Supplying for profitable growth

PwC and Vlerick partner to unleash the strategic potential of SCM

The traditional focus of supply chain management (SCM) is cost control and cost reduction. Yet PwC believes that SCM has a more strategic role to play. The question then is: how can the supply chain contribute to a company’s growth? PwC and Vlerick have entered into a Prime Foundation Partnership to find the answers.

Karel De Baere (Chairman PwC Belgium)Karel De Baere, Chairman of PwC Belgium, explains what prompted them to work with Vlerick: “We’re mainly known as a trusted advisor to CFOs, but our services go well beyond that. For example, we also advise businesses on how to increase the efficiency of their operations and supply chain. We’ve noticed, however, that companies often tend to have a bias towards cost-cutting, especially in times of crisis. In many organisations, there is also a tendency to work in functional silos. This can result in rationalisation efforts being made at departmental level that are not based on a coherent overall view of the drivers of value creation. It’s important to have sufficiently holistic insight into what drives profitability and growth, and supply chain management has a clear role to play here.

Growing awareness

Ann Vereecke, Vlerick’s Professor of Operations and Supply Chain Management, agrees: “Traditionally, SCM efforts are directed towards optimising the supply and distribution networks, plant locations and product standardisation. This is confirmed by the existing body of knowledge on SCM. There’s a growing awareness, however, that SCM can stimulate growth, for example through new products, new markets, new distribution channels, new business models and improved customer service. Together with the PwC team, we started by identifying how the supply chain contributes to profitable growth. There is already sufficient knowledge about growth practices in which the supply chain plays a crucial role, such as enhancing total product quality, mass customisation, collaboration with strategic partners, differentiated pricing and so on. Individually, these practices may not seem particularly new, but it’s when they are integrated that the supply chain can truly fulfil its bridging, strategic role. And technological advances, giving access to, for example, massive amounts of real-time data, are facilitating this process.

Two-phase approach

The partnership will be centred on our Centre for Excellence in Supply Chain Management. The strategic role of SCM, as a bridge between different functions in an organisation, will be reflected in the research, with Ann’s team tapping into other expertise built up in the School, for example in sales & marketing or innovation.

In the first phase, the team, together with PwC, will develop a framework or model describing the different drivers and supply chain practices to stimulate growth. During the second phase, the model will be validated by several companies. They will discuss the framework and provide business cases to illustrate the theoretical findings.

The puzzle rather than the pieces

By formulating the research question the way it has, PwC has given us the opportunity to investigate what it really means in practice, i.e. how the supply chain can play a strategic role and what practices successful companies use,” says Ann. “Our research report will be of interest to academics because it will be the first to describe the puzzle rather than the pieces. And because it will contain inspiring examples and business cases, documented in a structured way, it will also be of practical relevance.

This is precisely what PwC expects from the partnership and its research. Karel: “We want to use the findings to help our clients align their supply chain even more effectively with their other activities, such as sales & marketing, in order to optimise profitable growth over the long term.

More than research

Whilst its focus is first and foremost on research, Karel believes the partnership also offers PwC an opportunity to engage with Vlerick as a business community. “We plan to organise a number of events together. Some of our people are already guest lecturers at the School. This partnership not only gives us increased visibility with the broader Belgian business community, it will also enhance our contacts with the various business communities around one of the leading business schools in the Benelux. And, of course, this collaboration offers additional opportunities to recruit top talent.”

About PwC

PwC firms help organisations and individuals create the value they’re looking for. PwC is a network of companies in 157 countries and has more than 184,000 employees committed to delivering quality in assurance, tax and advisory services. The name PwC is used to refer to the PwC network and/or one or more of its member firms, each of which is a separate legal entity.