In this article, we begin the countdown of the top-performing supply chains according to our analysts at Gartner. We’re in the business of supporting companies to revolutionize their supply chains, which means transferring knowledge and best practices to help our clients succeed. By highlighting how the top 25 performers are succeeding with their supply chain management, we can share valuable tips and information to help us all improve our work. So let’s look at the performance of 3M and Bristol Myers Squibb, who came in at numbers 25 and 24, respectively.
3M is a giant in the manufacturing industry, and their global supply chain has proven they’re worthy of their status, with two of their impressive examples below:
Over the years, 3M have been commended for the digitization of their supply chain processes to manage their 200 manufacturing plants, over 100 warehouses, and 25 customer-facing facilities. Digitization has allowed them to optimize the connection points within their chain, reducing the knock-on impact of a hiccup in one link.
3M management has outlined their supply chain’s success over recent years by comparing it to their old structures, where materials previously flowed “barrel by barrel, truck by truck” as a linear flow. Their objective was to steer away from a linear flow and move towards a geometric network. This network connects their suppliers’ facilities to theirs, to the point that their systems can essentially communicate with each other.
Instead of blindly assuming their materials arrive from their suppliers in constant conditions and quantities, their systems inform them in real-time. 3M’s planning systems speak directly to their suppliers’ systems by communicating their consumption and output instantly – and their suppliers respond appropriately, creating a malleable, agile, and plannable supply chain system.
Unexpected global situations are where the durability and agility of supply chains are truly tested. 3M’s manufacturing response to the COVID-19 pandemic has showcased their supply chain management quality as they rose to meet the seemingly overnight demand for N95 face masks. 3M increased production rapidly and reduced planning cycle times by 70% across their portfolio.
They owe this impressive feat to their surge capacity, which is the breathing space they allowed during regular times in civilization. 3M invested in this surge capacity following the SARS outbreak. As a business, they recognized that irregular spikes in demand for particular products due to unexpected situations are likely. Investing in this capacity means that when demand spikes, they can rise to the occasion and reap the benefits of supplying what many others can’t.
3M’s surge capacity has remained relatively idle for the past two decades, aside from short-lived emergencies such as the Californian and Australian wildfires. When the virus broke out, they made full use of the capacity and delivered 1.1 billion respirators per year, which highlights the success of their surge capacity investment. 3M have earned their place as our top performers’ list by curating a 3M supply chain that helps secure and protect their supply even when unexpected demand occurs.
24. Bristol Myers Squibb
Coming in strongly at number 24 on a powerful list is Bristol Myers Squibb (BMS), who has a remarkable transformation success story. BMS focused on supplying patients with unmet health needs through innovation efforts around niche therapeutic areas. In 2007, driven by the vision of being the company at the intersection of pharmaceuticals and biotech, they transitioned into this area with effective supply chain management.
Company leaders have shared their view of the process and how their effective supply chain made the transition possible. One of Gartner’s success themes centers on strategic objectives and aligning supply chains towards a collective goal. Bristol Myers Squibb’s president stated that its best supply chain strategies focus on its broader business objectives. So when they realigned their business goals from a diversified pharmaceutical company to a specialty-care biopharmaceutical company, their supply chain strategy had to meet new goals.
People, Processes, and Technology
Bristol Myers Squibb is well aware of the need to integrate the links that form their supply chain – the people, processes, and technology – to keep operations smooth. Linking these segments into the business strategy is the beginning, and then breaking down that objective into an integrated planning process is the key to their success. Translating the business plan into digestible information allows an organization to accurately forecast its production and create a manufacturing plan around these shorter-term goals.
A robust data management system is required to support this planning process, which is where the tech comes in. Integrating technology platforms that supported Bristol Myers Squibbs forecasts and manufacturing plans was key to their successful supply chain that powered their business goals.
Risk Assessments and Mitigation Plans
Forecasting is only an estimate, especially for new, innovative products, which is a focal point for Bristol Myers Squibbs. BMS acknowledged that their planning and forecasts are challenging and will always have unknowns and risks involved. As an industry leader, they’ve shown the world the benefit through planning, which for them, includes a business continuity program.
Their business continuity program outlines the contingency in their processes and how they can continue to operate when risks arise. They invest time and resources into an extensive risk assessment which makes way for a risk mitigation plan, where the power of agility and adaptability are born. Bristol Myers Squibb considers various risks associated with demand variabilities, such as product failures, compensation scenarios, and production disruptions from natural disasters.
From here, they plan their contingency within each risk, which might involve multiple source supplies, strategically storing inventory, or shortening recovery times. Bristol Myers Squibb hasn’t done anything too fancy to get where they are but rather taken a deep look into their supply chain to create a system so visible that they can just about power through any uncertainty.