Services at ketteQ  

What is the future of the COE?

Just as the supply chain evolves, so must the COE. Thinking towards the future, ketteQ CEO Mike Landry theorized that as the new breed of highly technologically enabled supply chain solutions become smarter and accelerate the journey to autonomous planning, eventually the industry will shift from COEs to Centers of Intelligence (COI). In a COI, “intelligence is pushed to the field, to the edges of the business where it can be used and acted upon immediately. It’s a conversational approach where business users are providing input to inform decisions, instead of just a top-down methodology. COIs will require sophisticated technology to execute on ideas.”  

Ultimately, as organizations seek to fortify their operations against risks, the establishment of COEs becomes imperative, driven by a fundamental shift in focus from mere efficiency to the pursuit of resilience as a source of competitive advantage. To learn more and check out other key trends influencing the supply chain in 2024, check out our latest eBook.  

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