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In part 1 of this Spend Matters PRO series, we looked at what “design for supply” (DFS) is and positioned it as a means to connect/align demand, supply and product. We also highlighted that DFS is not a new practice. Procurement has been, to some extent and varying degrees for each organization, doing it for years. However, the narrow focus on hyper-efficiencies combined with organizational and geographical distance has produced side effects.
By having created a hyper-efficient (and lean) globalized supply chain, the “old” way of doing DFS reveals itself to be incompatible with the current state of the world.
Therefore a new approach to DFS is required. This second part of our series will focus on this change, looking at the inherent challenges and opportunities. Part 3 will focus on examples from the semiconductor shortage in the auto industry. And Part 4 will explore how procurement technology can support DFS.
“The systemic issues that are driving today’s supply chain headaches will not be fixed quickly. It’s going to take several years for supply chains to catch up with the changes … brought about by the pandemic.” — Prologis CEO Sees Supply-Chain Strains Extending to 2023, The Wall Street Journal
