Supply Chain Reorganizations Must be Designed to Achieve Balance, Strength and Speed
Chief supply chain officers (CSCOs) who improve outcomes radically redesign their structure based on their distinct organizational needs, while prioritizing balance, strength and speed as key business objectives.
“Supply chain reorganization is high up on CSCOs’ agendas, yet many are unclear about how organization design outcomes link to business goals,” said Alan O’Keeffe, Senior Director Analyst in Gartner’s Supply Chain practice. “Our findings reveal that the leaders who achieved success took a more radical approach to redesigning their supply chain organizations, resulting in the ability to deliver on new and transformational operating models.”
The research was based in part on qualitative interviews conducted between February and June 2024 with supply chain leaders from organizations that had undergone organizational redesign. Insights were drawn from those who had successfully completed a radical reorganization, defined as a shift that enabled organizations to deliver on new activities and operating models that better met the needs of the business. Additionally, more than 1,200 inquiries with clients conducted between July 2022 and June 2024 informed the report.
Gartner experts found that successful companies did not design similar organizational solutions. They assigned responsibilities to reporting lines in radically diverse ways. They focused on the unique characteristics of their business and networks to design organizations that were tailored to meet the unique needs of their organization.
“The commonality between successful organizations is that their leaders intentionally prioritized the organizational goals of balance, strength and speed into their design process,” said O’Keeffe. “In doing so, they sidestepped the most common pitfalls in supply chain reorganization design.”
These mistakes include:
Mistake 1: The “Either/Or” Approach
“CSCOs should integrate activities that benefit from standardization for efficiency and differentiate those that require customization to meet unique business needs,” said O’Keeffe.
Mistake 2: Debilitating Headcount Reduction
“High-performing organizations invest in talent and intentional work design to strengthen their organizations,” said O’Keeffe. “This includes reassessing the scale of work, adjusting where work happens, and ensuring that talent is appropriately placed to achieve the organization’s unique goals.”
Mistake 3: The Copy/Paste Approach
- Designing structures that enable rapid response to customer needs
- Streamlining internal decision-making processes
- Differentiating between operational execution and transformation efforts
“Successful CSCOs aligned roles to stakeholders to reduce complexity and ensure clear decision-making authority,” said O’Keeffe. “This helped in creating single points of contact and removed confusion about who the decision makers were.”
