Companies consider organisational changes of the supply chain when particular situations occur.

It often happens when management notices signs of ineffectiveness, such as new product launches that take too long to scale up, or when decisions made in cross-functional committees fail to be executed on the ground in an effective way.

Moreover, another typical situation occurs when operations are radically changed through the digital transformation of processes or when the value chains are reconfigured, or even when the organisational structure deeply changes, for example, due to mergers or acquisitions.

Redesigns of supply chain organisations usually start with a benchmark of organisational models, followed by an attempt to replicate what appears to be the best practices. However, several studies demonstrate that there is no correlation between the type of supply chain organisation and the bottom line results.

A degree of centralization has become an accepted practice in supply chain organization design.

Most parts of the companies at least centralise the strategic supply chain function, so that ownership and improvement of processes are managed across geographies, while local units keep control of the execution.

Centralisation typically works well for functions that improve, standardise, or manage limited resources across units or geography (e.g., supply chain process design, compliance oversight, master data management).

On the other hand, centralised operational execution is less common. Shared service centres have helped organisations improve efficiency by increasing control and deepening the skills of specialised resources, particularly in functions such as master data management, logistics, and inventory analysis.

Such centralisation in global or regional structures has the benefit of economies of scale and skill, but making them work requires operational integration with business local resources and processes. This requires harmonised processes and structural consistency across business units, to deal with variability across geography and businesses, which hinder collaboration and responsiveness.

There are 5 success factors that are common to efficient and effective supply chain organisations, which is good to keep in mind:

The overall quality of the end-to-end alignment and coordination, considering that the supply chain function interacts with assets, technology, processes, and people to make a strategy happen, and when parts of this system are not aligned, execution becomes harder.

The presence of formal roles to coordinate planning along the end-to-end value chain across business units, functions, and sites, to avoid struggling with silos and difficulty in cross-business execution. Among them, the role played by business process owners is relevant, dealing with continuous analysis and performance improvement, and orchestration of common process interfaces. Moreover, the role of end-to-end value-stream managers is fundamental to promote efficient process management, particularly in companies that are organised in specialised functional vertical units. Finally, the role of end-to-end planners is particularly important for execution, operating as a single point of contact between commercial and supply units, allowing the execution of segmented strategies by coordinating order fulfilment from start to finish.

Existence of cross-functional performance systems, notably when there is a variety of structures and process ownership, to avoid segmentation of goals by unit, geography, or even site.

Adoption of an agile mindset in designing new structures, roles, and processes to create a minimum viable product version of the new supply chain organisation, then testing and refining the new supply chain operating models in an iterative way.

Finally, the development of resources through team building, career mobility, and skill development. Capacity related to social interaction and transformation programmes is particularly relevant.