Supply Chain FAQ’s
A supply chain is the end-to-end network of suppliers, facilities, inventory, transport and information that converts raw materials into finished goods and delivers them to customers. The Council of Supply Chain Management Professionals (CSCMP) defines supply chain management as “the integration of supply and demand management within and across companies, encompassing sourcing and procurement, conversion, logistics management, and coordination with channel partners.” For manufacturers and distributors, it isn’t a back-office function — it’s the system that determines how much cash is tied up in stock, how reliably orders are fulfilled, and how much margin survives from factory gate to customer.
That’s why the supply chain matters most to asset- and inventory-intensive businesses. Inventory, plant, and equipment typically represent the largest share of working capital and fixed assets on the balance sheet, so even modest improvements in demand planning, inventory policy, and cost-to-serve flow directly through to cash flow, return on assets, and bottom-line profit. A well-managed supply chain reduces holding and obsolescence costs, lifts service levels and on-time delivery, and builds resilience against supplier disruption and demand volatility. A poorly managed one quietly erodes margin through excess stock, expediting costs, and stockouts. That’s why supply chain performance is increasingly treated as a strategic, board-level priority for capital-intensive manufacturing and distribution businesses, rather than a purely operational concern. Ogilvie has developed a proprietary supply chain model that underpins all our work. Whether that be with building resilience in your supply chain or selecting and implementing your ERP software system, the model helps drive all your decision making and improvement efforts.
Supply chain management consulting is the practice of engaging a specialist supply chain consultant to assess, design, and improve the systems, processes, and strategies that govern how goods, materials, information and money move through your business, from supplier to customer.
Unlike the larger consulting firms that apply generic frameworks, Ogilvie brings cross-industry experience and deep supply chain consulting and operational knowledge to each engagement that internal teams are often too close to see clearly, or too resource-constrained to solve systematically.
For inventory- and asset-intensive businesses like manufacturers, distributors, and project or maintenance service firms, this typically means identifying inefficiencies in procurement, inventory management, demand planning, supplier relationships, or logistics, and translating those findings into practical improvements that reduce costs and risk while enhancing customer service and profitability.
Common triggers include rising inventory costs without a corresponding improvement in service levels, frequent stockouts, production line stoppages or constraints, overstock situations, unreliable suppliers, poor visibility across the supply chain, or a business change, such as a new product line, acquisition, or market expansion, that your current supply chain wasn’t designed to support. In each of these situations, an experienced supply chain consultant’s external perspective is invaluable.
If you are experiencing rising costs without service improvement, or if your business has grown beyond the supply chain that served you well at a smaller scale, supply chain optimisation delivered by an independent adviser can restore profitability and service simultaneously.
Businesses seeking an inventory management consultant or inventory optimisation consulting often find that the root cause lies not in their ERP system but in their upstream supply chain processes, where Ogilvie’s 4V Supply Chain Model™ delivers the most value. Reach out to us to arrange a conversation about how the model can help your business: Ogilvie.ai/contactus
Supply chain resilience is an organisation’s ability to anticipate, prepare for, and rapidly recover from disruptions to the flow of goods, materials, and services it depends on to operate. Supply chain analysis is the first step in building resilience, understanding the flow of goods, information, risks and vulnerabilities before designing mitigations.
Ogilvie assists clients to conduct a structured supply chain risk assessment to identify vulnerabilities before they become crises, whether caused by single-source suppliers, logistics concentration, geopolitical events such as war, or demand volatility.
These disruptions can ripple through an entire operation. They can halt production lines, delay project timelines, or leave warehouse shelves critically understocked. For inventory and asset-intensive businesses, the stakes are particularly high: a single missing component can idle production lines, stall a maintenance crew, or cause a distribution centre to miss fulfilment windows, all of which translate directly into lost revenue and damaged customer relationships.
Ogilvie helps clients develop their supply chain strategy so resiliency is built into their processes, and tweaks their ERP system’s configuration settings to execute that strategy. Ogilvie’s supply chain risk management consulting work is grounded in the 4V Supply Chain Model™, which embeds resilience thinking into strategy, process and system configuration.
Combining ERP systems and supply chain strategies is Ogilvie’s core strength and a key differentiator and competitive advantage. Many technology advisors are in the market, but none offer supply chain management services that combine the ability to understand and implement technology with the ability to deliver operational and supply chain improvements, as we do.
Ogilvie combines deep technology expertise with genuine operational and process-improvement capabilities. Our supply chain consulting practice is built around the belief that technology alone does not deliver supply chain improvement; process, data and people do.
Our competitors measure success by “go-live.” That’s not good enough for us; we believe the business must be better off for taking on the risk and effort required to evaluate, select, and implement such a large program of work. Too many go-lives mean goods aren’t shipped, goods are shipped to the wrong address, goods are shipped at the wrong price and many other issues. Our supply chain management consulting approach measures success not by hitting the go-live date, but by measurable improvements in profitability, service, and operational efficiency.
Growing revenue without growing profit is one of the most common, and most frustrating, challenges facing executives in manufacturing and distribution. If your top line is climbing while your bottom line stays flat or shrinks, the cause is almost always margin leakage: the cost of serving customers rising quietly alongside revenue, often faster than revenue itself, until it’s actually measured.
The problem is that standard financial reporting rarely surfaces this. Revenue looks healthy at the aggregate level, so the warning signs go unnoticed. A cost-to-serve analysis, examining true profitability by customer and product combination, rather than in aggregate, is the standard way to find where the leakage is happening. Research consistently shows that in most businesses, between 20% and 30% of customers are unprofitable once you account for the full cost of serving them: freight, handling, order complexity, returns and account management overhead.
Common leaks include freight absorbed without being recovered in price, rebates and discounts that started as exceptions and quietly became entitlements, custom packaging or expedited service provided without a corresponding charge, payment terms and pricing agreements left unreviewed for years, and minimum-order or small-order fees that exist on paper but aren’t enforced in practice.
This pattern shows up even when management is actively trying to protect margin. One multi-billion-dollar building products manufacturer raised prices to cover rising raw material costs and still saw no improvement in overall margin, the increase was simply being absorbed by exactly these kinds of undetected costs elsewhere in the business. The fix isn’t more revenue; it’s visibility. Once cost-to-serve is mapped by customer and product, you can see precisely which relationships are funding the business and which are quietly taxing it, and act accordingly through pricing, service redesign or renegotiated terms.
This is exactly what Ogilvie’s cost-to-serve analysis is designed to solve. We work with manufacturers and distributors to identify exactly where profit is leaking, by customer, product line or channel, and give executives the clarity they need to make better decisions about pricing, terms and where to focus growth efforts.
If your sales are growing but your profit isn’t keeping pace, a cost-to-serve review is likely the most valuable conversation you can have right now. Start that conversation at Ogilvie.ai/contactus.