"Prioritising Supply Chain Efficiency or Responsiveness"

In Supply Chain Management, there is often a tussle between prioritising Efficiency and prioritising Responsiveness. Companies want to operate in the most efficient way possible, at the lowest possible costs and with the highest possible productivity. But they also need to be responsive to their customer's needs, which may require flexibility, agility, and quick response times.

To be more responsive, the company has to invest and if they invest, the Supply Chain Surplus goes down. Hence the Supply Chain becomes less efficient. The company has to then decide and identify their Supply Chain Strategy carefully.

They have to identify products where they need a more efficient Supply Chain and others where they need a responsive Supply Chain and plan accordingly.

However, Optimising Sales & Operations Planning (S&OP) and Order-to-Cash (O2C) processes make the Supply Chain more responsive without lowering Supply Chain Surplus and hence not compromising on efficiency. In fact, it increases efficiency.

So optimising S&OP and O2C improve both Responsiveness and Efficiency. Once that is achieved, the organisation can then decide where to invest if there is still a need to have a more responsive Supply Chain in some products or product segments.