Fractional Supply Chain Support

Embedded leadership that drives outcomes, not advice

Fractional Supply Chain Support

Embedded leadership that drives outcomes, not advice

Fractional Supply Chain Support

Embedded Leadership That Drives Outcomes, Not Advice

The Execution Gap in Supply Chain

Supply chain challenges rarely fail due to lack of ideas—they fail due to lack of experienced ownership.

Mid-market and growth-stage companies face a critical dilemma:

They're too large to operate without formal supply chain processes
They're too small to justify hiring a VP of Supply Chain at $250K-$400K+ annually
Their CFO or COO is wearing the supply chain hat part-time, alongside five other priorities
They need strategic leadership, not just tactical firefighting

Meanwhile, urgent problems compound:

Inventory grows 40% faster than revenue
Stockouts erode customer trust and sales
Cash gets trapped in slow-moving inventory
Cross-functional alignment breaks down between sales, operations, and finance
Executive team lacks visibility into supply chain risks and opportunities

The result: Reactive decision-making, missed targets, and mounting frustration.

U2xAI provides fractional supply chain leadership that embeds directly into your organization, operating as a trusted extension of your executive team—not as an external advisor who delivers a report and disappears.

What We Do

1. Own Cross-Functional Supply Chain Priorities

We take direct accountability for supply chain outcomes spanning demand planning, supply management, inventory optimization, and procurement strategy.

Demand Planning:

Lead monthly demand consensus process (statistical forecast + commercial input + market intelligence)
Manage new product launch forecasting with cross-functional stakeholder alignment
Track forecast accuracy (MAPE/bias) and implement continuous improvement processes
Drive promotional planning and prebuild strategies with sales and marketing

Supply Management:

Establish supplier scorecards (OTIF, quality, lead time, responsiveness)
Negotiate lead times, MOQs, and capacity commitments with strategic suppliers
Build supply continuity plans for critical/sole-source materials
Manage supply escalations and expedite decisions during disruptions

Inventory Optimization:

Set inventory policies (safety stock targets, reorder points, max stock levels) by product segment
Monitor inventory health (aging, excess/obsolete, stockout risk)
Drive working capital reduction initiatives without degrading service levels
Implement ABC/XYZ segmentation and differentiated replenishment strategies

Procurement Strategy:

Lead strategic sourcing initiatives and supplier rationalization projects
Negotiate contracts, payment terms, and volume discounts
Evaluate make vs. buy decisions and outsourcing opportunities
Build cost models to support pricing and margin decisions

Unlike a consultant who provides recommendations, we make these decisions directly—or facilitate them to resolution with your team.

2. Establish Governance Models: S&OP / IBP

Most mid-market companies lack formal Sales & Operations Planning (S&OP) or Integrated Business Planning (IBP) processes. This creates misalignment:

Sales commits to customers without checking inventory availability
Operations builds to a forecast that's weeks out of date
Finance gets surprised by working capital swings and margin erosion

We implement structured S&OP/IBP processes:

Monthly Planning Cadence:

Week 1: Demand review (forecast update with sales input)
Week 2: Supply review (capacity, constraints, inventory positioning)
Week 3: Reconciliation meeting (identify gaps, resolve conflicts)
Week 4: Executive S&OP (present recommended plan, secure leadership alignment)

Cross-Functional Alignment:

Standardized meeting formats with clear decision rights and escalation paths
Shared KPIs that balance conflicting objectives (service vs. inventory vs. cost)
Scenario planning for what-if analysis (demand spike, supply disruption, promotional event)

Integration with Financial Planning:

Link supply chain plans to revenue forecasts, COGS targets, and cash flow projections
Provide early warning of working capital impacts (inventory builds, payment timing)
Support budget vs. actual variance analysis with operational context

Outcome: The executive team operates from a single version of truth, with proactive risk management and aligned priorities.

3. Define and Track KPIs Tied to Business Outcomes

We don't track activity metrics—we track outcome metrics that matter to the business.

Service Level Performance:

OTIF (On-Time In-Full): Measure of customer promise reliability
Fill rate: % of orders shipped complete from stock
Backorder days: Time between promise date and actual ship
Perfect order rate: OTIF + quality + documentation accuracy

Cash & Working Capital:

Inventory turns: COGS / Average inventory (target: industry benchmark + 20%)
Days on hand: Inventory value / Daily COGS (by product category)
Cash conversion cycle: DIO (Days Inventory Outstanding) + DSO - DPO
Excess & obsolete $: Inventory with no usage in 90+ days or below cost recovery threshold

Cost Efficiency:

Freight cost as % of COGS: Inbound + outbound transportation efficiency
Expedite premium $: Cost of emergency shipments (target: <1% of COGS)
Supplier cost variance: Price changes vs. contract or budget
Inventory carrying cost: ~25% of average inventory value annually (warehousing, insurance, obsolescence, capital cost)

Planning Quality:

Forecast accuracy (MAPE): Mean Absolute Percentage Error by product family
Forecast bias: Systematic over/under-forecasting trends
Plan stability: % change in demand plan week-over-week
Supply plan adherence: % of production/procurement executed vs. plan

We build executive dashboards that translate these operational metrics into business impact language leadership understands: revenue at risk, cash tied up, cost leakage, growth constraints.

4. Lead Execution During Critical Periods

Fractional leadership is particularly valuable during high-stakes moments when experienced ownership is non-negotiable:

Growth & Scaling:

Revenue is growing 30%+ annually and supply chain is struggling to keep up
Expanding into new channels (e.g., retail to e-commerce) with different fulfillment requirements
Geographic expansion requiring new suppliers or distribution centers
Challenge: Scaling infrastructure, processes, and team capabilities without breaking existing operations

Transformation & Systems Implementation:

Implementing new ERP (Oracle, SAP, NetSuite) or WMS systems
Transitioning from spreadsheets to formal supply chain planning tools
Migrating from 3PL to in-house fulfillment or vice versa
Challenge: Maintaining business continuity while reengineering core processes

Disruption & Crisis Response:

Supplier bankruptcy or quality failure forcing rapid re-sourcing
Demand shock (sudden spike or collapse) requiring inventory repositioning
Supply chain event (port strike, natural disaster, pandemic) demanding agile response
Challenge: Stabilizing operations while protecting customer relationships and cash flow

M&A Integration:

Integrating acquired company's supply chain into parent operations
Harmonizing supplier base, inventory policies, and planning processes
Realizing cost synergies without disrupting revenue
Challenge: Moving fast while avoiding integration missteps that destroy value

In these moments, you can't afford learning curves or handoff delays. You need someone who has done this before and can drive decisions immediately.

5. Support Leadership Decisions on Systems, Data, and Organization

Supply chain leaders make strategic decisions that have multi-year implications. We provide subject matter expertise to guide these choices:

Systems & Technology Strategy:

ERP selection and implementation roadmap (Oracle Cloud vs. SAP S/4HANA vs. NetSuite)
Advanced planning systems (demand planning, inventory optimization, supply chain analytics)
Warehouse management systems (WMS) evaluation and deployment
Supply chain visibility platforms (real-time tracking, supplier collaboration)
Build vs. buy decisions for custom capabilities

Data Strategy & Architecture:

Master data governance (item master, supplier master, customer master)
Integration architecture (EDI, API, batch file transfers)
Data quality remediation roadmaps
Analytics and reporting infrastructure (data warehouse, BI tools)

Organizational Design & Talent:

Right-size supply chain team structure for current scale and growth trajectory
Define roles and responsibilities (demand planner vs. inventory analyst vs. procurement specialist)
Build job descriptions, interview guides, and onboarding plans
Identify when to hire full-time leadership vs. continue fractional model
Develop career paths and skill development plans

Make-or-Buy Decisions:

Should you outsource fulfillment to a 3PL or build your own warehouse?
Should you manufacture in-house or contract to a CMO/CDMO?
Should you hold inventory in consignment or own it outright?
We build financial models and risk assessments to support data-driven decisions.

How We Operate: The Fractional Engagement Model

Embedded Leadership, Not Periodic Consulting:

We operate as your VP of Supply Chain or Director of Supply Chain, not as external advisors
Attend your executive team meetings, leadership offsites, and board prep sessions
Have direct access to your ERP, planning tools, and data systems
Communicate with your team via internal Slack/Teams channels, not formal email updates
Make or facilitate decisions in real-time, not through scheduled review meetings

Typical Engagement Structure:

10-20 hours per week depending on company size and complexity
Flexible schedule: Available for urgent calls/decisions outside core hours
On-site visits: Quarterly or as needed for key events (supplier audits, warehouse tours, executive offsites)
Duration: 6-18 month engagements with option to extend or transition to full-time hire

Deliverables We Own:

Monthly S&OP deck and executive summary
Quarterly business reviews with KPI tracking and initiative updates
Supplier scorecards and procurement savings reports
Inventory health dashboards and action plans
Demand forecast accuracy reports with root cause analysis

Decision Authority:

We make operational decisions within agreed parameters (e.g., approve POs up to $50K, adjust reorder points, escalate supplier issues)
We recommend strategic decisions (major capital investments, organizational changes, contract negotiations) for executive approval
Clear RACI (Responsible, Accountable, Consulted, Informed) matrices ensure alignment

How This Is Different from Traditional Consulting

Traditional Consultants:

Deliver a PowerPoint deck with recommendations, then leave
Charge $300-$500/hour for analysis with no execution accountability
Require your team to implement everything (but they're already overwhelmed)
Success = report delivered, not outcomes achieved
Limited system access and data visibility
Periodic check-ins, not embedded ownership

U2xAI Fractional Leadership:

Stay accountable for outcomes, not just advice
Own execution: Drive decisions, unblock teams, ensure follow-through
Embedded model: We are part of your team, not external observers
Full system access: Work directly in your ERP, planning tools, and data systems
Real-time responsiveness: Available for urgent decisions, not just scheduled meetings
Success = measurable business impact (inventory reduction, service level improvement, cost savings)

Analogy:

A consultant is like hiring a personal trainer who writes you a workout plan and leaves.
Fractional leadership is like having a coach who shows up to the gym with you, adjusts your form in real-time, and holds you accountable to results.

When You Need Fractional Supply Chain Leadership

This model is ideal for companies in the following situations:

1. You're in Hyper-Growth Mode

Revenue growing 30-100%+ annually
Inventory and working capital growing even faster
Stockouts increasing despite rising inventory levels
Executive team spending 50% of time on supply chain firefighting
You need: Experienced leadership to scale processes without hiring a $300K+ VP prematurely

2. Supply Chain Is the Constraint to Growth

Sales team can't commit to orders due to inventory uncertainty
Long lead times and stockouts causing customer churn
Inability to launch new products on time
You need: Strategic ownership to remove supply chain as a bottleneck

3. You're Burning Cash on Inventory

Inventory balance is 40%+ of annual revenue (should be 15-25% for most businesses)
Slow-moving inventory tying up working capital
Excess stock of wrong items, stockouts of right items
You need: Inventory optimization expertise to free up cash for growth investments

4. Cross-Functional Chaos

Sales and operations don't trust each other's numbers
Finance frustrated by working capital surprises
No formal S&OP process or planning cadence
You need: S&OP governance to create alignment and accountability

5. Systems/Transformation in Flight

Implementing new ERP (Oracle, SAP, NetSuite)
Transitioning fulfillment models (3PL to in-house or vice versa)
M&A integration requiring supply chain harmonization
You need: Experienced program leadership to drive successful outcomes

6. Private Equity Portfolio Company

PE firm acquired the company and needs operational improvement
Mandate to reduce working capital and improve margins
Goal to scale revenue 2-3x ahead of exit
You need: Fractional executive to drive operational value creation

Typical Impact & Outcomes

Companies that engage U2xAI fractional leadership see measurable improvements within 90-180 days:

Inventory Optimization

10-25% reduction in total inventory while maintaining or improving service levels
30-50% reduction in excess & obsolete inventory through clearance strategies and tighter controls
20-40% reduction in stockouts via better demand forecasting and reorder point optimization
15-30 days reduction in DIO (Days Inventory Outstanding), freeing up cash for growth

Example: A $50M industrial distributor reduced inventory from $12M to $9M (25% reduction) while improving fill rate from 87% to 94%. This freed up $3M in cash for expansion into adjacent markets.

Service Level & Customer Satisfaction

OTIF improvement from 80-85% to 95%+ through better demand-supply alignment
50-70% reduction in backorders and late shipments
Faster order-to-cash cycle as stockouts decrease and fulfillment becomes more predictable
Improved NPS and customer retention as delivery reliability increases

Example: A $30M e-commerce company improved OTIF from 82% to 96% within 6 months, resulting in a 15% increase in repeat purchase rate and $2M additional revenue.

Cost Efficiency & Margin Improvement

5-15% reduction in supply chain costs (freight, expedite fees, carrying costs)
3-8% improvement in gross margin through better procurement negotiations and reduced markdowns
Elimination of emergency airfreight and weekend warehouse labor (90%+ reduction in expedite costs)
Supplier cost savings of 10-20% through strategic sourcing and contract renegotiation

Example: A $75M CPG brand reduced expedite freight from $400K/year to $50K/year (88% reduction) and negotiated 12% cost reductions with top 10 suppliers, saving $900K annually.

Organizational & Governance Improvements

Faster decision-making: Cross-functional issues resolved in days, not weeks
Clear ownership and accountability: No more "not my job" when problems arise
Executive confidence: Leadership has visibility and trust in supply chain plans
Reduced firefighting: 50-70% less time spent on urgent escalations

Example: A $40M SaaS hardware company implemented monthly S&OP, reducing exec team time on supply chain topics from 8 hours/week to 2 hours/week while improving plan accuracy and alignment.

Speed of Response to Market Changes

Faster response to demand shifts: Adjust inventory positioning in weeks, not quarters
Proactive supply risk management: Identify supplier issues before they cause stockouts
Agile promotional planning: Prebuild inventory ahead of sales events without overbuy risk
Rapid new product launches: Reduce time-to-market from 6 months to 3 months

Example: A $60M outdoor gear company detected a supplier quality issue 3 weeks before it would have caused stockouts, re-sourced from an alternate supplier, and avoided $800K in lost sales.

Real-World Scenarios (Anonymized)

Scenario 1: PE-Backed Industrial Distributor

Situation:

$80M revenue, 15% EBITDA
Inventory at $18M (22% of revenue), PE firm target was $12M
OTIF at 79%, customer complaints rising
CFO managing supply chain part-time alongside finance responsibilities

Engagement:

15 hours/week fractional leadership for 12 months
Implemented S&OP, rebuilt demand forecasting process
ABC segmentation and differentiated replenishment policies
Supplier scorecard system with quarterly business reviews

Results:

Inventory reduced to $12.5M (30% reduction, $5.5M cash freed up)
OTIF improved to 92%
Forecast accuracy improved from 65% MAPE to 48% MAPE
PE firm achieved 2x exit multiple improvement (supply chain risk eliminated)

Scenario 2: E-Commerce Growth Company

Situation:

$25M revenue growing 60% YoY
Stockouts on 20% of SKUs while sitting on $2M in slow-moving inventory
No formal demand planning; Excel-based "gut feel" ordering
Warehouse at 95% capacity, blocking new product launches

Engagement:

12 hours/week fractional leadership for 9 months
Built statistical forecasting models with promotional uplift logic
Implemented safety stock and reorder point calculations by SKU
Led 3PL transition to increase capacity and reduce per-unit costs

Results:

Stockout rate dropped from 20% to 4%
Inventory turns increased from 4x to 6.5x
Warehouse capacity utilization optimized to 75% (room for growth)
Revenue grew to $40M without proportional inventory increase

Scenario 3: Manufacturing Company (ERP Implementation)

Situation:

$120M manufacturer transitioning from legacy AS400 to Oracle Cloud ERP
9-month implementation timeline with high risk of disruption
No internal supply chain leader with ERP implementation experience
Operations team overwhelmed with BAU + transformation

Engagement:

20 hours/week fractional leadership during implementation (12 months)
Defined future-state supply chain processes and data architecture
Led user acceptance testing (UAT) for supply chain modules
Managed cutover planning and go-live stabilization

Results:

Go-live completed on time with <2% order disruption
Inventory accuracy improved from 89% to 97% post-go-live
Order processing cycle time reduced 40% (automated workflows)
Team trained and confident in new system within 60 days

Transition Path: From Fractional to Full-Time

Many companies start with fractional leadership and eventually transition to a full-time hire. We support both models:

Option 1: Fractional Until Scale Justifies Full-Time
Continue fractional engagement until revenue reaches $100M+ or supply chain complexity demands full-time leadership. We help you build the business case and hire when the time is right.

Option 2: Build-to-Hire Model
We establish processes, systems, and team structure during the fractional period, then help recruit and onboard your full-time VP/Director of Supply Chain. We can stay on for 90 days post-hire to ensure smooth transition.

Option 3: Long-Term Fractional Partnership
Some companies prefer the flexibility and cost efficiency of fractional leadership indefinitely. We can scale hours up/down based on business cycles and strategic initiatives.

We're incentivized to make you successful, not to maximize billable hours.