A supply chain transformation changes how a company plans, sources, makes, moves and measures its goods, usually alongside new planning and execution software. The process runs in six stages: diagnose, design, select technology, pilot, scale, and measure the results against a baseline taken before any work began. Hire consultants for the specific gaps you have, such as benchmarking, network modeling or implementation capacity. Keep the baseline, the design decisions and the cutover plan inside the company. Much of the published advice on this topic comes from firms that sell the work, including the firm pages cited below.
What a supply chain transformation changes
A common neutral vocabulary is the Supply Chain Operations Reference model, maintained by ASCM, the Association for Supply Chain Management. ASCM's SCOR Digital Standard introduction, SCOR Version 14.0 (2025), says on page iv that SCOR "was established in 1996" and "links business processes, metrics, best practices, and technology into a unified structure." The same page names seven management processes: Orchestrate, Plan, Order, Source, Transform, Fulfill and Return.
Older material uses the earlier set of Plan, Source, Make, Deliver, Return and Enable. ASCM's list of changes (page ix) says it "Added Orchestrate," "Separated Deliver into Order and Fulfill" and "Expanded Make to Transform." MH&L reported the release of the new standard on September 21, 2022.
SCOR also gives you the scorecard. Version 14.0 (pages vii and viii) groups eight performance attributes into three categories, and each attribute has at least one level-1 metric:
| Category | Attributes | Examples of level-1 metrics |
|---|---|---|
| Resilience | Reliability, Responsiveness, Agility | Perfect Order Fulfillment, Order Fulfillment Cycle Time, Supply Chain Agility |
| Economic | Costs, Profit, Assets | Total Supply Chain Management Costs, EBIT as a Percent of Revenue, Cash-to-Cash Cycle Time |
| Sustainability | Environmental, Social | GHG Emissions, Waste Generation, Training |
A transformation that reports only cost has measured one of the eight attributes. The CIOPages article on supply chain KPIs lists every level-1 metric and the operational measures that sit beside them.
The public-policy case for resilience work is in the White House 100-day supply chain review, June 2021. Page 7 defines the goal: "A resilient supply chain is one that recovers quickly from an unexpected event." The same page says that a private sector and public policy approach that "prioritized efficiency and low costs over security, sustainability and resilience" produced the risks the report found. The review covered four products: semiconductors, large capacity batteries, critical minerals and materials, and pharmaceuticals.
The supply chain transformation process, stage by stage
| Stage | Question it answers | Output you should own |
|---|---|---|
| 1. Diagnose | Where do we stand on the SCOR attributes, and why? | A dated baseline for each level-1 metric, with its data source |
| 2. Design | What network, planning process, sourcing strategy and operating model do we want? | A target design with the trade-offs written down |
| 3. Technology | Which systems carry the new design? | Requirements tied to design decisions, then a selection |
| 4. Pilot | Does the design work in one region or product family? | Pilot results against the baseline |
| 5. Scale | Can the rest of the business adopt it without a service failure? | A wave plan with go and no-go criteria for each cutover |
| 6. Measure | Did the level-1 metrics move, and did the money arrive? | A benefits report on the same definitions as the baseline |
Diagnose. Measure the level-1 metrics before anyone proposes a solution. Use your own data. SCOR is a starting structure, not a finished one: the SCOR introduction (page v) says SCOR "does not attempt to prescribe how an organization should conduct its business," and every organization "will need to extend the model, at least to level 4." The level-2 and level-3 metrics are the diagnostics. ASCM calls the method "metric decomposition or root-causing" (pages viii and ix).
Design. Four areas usually change. The network covers plant, warehouse and supplier locations. Planning covers how demand, supply and inventory decisions are made and by whom, usually through a sales and operations planning cycle. Sourcing covers supplier concentration, dual sourcing and contract terms. The operating model covers who owns the end-to-end result, which is what SCOR's new Orchestrate process describes. Write down what each choice costs on the attributes it does not favor. Holding more safety stock buys reliability and costs asset management.
Technology. Select systems after the design, not before. The usual set is a planning system, the ERP that records orders, inventory and finance, a warehouse management system, a transportation management system, and a visibility layer that tracks shipments and supplier status. The CIOPages article on supply chain technology strategy covers how these layers fit together.
Pilot. Run the new design on one region, plant or product family, with the baseline metrics tracked weekly.
Scale. Each cutover is a risk to customer service. Lamb Weston's 10-K for fiscal 2024 describes what happened when the company moved "order to cash, produce to deliver, source to pay, and inventory management" in North America to a new ERP system in its fiscal third quarter. It "experienced temporary reduced visibility into finished goods inventories at our distribution centers, which affected our ability to fill customer orders." The filing estimates that the transition reduced net sales growth by $135 million and caused approximately $95 million of losses, $72 million after tax. The company had built inventory ahead of the transition. A securities class action followed, alleging misrepresentations about the ERP system's design and implementation, which the company says lacks merit.
Measure. Report the result on the baseline's definitions. Public filings show how hard this is. Hershey's 10-K for 2025 gives exact costs for its Advancing Agility & Automation Initiative, a productivity program approved in February 2024 that targets supply chain and manufacturing spend. It estimates total pre-tax costs of $200 million to $250 million through 2026, reports $176.9 million recognized through December 31, 2025, and expects ongoing annual savings of approximately $400 million when the program ends in 2026. The savings achieved so far appear in the results discussion as "net savings related to our AAA Initiative," without a figure. Costs are given as figures. Savings achieved are described in words. Give one executive ownership of the benefits number from the start.
What the research says about results
Two peer-reviewed studies by Kevin Hendricks and Vinod Singhal give the outside view.
- Hendricks, Singhal and Stratman (2007), Journal of Operations Management 25(1), pp. 65 to 82, studied announced system implementations: 186 ERP, 140 SCM and 80 CRM. The abstract reports that "adopters of SCM system experience positive stock returns as well as improvements in profitability." For ERP it found "some evidence of improvements in profitability but not in stock returns."
- Hendricks and Singhal (2003), Journal of Operations Management 21(5), pp. 501 to 522, studied 519 announcements of supply chain glitches that delayed production or shipments between 1989 and 2000. The announcements were "associated with an abnormal decrease in shareholder value of 10.28%."
Both measure announced events at public companies, and both samples end more than 20 years ago. Neither tells you the odds for your program.
You will also meet the claim that 70% of transformations fail. Hughes (2011) traced it. Mark Hughes reviewed five published sources for that figure in the Journal of Change Management 11(4), 2011, pp. 451 to 464. His abstract concludes that "there is no valid and reliable empirical evidence to support such a narrative." Drop the number from your business case.
When to hire consultants, and when not to
Hire outside help when you lack one of these:
- A benchmark. You need comparable data on the SCOR metrics from companies you cannot call.
- Network modeling. Optimization models for plant and warehouse location need specialist software and people who run them often.
- Implementation capacity. A planning system or ERP rollout needs more configured hours than your team has.
- A neutral voice. Sales, operations and finance disagree on the design and need a facilitator with no stake in the outcome.
Do the work yourself when the question is a decision only your executives can make, such as which customers get priority in a shortage, or when the knowledge has to stay after the consultants leave. The planning process is an example. Put the people who will run the new planning cycle on the team that designs it.
Who sells supply chain transformation
Five kinds of firm sell this work. The examples below are named from each firm's own web pages. The order is not a ranking.
| Type | What they usually sell | How they make money | Examples, from their own pages |
|---|---|---|---|
| Strategy firms | Diagnosis, network and sourcing strategy, operating model | Senior teams on short engagements | Bain, which acquired Proxima, a UK procurement and supply chain consultancy, on May 31, 2022 |
| Big Four | Strategy through implementation, plus risk and tax work | Large blended teams across strategy and implementation | Deloitte, EY |
| Systems integrators | Software implementation and ongoing operation | Implementation hours and managed services | Accenture, IBM Consulting, which describes itself as "a global consultancy within a technology company" |
| Software vendors' services arms | Implementation of their own product | Services fees attached to a software subscription | Kinaxis, whose services page offers "a team of RapidResponse experts," its planning software |
| Boutiques | Narrow specialties such as procurement, network modeling or one planning product | Small specialist teams | Check ownership: Proxima above is now part of Bain |
Each type has a commercial interest in a particular answer. A systems integrator earns more when the answer is a large implementation. A vendor's services arm will design around its own product. A strategy firm's work ends with a recommendation, and someone else carries the risk of delivering it.
The same interest shapes what the firms publish. Bain's operations page displays "17x average ROI for transformation projects" and "4,000+ completed operations programs." The page does not say how the ROI figure was calculated. Treat any firm's outcome statistic the same way until you have seen its method.
How consultants price the work
Three structures cover most contracts. US federal procurement rules give neutral definitions of the first two.
- Time and materials. You pay fixed hourly rates for the hours worked. FAR 16.601 says this type "provides no positive profit incentive to the contractor for cost control or labor efficiency," so the buyer has to supervise closely. It suits diagnosis work whose scope is unclear.
- Fixed price. You pay an agreed price for defined deliverables. FAR 16.202-1 says a firm-fixed-price contract "places upon the contractor maximum risk and full responsibility for all costs." It suits a network study or a pilot with a clear scope. Expect change orders when the scope moves.
- Outcome-based fees. Part of the fee depends on a measured result, such as inventory reduction or savings. This only works if the baseline, the metric definitions and the measurement period are written into the contract before work starts. Otherwise the firm and you will argue about whose actions moved the number.
When a software vendor's services arm bids, ask how the implementation fee and the subscription are priced, and whether the discount on one depends on buying the other.
Questions to ask before you sign
- Who on your team will do the work each week, and what share of their time is on our engagement?
- Which software vendors pay you referral fees, resale margin or alliance funding, and which of them are you recommending to us?
- What did your last three clients' level-1 metrics look like a year after you left? Can we call those clients?
- Which deliverables do we own outright, including models, data and configuration?
- How is your fee tied to our baseline, and who certifies the measurement?
- What will you not do? Ask them to name the work they would advise us to keep in-house.
- For any statistic in your proposal, where is the method?
Keep the baseline in your own hands
A transformation succeeds or fails on numbers you took before it started. Measure the SCOR attributes yourself. Write down the design trade-offs. Make the cutover plan include a go and no-go test for customer service. Buy outside help for the gaps, and keep the benefits report with an executive who will still be there when the consultants leave.
Frequently asked questions
What are the steps in a supply chain transformation? Diagnose, design, select technology, pilot, scale and measure. The design covers network, planning, sourcing and operating model. Measurement should use the same metric definitions as the baseline. ASCM's SCOR metrics are a neutral set to use.
How do supply chain transformation consultants charge? By time and materials, fixed price for defined deliverables, or a fee partly tied to a measured outcome. Write the baseline into any outcome-based contract.
Do 70% of supply chain transformations fail? The figure has no traceable evidence behind it. Hughes (2011) reviewed five published sources for the 70% claim and concluded that "there is no valid and reliable empirical evidence to support such a narrative."
Sources: ASCM, "SCOR Digital Standard: introduction and front matter", SCOR Version 14.0, CC BY-NC-ND 4.0, 2025, pages iv to ix. MH&L Staff, "New SCOR Digital Standard Updated, First Time Since 1996", September 21, 2022, for the release date only. The White House, "Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad-Based Growth", June 2021, page 7. Lamb Weston Holdings, Form 10-K for the fiscal year ended May 26, 2024, filed July 24, 2024. The Hershey Company, Form 10-K for 2025, filed February 17, 2026. Hendricks, Singhal and Stratman, Journal of Operations Management 25(1), 2007, doi:10.1016/j.jom.2006.02.002. Hendricks and Singhal, Journal of Operations Management 21(5), 2003, doi:10.1016/j.jom.2003.02.003. Hughes, Journal of Change Management 11(4), 2011, doi:10.1080/14697017.2011.630506; the abstract was read, not the full text. FAR 16.601 and FAR 16.202-1, read October 22, 2026. Firm pages read October 22, 2026. What would make this wrong, and when: Hershey's 10-K for 2026, due around February 2027, should report the AAA Initiative's conclusion; replace the expected-savings figure with what it reports. Re-check the SCOR process list and attributes when ASCM publishes a version after 14.0. The FAR is being rewritten under the Revolutionary FAR Overhaul; if part 16 is renumbered, update the two FAR links. Firm service pages change often; re-check each link before republishing.
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