Reorganizing without a clear business reason for doing so can lead to high supply chain costs and increased supply chain risk. Too often supply chain organization redesigns simply mask areas of friction, if not compound persistent challenges, around resource allocation, building and delivering expertise, and decision making.

Supply chain leaders must first map the challenges driving the need for reorganization. Commonly these are a failure to optimize people, partners and assets; gaps in knowledge and capabilities; and problems in the clarity, speed and quality of decision making.

Once the challenges are made clear, you can define specific objectives for the new organization. For example, if the pace and cost of adding new staff (FTEs) is exceeding that of revenue and profit growth, you can set out to improve scalability of FTEs in the supply chain. Or, if the supply chain organization is too siloed, you can establish the need to align decision making with the commercial business.

And finally, you can develop and apply targeted strategies. These strategies may range from “light-touch” solutions (e.g., adding cross-functional teams, upskilling employees, redesigning the cadence and composition of team meetings) to major restructuring (e.g., installing a shared service organization, adding new roles, adding an intermediate management layer).