Complex supply chains: the case for design-centric businesses

As supply chains get longer and more complex, how can companies mitigate risk and drive competitive advantage? Omera Khan, Imran Khan and Ron Jarman make the case for 'design-centric' businesses

The huge challenges faced by firms today can damage trading and disrupt the supply chain.

The rise in outsourcing and globalisation has forced chains to be longer, leaner and has left them more vulnerable to events that previously may have caused only minor local interruptions.

Success in a volatile market can only be achieved by responsive companies which anticipate and respond to changes and uncertainty. Businesses must be "design-centric", supported by multi-disciplinary design teams in the same place who work closely with suppliers and have "product champions".

As well as enabling a company to run as usual after disruption, a responsive enterprise gains competitive advantage by being quicker than its rivals.

For example, consider the contrasting reactions of Nokia and Ericsson to a fire at a key supplier's factory. Nokia showed responsiveness and resilience, whereas Ericsson was slower and halted production because of supply shortages.

Design also influences the response of the supply chain. How the design process is managed affects time-to-market, which is a measure of the responsiveness of a design-driven supply chain. Businesses must have plans that provide benefits to product life-cycle management, to be able to respond to a market driven by customers and manage complex product design.

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