Six Tips for Developing an Effective Center of Excellence

By Jonathan Whitaker | Principal, Managed Analytics Services | Chainalytics If your business is undergoing significant business change, has fluctuating levels of complexity or multiple...


By Jonathan Whitaker | Principal, Managed Analytics Services | Chainalytics


If your business is undergoing significant business change, has fluctuating levels of complexity or multiple independent supply chains, you know how hard it can be to achieve internal supply chain alignment across divisions. Fast-moving consumer goods (FMCG), consumer packaged goods (CPG), retail, and electronics companies are especially prone to vulnerable, misaligned or fractured supply chains. But they can also benefit from setting up a supply chain center of excellence (CoE). CoEs strengthen supply chains by optimizing operations and inculcating enterprise-wide best practices for companies that sell across multiple channels, serve volatile or shifting markets, conduct frequent contingency planning, develop supply chain strategies to address e-commerce demands, or need to build a unified, optimized post-merger-and-acquisition supply chain. Essentially a center of competency, a CoE focuses on supply chain design and flow-path analysis, route planning, inventory deployment, and related advanced analytics to unite companies across their supply chain silos. When developed with forethought, a CoE can be a valuable asset that produces long-lasting benefits.

How to Get Your CoE Up & Running

  1. Start with a CoE readiness assessment. Ask yourself some key questions: Do you have both the critical mass of work and the financial resources required to justify establishing and maintaining a CoE? Are you capable of developing high-performance teams? Can your culture attract, mentor/develop and retain people with analytical skills in mathematical, inventory, network-design, or transportation modeling and mentor, develop, and retain these highly skilled professionals?
  2. Ensure strong executive sponsorship and guidance. Your CoE will need leaders with both technical and soft skills as well as strong executive sponsorship and guidance or it will not thrive. Your high-performing CoE team needs to report to a senior-level executive sponsor who has the power to enable them to carve out time to focus on supply chain improvement projects.
  3. Provide good analytical tools. The CoE team is often tasked with reviewing different supply chain technologies and analyzing critical technology gaps and priorities for the organization’s short- and long-term supply chain needs and business requirements. CoE experts will analyze a supply chain solution’s time-to-value, its return on investment (ROI), and the time needed to close capability gaps. They’ll also be able to address business-critical issues, like linking supply chain technologies and strategies to large customers’ needs and demands.
  4. Bring core CoE team members together in one place. Can you run your CoE from a centralized location? Your CoE team can be more effective when co-located, to ensure both their credibility and the most efficient use of this limited talent pool.
  5. Develop a clear and meaningful career path for CoE team members. While many companies guide would-be supply chain executives through rotations in functions such as inbound logistics, distribution, and procurement, a better career path for CoE experts challenges their technical competency and protects those rare and valuable members who have both strong technical skills and a high degree of management acumen.
  6. Know when to call in reinforcements. Demanding CoE projects are sometimes accompanied by short timelines, and almost any team can become overwhelmed or confront a technical challenge beyond their expertise. When a project’s demands outstrip available capacity, or when projects are quite different than those the CoE has previously managed, CoE leaders may want to consider supplementing the center’s capabilities with external resources.

If you determine you have the right business needs, culture and resources, the potential benefits of establishing a supply chain center of excellence may well justify the cost and effort. Jonathan Whitaker, principal in Chainalytics’ Managed Analytics Services, recently rejoined Chainalytics from IBM. His extensive analytical and supply chain background incorporates Big Data and analytics client engagements in areas including transformative life sciences solutions, supply chain operations and strategy, asset optimization, predictive analytics and inventory optimization for clients including Watson Analytics, Watson Content Analytics, Watson Explorer and Commerce solutions, Mead Johnson, Coca-Cola, Nike, Shell, ConocoPhillips, Southwestern Energy, UPS, ATC-Genco, Air Products, Raytheon, ConAgra, Delta Faucet, Sara Lee, Cummins, Springleaf and others. Read more about how Chainalytics helps companies navigate complex supply chain change:

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