Which Of The Following Constitutes A Postproduction Service In A Value Chain?

COVID-xix has helped to advance the adoption of digital supply chains. Every bit leaders movement frontward, however, they should assess how best to optimize this shift to interconnectivity for greater value.

Looking beyond recovery

The COVID-19 pandemic has laid bare many of the long-standing vulnerabilities and risks lurking in organizations' supply bondage. In some cases, it has caused companies to accept a hard look at their processes and their business organization models. In others, it has opened new opportunities for innovation, growth, and competitive advantage in the postpandemic globe. Overall, it has demonstrated the power of interconnected, digital supply networks (DSNs) to enable organizations to anticipate, sense, and respond to unexpected changes and minimize their impacts.

To be sure, the challenges during the COVID-19 pandemic didn't reveal the interdependent or global nature of supply chains; rather, they highlighted that most organizations aren't set up to manage this interconnectivity when adverse impacts occur. In short, the pandemic has shown that if companies want to movement forward into a future where they can thrive, they likely need to change.

But beyond the immediate economic and operational challenges created by the COVID-19 pandemic, what might supply networks in the postpandemic earth look like? Despite the profound shifts we've experienced over the past twelvemonth, the future of supply bondage doesn't look all that unlike from how we previously imagined information technology—we wait to merely get at that place much faster. To "become there," however, supply chain leaders seeking to prepare their organizations' supply chain processes for thriving postpandemic can focus on three key areas:

Recognize shifts in your customers, business organisation operations and technologies, ecosystems, and workforce: Iv fundamental realities have shifted rapidly due to COVID-19. Each of these shifts can accept direct and indirect implications for supply chains.
Assess your organization's ability to thrive amid these shifts: Supply concatenation leaders tin consider a series of questions to evaluate their organization's readiness to deliver among these shifts.
Position the organisation to thrive: As they assess their readiness beyond these four shifts, leaders tin take three overarching tactical steps today to gear up their organizations to thrive.

Equally part of Deloitte's Reply, Recover, Thrive supply chain series, this report examines how organizations tin revisit their supply chain strategies in light of all they have learned during the pandemic, and prioritize the capabilities they expect to crave going forward to thrive in this new normal.

Recognize shifts in your customers, business operations and technologies, ecosystems, and workforce

While the pandemic is still unfolding and its long-term effects are notwithstanding unknown, what is clear is that the crisis seems to have helped accelerate fundamental shifts in what customers value, how customers buy, and how businesses need to operate differently to encounter customer requirements and earn their trust and loyalty (figure 1).

Meeting evolving customer values and production and service requirements

Post–COVID-19, the expectation for quick and seamless on-demand delivery will likely require companies to interact with ecosystem partners in increasingly circuitous fulfillment networks.^ane Furthermore, comprehensive omnichannel approaches—underpinned past customer data to enable a tailored and personalized feel—could increasingly supervene upon more traditional, isolated aqueduct strategies.

Few companies will exist allowed to these shifts. Indeed, these expectations are likely to extend beyond concern-to-consumer companies to include the business-to-business (B2B) world. While at that place will likely always exist some differences between how the two domains operate, research suggests that B2B customers will increasingly expect a superior commercial experience alike to the one they receive in their personal lives.² Examples include tailored product/service offerings, self-service order portals, seamless order processing and billing, shipment tracking, and no-hassle returns.

The values of corporate purpose, trust, and sustainability take also go more important.^three Although many companies accept historically shied away from commenting on societal problems or reporting sustainability goals, organizations—and their leaders—will likely exist increasingly required to demonstrate progress on these topics, especially subsequently the pandemic.

In a recent global survey, both millennials and Gen Z consumers said that they volition make a special effort to back up businesses—particularly smaller local sellers—later the pandemic, and they won't hesitate to avert companies whose stated and proficient values don't match their ain values.^iv Farther, a 2020 study by the Manufacturer's Alliance for Productivity and Innovation plant that 74% of manufacturers expected that reporting on ecology, social, and governance (ESG) goals would become table stakes every bit early on every bit inside a year.⁵ Organizations' ability to provide proof of execution confronting these commitments might become a requirement. This would reshape and reinforce the need for transparency—and redefine what trust and sustainability hateful in a supply concatenation.

Assessing your ability to thrive: Next steps to consider for customers and product/service requirements

Leaders should evaluate their power to market and sell their products and services in the post–COVID-19 world. Some of the important areas to consider include:

Serving the continued customer

The pandemic has contributed to the replacement of brick and mortar by eastward-commerce. Yet autonomously from a few select industries, such every bit retail, many industries and organizations are not prepared to completely abandon in-person client interaction. What does this hateful for their supply chains? Every bit you look forward, consider the following:

How diversified are our sales channels, and are we prepared to market to and fulfill orders from a fully digital customer base?
Do we take the IT infrastructure to enable self-service (i.e., product inquiry), online back up, seamless club placement and fulfillment, and shipment rails and trace?
Are nosotros able to rail online customer engagement metrics and leverage that data to inform planning and forecasting?

Customizing the production and service portfolio

Portfolio optimization takes on renewed importance during disquisitional junctures in economic and business life cycles. Key questions you lot can ask include:

Is in that location a measurement for the impact and importance of each product or service relative to its current and time to come profitability and growth potential?
How does the production mix impact the complexity and cost drivers of our supply concatenation, such as production scheduling, overall equipment effectiveness, and storage and package configurations?
Are there tangible measures for the real (or perceived) environmental or societal affect, both pre- and postproduction, of our visitor'south products?

Positioning for profitability

With resource increasingly constrained, leaders should prioritize subsets of customers and aligned services, and manage supply bondage accordingly by considering the post-obit:

Does our organization segment its customers based on profitability percentage, full margin contribution, strategic importance, growth potential, or some other measure out?
Do our employees regularly engage with the highest-value customers to understand the potential for additional services or enhancements, to inform pricing strategies across client tiers?
How well does our system understand our cost-to-serve on a client-past-client and transaction-by-transaction basis?

The answers to these questions focus on the intersection of supply chains, new product development, client strategy, sales, and finance. Organizations should take a renewed end-to-end look at their customers, products, and operations through a "cost-to-serve" lens and make informed choices that balance cost and effort with value, perceived willingness to pay, and sustainable business organization growth.

Building trusted, continued supply networks

We have long explored how traditional linear supply chains optimized for a single business organisation or function are transforming into trusted DSNs.⁶ When done in isolation (i.e., "random acts of digital"), technology investments frequently serve to optimize merely a component of the value chain, non the whole. In the DSN model, notwithstanding, functional silos are broken down both within an system also as outwardly to include customers and suppliers (and in some cases, suppliers' suppliers) to enable end-to-end visibility, collaboration, responsiveness, agility, and optimization.^seven In fact, every bit linear supply chains evolve into DSNs, the companies best positioned for growth may be those that meet these networks every bit core to their business, applied science, and operational strategies.

Increasingly, DSNs are being designed and built to anticipate disruptions and reconfigure themselves to mitigate impacts across the extended partner ecosystem.^eight COVID-19 presented an opportunity to force per unit area test whether DSNs could deliver on their promise—and highlighted the importance of a fully connected DSN—not only within the system merely also finish to terminate beyond the ecosystem.

The key to automatic, predictive, and prescriptive operations in the post–COVID-xix globe lies in the interconnectivity of digital tools, concrete infrastructure, and their underlying data streams. Tools such as the Cyberspace of Things, cloud computing, and 5G make it possible to create new sources of data from the physical attributes of a supply chain (e.g., machine vibration tolerance, truck route deviations, carbon emission yield increases), and interpret, curate, and visualize that data in meaningful ways to make business decisions. Artificial intelligence (AI), machine learning, and robotics can augment and enhance the human workforce to meliorate efficiency, productivity, and safety in factories, warehouses, call centers, and transit. Finally, data lakes or control towers can bring cross-functional tools and processes together and utilize advanced applications to ensure DSNs are optimized to thrive—and trusted to continue to operate and arrange amid unexpected disruptions.

Assessing your power to thrive: Side by side steps to consider for building trusted, connected supply networks

Some of the topics that supply chain leaders should consider to better prepare for hereafter contingencies include:

Advancing the interconnected DSN

Moving into thrive requires supply chains to leverage connection points in the network to sense and respond to sudden changes in demand and supply and optimize operations. Key questions supply chain leaders should consider in this surface area include:

Are our planning systems able to sense or predict potential changes in demand due to changing customer preferences or broader macroeconomic trends?
Are our product assets smart enough to proactively alert us to potential maintenance and uptime issues?
Are our logistics operations optimized (including shipment scheduling, mode-switching, route optimization, tracking and tracing, inventory rebalancing, and network footprint changes)—not just on a cost basis simply also considering toll/resilience trade-offs?

Automating operations

Given the rapid advancements in automation technologies, leaders can observe information technology difficult to select the applications that are nearly suited for their purpose and trust the results.⁹ Some common considerations for process automation, AI, and machine learning include:

How much time is spent on repeatable or administrative tasks (e.g., tape-keeping) or interpreting raw data for insights into operation comeback opportunities?
Where tin can data integration and business rules be practical to supercede, broaden, or accelerate human being controlling?

As the COVID-19 crunch continues to evolve, end-to-end visibility and collaboration across the supply chain tin can be critical to ensuring that the network will continue to role as intended. Otherwise, in its absence, manual interventions could be needed to adapt to disruptions—typically an inefficient and plush approach.

Designing supply chains that are optimized for toll, service, and resilience

Even as business organisation and commerce have grown ever more globalized, supply chains accept generally moved in the opposite direction, growing more regionalized to meet local demand. This approach, known as nigh-shoring, taps into production capacity closer to prime markets. The COVID-19 pandemic further reinforced the value of being closer to the end customer, enabling a higher degree of command.

At the same time, however, it besides exposed the need for companies to diversify their supply sources beyond a single country or region and to gain a deeper understanding of their extended ecosystem, including their suppliers' suppliers. Supplier diversification had already been gaining traction in recent years, as rise costs and geopolitical take a chance from trade wars take prompted organizations to supplement their traditional supply networks with infrastructure in a 2d, typically lower-cost country. However, COVID-19 highlighted how those strategies might have been superficial at best, since many product locations still rely heavily on the same suppliers. The event was the illusion of resilience, rather than true diversification.

Leading organizations tin use avant-garde technologies to fundamentally rethink their supply chains, heighten their real-fourth dimension understanding of activity in complex supply networks, and leverage continuous scenario planning to optimize the balance of cost against risk and agility of their production chapters footprint.

Designing a supply chain that is both resilient and efficient while addressing increasingly complex and nuanced markets is challenging. Organizations will have to consider multiple dimensions: proximity to customer markets, various client service requirements (including aftersales service and reverse logistics), sources of raw materials, proximity to fundamental suppliers and ecosystem partners, availability of skilled labor (and overall talent availability), infrastructure (energy, logistics, education), business disruption risk, laws and regulations (including intellectual property protection, customs, duties, and taxes), and ESG considerations—to name just a few. But the payoff can exist a more than resilient supply chain, better prepared to weather future disruptions with fewer impacts to cost and service.

Assessing your ability to thrive: Next steps to consider for designing optimized, resilient supply bondage

COVID-nineteen has highlighted both the importance of supply concatenation resilience as well as the challenge of associated costs, whether for minimizing toll or ensuring business continuity. Recognizing the importance of both ends of this spectrum is important when evaluating how the supply concatenation should be structured in the longer term.

Balancing the global supply concatenation footprint

Analyzing your plant and distribution network tin yield significant resilience improvements (not to mention cost savings). Some questions to consider include:

Is our network over-reliant on specific regions—particularly those that may be prone to supply chain disruptions (e.g., due to regulatory or geopolitical factors)?
Take we conducted a detailed disruption scenario analysis because factors such equally unplanned product downtime, impacts to warehouse and terminal usability, weather changes, and port and rail congestion to determine potential weaknesses?

Reexamining the extended, multitier supplier network

While leaders' firsthand reactions to the pandemic may have been to rein in global supply networks, the following questions might help provide perspective in balancing risks and costs:

Does our supply chain involve multiple suppliers beyond a range of local, regional, and global locations to back up operations?
What do we know nearly the supplier bases of our suppliers? Are our systems continued to those of our suppliers and customers (i.e., would a disruption at a first- or second-tier supplier trigger an warning to our planning systems)?
Are nosotros able to automatically and dynamically reallocate volumes across our suppliers based on predictable delivery risk, quality, timeliness, and cost metrics? Do we understand the profitability bear on of doing so?
Are we able to proactively monitor and assess the wellness and resilience of our suppliers, and incorporate those results into contracting decisions?
Can nosotros fairly assess cost-to-serve/profitability vs. risk/resiliency tolerance of given supplier network configurations?

Optimizing inventory

Your inventory strategy should support and complement your commercial strategy—balancing both customer- and production-level considerations (e.g., brand-to-order vs. make-to-stock, lead fourth dimension commitments, stocking locations and pooling strategy, minimum guild quantities, desired service levels). Some questions include:

Exercise we conduct analyses (including historical data also as potential future disruptions) on how much inventory to carry at the stock-keeping unit and location level?^ten
Does our scenario assay adjust inventory for variability in demand and supply, production and transportation lead times, shipment frequencies, batch sizes, etc.?
Can our inventory management systems automatically rebalance inventories across the network?

Organizations should assess risk throughout their value chains and establish balls plans to meet an appropriate take a chance-adapted, optimized outcome for each area—1 that balances disruption costs with the value of assurance and service.

Enabling the future of work in supply chain direction and operations

The workplace, workforce, and the nature of work itself will perhaps undergo some of the almost dramatic changes in the wake of COVID-19.

The pandemic proved to many of u.s.a. that remote work is not only possible but constructive. The notion of where work can be done (i.e., the workplace) will probable continue its shift from an in-person environment to a more distributed model as organizations increasingly adopt tools for remote working. In a Deloitte June 2020 study, CEOs said that they expect a 3rd of their workforce to be working in a full-time remote capacity by 2022, and fifty-fifty earlier in some cases.¹¹

These trends are non just limited to traditional office work; they extend to the store floor and throughout the supply network. In fact, many manufacturers are likely to spend more than on data management capabilities aimed at facilitating remote operations and improving operational efficiency. For example, Norsk Hydro, a Kingdom of norway-based aluminum manufacturer that experienced express access to institute infrastructure during the pandemic, plans to expand its information capabilities to remotely run and monitor plant equipment for improved resilience.¹²

In improver to the evolving landscape of where work tin be done, the workforce itself is besides changing as companies augment their traditional full-time employment models with contract workers and gig workers.¹³ With the growing share of alternative workers, companies should call back creatively about how to train and leverage them effectively. Flexible talent mobility policies—which can be leveraged both internally as well as within the overall ecosystem of suppliers—enable organizations to quickly suit their workforce every bit the need for talent evolves.

More than generally, advancements in process automation tools such every bit AI, auto learning, robotics, natural language processing and generation, autonomous driving, and estimator visioning tin can augment workers, creating more value.¹⁴ In another recent Deloitte written report, 79% of manufacturers reported that expecting their AI investment to increase over the next year, while 76% await AI to be integrated into all enterprise applications inside iii years.^xv

Finally, the definition of piece of work itself is shifting. Advanced connectivity and optimization techniques have presented unique opportunities and challenges for plant managers and technicians: running and monitoring entire plant operations remotely, automatically balancing sudden spikes and troughs in demand-supply patterns across multiple plants, and others. While these efforts were already underway for some companies before the pandemic, COVID-nineteen pushed others to follow arrange quickly and made these elements an integral feature of tomorrow's supply chains. Supply chain managers should view their operations with a critical lens, challenging the status quo of where and how work is performed, and who performs it—enabling greater benefit to the organization and its stakeholders.

Assessing your ability to thrive: Next steps to consider for enabling the time to come of work in supply concatenation direction and operations

As we head into the postpandemic world, information technology will not be enough to merely think most plexiglass dividers and temperature checks; those considerations, while important, merely achieve the nearly-term goal of returning to work. Instead, organizations volition likely need to rearchitect how they think almost work, how they unleash their workforce's potential, and how they adapt the workplace to arrange both physical and virtual environments.

Rearchitecting work for the futurity

Challenge the supposition that work can remain largely the same every bit it was before. Doing so would overlook an opportunity to reevaluate and rearchitect work to advance productivity and growth. Some questions for leaders to consider include:

Is our organization focusing on the right work outcomes to bulldoze our business forrard and unleash productivity and new value?
Are we thinking of technology as a ways of substitution, or as an enabler to augment work and drive better collaboration?
Has our arrangement begun to explore augmented and virtual reality technologies (e.one thousand., computer visioning to identify safety and quality problems, wearables to guide maintenance and repair activities, digital twins to enable remote or rapid troubleshooting)?

Unleashing the total potential of your workforce

Organizations can unleash the full potential of their workforce by enabling people, teams, and intelligent machines to work together to solve bug, gain insights, and evangelize more than value while creating more meaningful work. To assess whether your organization is prepared, leaders should ask themselves:

Do nosotros understand the capabilities we need, and where the best places are to notice those capabilities (east.g., through the gig economy, alliance partners, engineering solutions)?
How volition we educate and develop the workforce to gain these capabilities, including working alongside new or enhanced systems and partners?
How should we be leading, rewarding, or incentivizing the workforce to drive the productivity gains our arrangement needs to thrive?

Adapting the workplace to the time to come

The workplace of the future is a dynamic identify where employees, customers, and partners come up together, and technology helps people communicate, collaborate, and interact, whether physically or almost. Leaders should ask themselves:

Have we created an effective virtual and concrete workplace that allows the organization to thrive—and one suited to the piece of work itself (e.1000., physical space for team collaboration, digital tools for asynchronous design)?
Accept we empowered workers with the tools, technology, and trust to cull where and how they do their piece of work?
Have we created a culture that promotes adjustability, enables teaming, and teaches leaders how to lead their teams in both a physical and virtual environment?

Ultimately, the futurity of work is much more than a shift from a physical to virtual environment. To recruit, empower, and retain the best talent, and to build an organization that is truly adjustable, leaders should encompass all the changing elements in the future of work.

Side by side steps: Positioning the organization to thrive

It's difficult to predict the extent and elapsing of COVID-nineteen's touch on global economies, businesses, and lives. Adapting to these four shifts takes hard work, honest assessments, and a long-term lens on investment. So, what sort of capabilities should supply chain executives consider deploying at present as they keep to build out their DSNs in a thrive surround?

We look the reply to evolve alongside the technology bend. Leaders can consider multiple actions now to conform their supply chains to these shifts (figure 2), then they can thrive in the postpandemic earth: An age where humans and robots share the factory floor as well as the corporate role; where algorithms predict need patterns and make up one's mind scheduling sequence; where global value chains tin can be viewed from a centralized control belfry using AI or auto learning to appraise operations, manage performance across networks, trigger alerts and initiate mitigating action; where the merchandise-off of toll vs. service is weighted to consider multitiered risk and resiliency; and where supply chains are fully synchronized and dynamically optimized from source supplier to end client.

Make the supply concatenation an integral part of the corporate strategy. For companies competing on a global scale, things can alter quickly—and not just from unexpected breaks in the supply concatenation caused by a pandemic, but disruptive technologies or abrupt market shifts as well. All also oftentimes, supply chain strategy and business strategy have been kept separate. Driven by greater global complexity and the enormous stress that has been placed on networks—from higher client expectations to dynamic delivery solutions—companies should challenge the long-held orthodoxy that supply chains exist only to meet the commercial needs of the business organization. Instead, supply chain considerations should become fundamental to business strategy.

Lay the digital foundations to enable the corporate strategy. Ten years ago, having a standard enterprise resource planning, transportation, and inventory solution was typically adequate to meet the needs of the marketplace. Nevertheless, technical advancements have transformed the supply chain landscape. Data has become the new currency upon which success or failure can be measured. It is, therefore, essential to decide how data and technology will enable business concern and supply chain objectives, and where it is critical to lease vs. purchase these capabilities. Technology solutions have historically been expensive, housed on site, and difficult to replace without major capital outlay. Given the rise of deject-based solutions, supply chain executives have access to lower-cost products from a range of innovative providers.¹⁶ Supply chain leaders can thus rethink their company's technology strategy equally a means of driving increased innovation and nimbleness at lower toll and faster speed to market.

Identify what (and who) you'll need to get it done. While there will exist some return to prepandemic work arrangements, many of the new practices and trends are likely to stay.¹⁷ Therefore, supply chain leaders should take an active role in planning and designing for their organization'southward future of work— particularly with respect to identifying areas for automation within the supply concatenation, and determining where and how to redeploy (and upskill) the workforce, and what skills and capabilities they'll need to ready themselves upwards for growth.¹⁸

While COVID-xix certainly defenseless the world unprepared, the fundamentals of what it will take to compete in the postpandemic world shouldn't. In many cases, the seeds for change were sewn long before "social distancing" and "Zooming" became household terms. And while there is undoubtedly a steep route ahead for many, those supply concatenation organizations that can encompass the new normal, invest in the future, and embrace interconnectivity and transparency could be all-time positioned to thrive.

Deloitte Supply Chain and Network Operations Consulting

Traditional supply chains are evolving into sets of dynamic digital supply networks. Deloitte Consulting LLP's Supply Chain and Network Operations practice helps companies build supply network strategies and platforms, marshal processes with new technologies, develop persona-driven user experiences, and explore opportunities to grow and innovate.

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