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21st Century Supply Chain

1,027 posts
by Joe Cannata

Kinaxis Certification SequelIt’s always a summer of sequels at the cinema box office. Whether it is your favorite comic book action film from Marvel, a third Star Trek film, finding Dory’s parents, more Conjuring, an alien resurgence or even more of Jason Bourne, there always seems to be another story to tell. Back on January 13th, my Let’s Talk Certification blog detailed the announcement and the launch of the Kinaxis Certification Program, with our two original exams, Certified RapidResponse Author Level 1 and Certified RapidResponse Administrator Level 1. We rolled those out at KinectED, our annual knowledge sharing event for Kinaxis employees and partners. There was a lot of interest, a lot of studying, and a whole lot more of exams being delivered. My version of a sequel is to update our readers on how we have evolved since January.


Certification Sequal 1


Here are some of the candidates taking the exam back in January


We started at a count of 1, with our own Senior Solution Consultant, Graeme Walker, receiving the first Kinaxis Certification.


Certification Sequal 2


It is now six months later, and the program has had great adoption, steady growth, and a broad expansion. We have a total of four exams, with the two newest being Certified RapidResponse Contributor Level 1 and our first high stakes proctored exam, Certified RapidResponse Author Level 2. Since the launch, we’ve certified over 215 individuals, and handed out over 375 credentials to our candidates. We’ve certified people across the globe, from many different customers and partners. We also have certified a large contingent from within Kinaxis, demonstrating their superior knowledge of RapidResponse. As the base of RapidResponse users, consultants, support people and Center of Excellence staff grows, so does the interest in the program. Information about the program is readily available. There is full explanation on the Kinaxis website in the Certification section.


We have expanded our presence in the Supply Chain Expert Community with a dedicated page for certification. From that page you can see some statistics and certification facts, access and download the exam study guides and references, and watch a few videos. There is even a video to explain how to add your Kinaxis certifications to your Community profile, so you can show off your mastery to others.


We have a certification portal, CertMetrics, which enables you to perform many activities:


  • Download your certificate and logo
  • Post your certification to your LinkedIn profile with one click
  • Get and send a transcript of your credentials
  • Set your opt-in choices

Access to CertMetrics is granted when you achieve your first credential. An automatic email is sent 1-2 business days after completion of your exam.


Kinaxis CertifiedWith our first Level 2 exam, now the program includes testing with Pearson VUE, at any of their 5000+ worldwide locations. All level 2 exams and above will be delivered in proctored environments at Pearson VUE testing centers.


Watch for us at Kinexions `16, where we will be offering certification testing from 8am – 5pm Monday through Wednesday and 8am – 4pm on Thursday. All exams will be available at a 25% discount during the event.


I would love to hear your comments about our program. Please email me directly with your feedback or questions, or send it to our certification inbox


The post Let’s talk certification, the sequel appeared first on The 21st Century Supply Chain.




Originally posted by Joe Cannata at

by Alexa Cheater

Supply Chain Lessons


Inheriting an organization facing one of the toughest retail environments in history, Mike Duke helped Walmart, the world’s largest retailer and biggest private employer, navigate an intense period of economic, social, and technological change while delivering strong financial results. As CEO from 2009 to 2014, he worked to restructure the company and made sure it not only grew, but grew with integrity.


Named one of Forbes top 10 most powerful people in 2013, Duke built his expertise by learning from and interacting with everyone—from world leaders to first time Walmart customers. Coming from a logistics and distribution background, he helped the company enter Africa and grow in China, Latin America, and other markets.


As one of the keynote speakers during Gartner’s Supply Chain Executive Conference, he shared seven important lessons he’s learned over the years. While not directly about supply chain, they can all easily be applied to managing the complexities of this rapidly changing industry.


  1. Get Things Done

A lesson taught to Duke from his parents, the importance of hard work shouldn’t be underestimated. When it comes to supply chains, changes to the plan are inevitable, but the key to successfully overcoming unexpected challenges is to respond effectively and efficiently. That means getting the information you need quickly in order to make an educated decision collaboratively and with context.


  1. Know Your Strengths

A lesson Duke learned from his high school physics teacher, is once you know your strengths, leverage them. When it comes to supply chain, it’s all about knowing your market segmentation. Is there a particular geographic location you tend to perform better in? Is one product out performing another? It’s not necessarily about only focusing on those areas you excel at, since then you’d be limiting your growth potential, but rather, about examining those strengths in your supply chain to see if and how you can leverage learned best practices to improve other aspects.


  1. Focus on People

Walmart was built on the founding principle that everything the company does should have the customers’ best interests at heart. So should your supply chain. With the growing trend toward consumers wanting what they want, when they want it, and where they want it, your supply chain has to be adaptable and agile enough to meet those demands. By getting to know your end customer better, you’ll be able to make adjustments to your processes to serve them better. Speak to customers and colleague about what’s really going on. Then take those insights and put them into action to directly improve customer satisfaction levels.


  1. Set Aggressive Goals

By aiming high and providing a clear path to get there, you can help your supply chain grow. Allow your team to rise to the challenge and find innovative new ways to reach those stretch goals. But don’t be afraid of failure. One of Duke’s other words of wisdom is to fail quickly. Once you know something isn’t working, don’t be afraid to pull the plug and try something new. Experiment, evaluate, and repeat.


  1. Always be a Student

I’m a firm believer there is always something more to learn, and it would seem so is Duke. He explained how he took every opportunity to learn about his customers. He would go to various stores and speak with staff and customers. There’s benefit to doing the same with your supply chain. Learn from your suppliers and customers, and then take that knowledge and use it to improve your efficiency. Don’t be afraid to learn from others within your organization. Duke mentioned some of his most valuable lessons came from teammates, as they often have experience in areas you may not.


  1. Do Business With Integrity

Duke says this was probably his most important lesson. Act with integrity when dealing with customers and staff. In supply chain, this can be connected to the increasing push for supply chains to be transparent, sustainable, and ethically responsible. Know the impact your supply chain has on the environment and all the people along the way—right down to the worker who is harvesting the raw materials. Visibility is the key to achieving this, and only looking at your top tier suppliers is no longer enough.


  1. Trust Your Family

In this case, your team is your family. You have to trust and respect the people you work with. You have to believe they are doing their best for the business, just like you are. By building that trust, you build stronger relationships, and by building stronger relationships, you allow your team to work more collaboratively, more effectively, and ultimately, in a manner that’s more profitable for your supply chain. We’ve mentioned it countless times on this blog, but with the supply chain talent wars heating up, your team has rapidly become your most valuable asset in managing your operations. So make sure you treat them well.


What life lessons have you learned that translate to supply chain management best practices? Let us know in the comments.

The post Seven Supply Chain Lessons from a Former Walmart CEO appeared first on The 21st Century Supply Chain.




Originally posted by Alexa Cheater at

by Melissa Clow

This guest post comes to us from Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management.


Everyone knows the Supply Chain field is changing. Recently, one of the best Supply Chain Publications out of the U.S., Supply Chain 24/7, released a report that examines the demographic trends underlying the industry. The report, titled “A Portrait of the Supply Chain Manager,” used research survey data from Peerless Research Group and APICS to present a picture of the typical individual working in Supply Chain. The survey asked a number of Supply Chain and talent-related questions, such as:


  • What percentage of Supply Chain professionals received a raise last year?
  • What percentage of Supply Chain managers hold a degree?
  • What percentage of companies are willing to pay above-market compensation for the right people?

And more. These issues are sure to be of interest, whether you’re looking to hire in Supply Chain or just to get a holistic picture of the field. So we put together this spiffy infographic that highlights the answers to these questions and some other interesting datapoints from the report. Check out the infographic below!




supply chain


We hope you found the infographic informative, and we encourage you to dig into the full report for even more insights about where Supply Chain professionals stand and where the field is going. And (as always) stay tuned for more info and perspective about Supply Chain and talent from Argentus in the coming days and weeks!

The post Infographic: Examining the Demographics of the Supply Chain Industry appeared first on The 21st Century Supply Chain.




Originally posted by Melissa Clow at

by Dr. Madhav Durbha

Supply Chain Control TowerAs I finished dinner, I was ready for some entertainment. What better entertainment is there than the latest scoop on the US Presidential election! This thing is more exciting than “House of Cards” season 4. Well,  I have to say this. That season 4 was flat. Ok… I digress. I switched on the TV in anticipation. “…. when we return from the break” said the cheerful TV anchor. Then started the commercial break.


As I was getting ready to switch channels, this ad started playing.  A group of armed masked men storm into a bank. The customers downed to the floor in fear. They look at the man in the uniform and ask him to do something. The man in the uniform nonchalantly reports back saying “I am not a security guard… I am a security ‘monitor’. I only notify people when there is a robbery”. Then he goes on to announce “There is a robbery” as the confused robbers and customers look at each other. Then comes the text “WHY MONITOR A PROBLEM IF YOU CAN’T FIX IT?”


So true! Why monitor when you can’t fix? That made me think of my credit monitoring service. Yes, I do get quite a few alerts. But most of them don’t tell me what to do about them. A bit like some of the supply chain control towers in the market. They alert you about a problem. But they do nothing to fix it… sort of like the “security monitor” in that ad.  Yes. “Monitoring” is necessary for a control tower, but not sufficient. A best in-class supply chain control tower enables a “Plan, Monitor, Respond” paradigm. This type of control tower “monitors” the internal and external environment for threats or surprises that could derail the supply chain “plan”. The threat could be a developing weather pattern delaying shipments, a promotion performing exceedingly well resulting in out of stocks, a production line going down, or a potential miss from the budget plan three months out.


The true differentiation for a best in class control tower is in the “Respond” part. A responsive control tower provides you means to assess the threat in terms of KPIs and financial terms, create scenarios in near real time, and share them with the impacted stakeholders for collaboration. In other words, scenario management, real time capability, and collaboration are integral to what constitutes a best in class “responsive control tower”.


Here is why “scenario creation” is critical. Pretend you are playing a game of chess, when it is your turn to move, would you think about only your next move, or would you also consider next several moves? If you are an above average chess player, you would consider “what if the opponent makes this next move or that next move” before you make your move. In other words, you are creating a mental playbook with a bunch of “what if” scenarios. If you are doing this for a game of chess, why would you not do this to manage your supply chain which is orders of magnitude more complicated than chess? (Sorry chess fans… no offense!).


Now… why does this scenario creation need to be in near real time? Say, you are driving and you encounter a traffic jam, do you think you can wait till tomorrow morning to find the alternate routes? No. Pressing problems require immediate responses. Today’s supply chain problems, if not addressed quickly can result in significant risks to your operations. Hence speed is of essence, which means near real time response. Why collaboration? Because, supply chain management by nature has several roles and actors. One role or actor, while should be able to see the impact of a problem in the end to end supply chain, may not have the ability to solve the problem and hence will have to collaborate with the appropriate actor. In summary, a good control tower’s job is not just to monitor and raise awareness, but also to enable response mechanisms for increasingly complex threats to supply chain.


I was jolted out of my thoughts as my phone buzzed. I looked at the message on the screen. Yet, another cryptic alert saying “an account balance increased by a specified percentage” from my credit monitoring service. I picked up my phone to cancel my monitoring service. I have very little use for a monitoring service with no response mechanism!


The post Is your control tower unresponsive? appeared first on The 21st Century Supply Chain.




Originally posted by Dr. Madhav Durbha at

by Alexa Cheater

Supply Chain SpeedIt’s an old approach seeing a revival in the new digital age—putting the customers’ needs first. All across business, no matter the industry, size, or geographic location, the push is on to return to a more customer-centric business model. Thanks, in part, to the rise of the Internet of Things, customers are more informed than ever before, and they expect to be able to retrieve details about a person, business, or product in seconds. And that need for speed extends beyond just gathering facts on the information highway. They expect to be able to make purchases and receive service in that same lightening quick timeframe.


Companies like Walmart, Nestle, and Carhartt are strengthening their roots in that regard, building on their founding principles of trust, exemplary service, and working hard every day to satisfy the needs of their customers. Customers that are part of their heritage, part of their story, and have been woven into the very fabric of their brands. They understand the need to deliver a complete customer experience, not just a product, and they recognize doing so is more critical to their success than ever before.


All three presented great keynotes at this year’s Gartner Supply Chain Executive Conference, and all three said the same thing. Your supply chain has to be focused on the end customer, and that means developing a comprehensive end-to-end strategy with complete visibility. But the drive to put the customer first isn’t just limited to those who sell directly to the final consumer. Organizations who work in a more business-to-business environment have also recognized the need to listen to their customers and deliver what they want, when and where the want it, and how they want it.


Schneider Electric hosted a session at the same conference on how they’re focusing on building out collaborative planning both upstream and down. Co-planning they call it. They’re involving suppliers and customers in their supply chain in new ways—and seeing success and improvements as a result. These growing customer-focused supply networks are slowly beginning to replace the traditional, linear supply chain which tends to focus on select links in the chain one at a time.


For Schneider their people are changing processes to support this new level of collaboration or in their case co-planning. The challenge they face is finding supply chain technology to keep up with this new pace.


Faster Results


As one of my colleagues so aptly explains it, if you typed something into Google, would you be satisfied waiting days or even weeks for the answer? Heck no! So why is that kind of time delay acceptable in your supply chain? Supply chains are complex, they involve vast amounts of data from different sources, and there are hundreds or more variables involved in every decision. It’s frustrating to wait weeks for an answer, especially if it’s the wrong one. Systems utilizing in-memory computing, robust analytics, and the ability to run multiple what-if scenarios in a sandbox like environment means an answer to your question in minutes.


Easy Scenario Comparisons


Once your Google search has returned results, you expect to be able to see more than one result at a time. Could you imagine the increasing frustration to have to re-run the search over and over again just to see all the possible answers so you can compare them? That’s what it can be like for some using legacy enterprise resource planning (ERP) systems. But with advancements in the tools available, it is possible to use scorecards to easily compare multiple scenarios, allowing you to quickly see how each compares against a set of key performance metrics.


Speed = Enhanced Collaboration


So now that you’ve found the result you were looking for, what do you do if want to get your colleague’s opinion on it? The old way would be to copy and paste the link from your browser into an email, send that email, and then wait for a reply. Unless you happen to catch them right as they were checking their email, it could be hours, or even days, before you hear back from them. Not ideal when you need to make a critical business decision quickly. The new way is to send that person the link via a social network—like Skype, Twitter, or Facebook. In the supply chain world, where teams are often distributed globally, many are still relying on the old standby of email. But more advanced supply chain software solutions are enhancing collaboration avenues. Now you can send you colleague a message, including the scorecard or scenario results, directly within the tool. Your supply chain software could become your team’s new social platform!


The point is while in nearly every facet of your personal life you demand excellence as a consumer, and strive to provide that same outstanding service level to your own customers, are you settling when it comes to your supply chain tools? If the answer is yes, perhaps it’s time not to.




The post Supply Chain at the Speed of Google appeared first on The 21st Century Supply Chain.




Originally posted by Alexa Cheater at

by Steven J. Puricelli

Last month, I launched a new blog series on sales and operations planning (S&OP). In that introductory post, I outlined a number of important topics that I plan to explore throughout the summer. Building upon the last post about foundational elements behind S&OP, I want to consider a question I get all the time from executives: “who really owns, or should own S&OP”? More broadly speaking, it is important to share some leading practices on the organizational aspects of S&OP that includes three components: 1) proper composition of the team, 2) ownership and who leads the team, and 3) how the team performs effectively.


Team Composition


S&OP is a team sport – period.  S&OP is arguably one of the most cross-functional processes in an organization and requires input from sales, marketing, finance, supply chain, manufacturing and so on. Some of the best S&OP processes include great cross-functional participation and engagement (the latter being much more critical) from across the organization. When it comes to S&OP, the composition of the team I typically see, in some shape or form, at leading organizations is as follows:


SOP Team Composition


In concept, this team diagram should make sense and be logical to most people, but in practice, oftentimes a number of these functions are either under-represented or missing entirely. Getting the right engagement from the organization requires a few things. First, leadership from the top-down communicating about the importance of S&OP to the business and its priority to the executive team is critical. Second, when I said S&OP is a team sport, I didn’t mean a spectator sport.  A well performing S&OP process requires active involvement and contribution to the team, which means engaging in the process and performing the necessary activities and inputs. Finally, in exchange for the inputs and active participation in the process, it’s only fair to return the favor and provide valuable outputs to the team members. After all, most of the team members in the diagram above have day jobs to worry about, so to encourage sales or marketing professionals to engage and provide inputs into the process, make sure some of the outputs create value for them.  Keep in mind the WIFMs (what’s in it for me) for the team, it will help with the engagement.




The challenge with team-based processes in companies today usually comes down to ownership and alignment of goals and incentives. Oftentimes management’s philosophy is that “the team owns the S&OP process”, which anyone who has spent time working in the corporate world today understands that means nobody owns the process. To help illustrate the point, let’s step outside of the corporate world for a minute and look at how teams in other settings perform.


When I’m not consulting, I like to cook and explore new restaurants around the world. Naturally, the consultant in me drives a curiosity to understand what’s going on behind the scenes in kitchens with the team of individuals preparing my food. The kitchen staff at restaurants is structured around a very distinct hierarchy with a clear chain of command, similar to a military unit. Each person in the kitchen has clearly defined roles and responsibilities, with ownership ultimately falling on the chef de cuisine (or literally ‘chief of the kitchen’).


It is also true in sports, such as football. Every player has a defined position on the field with defined actions or routes to execute for each play. The quarterback serves as the team lead on the field directing and organizing the players based on inputs from the sidelines. The hierarchy extends to the coaching staff through the offensive or defensive coordinators and ultimately to the coach – the one person with overall ownership and accountability for wins and losses.


In these two examples, there is a clear chain of command and there is a defined team lead and obvious process owner. When it comes to S&OP, the same assignments are needed – one to lead the process and one to own it. First, the S&OP process lead (the single person who champions the process – or the quarterback) is typically in planning, specifically supply planning.  Planning departments often vary in how they are structured, so sometimes demand planning leads the process. Either way, the head of planning (demand or supply) is what I typically see in high performing S&OP processes.  Second, the owner of the process often depends on the structure of an organization, but I generally see, and recommend a general manager, brand manager, or divisional president / vice president as the owner.  The primary factor that determines the role is driven by the individual with financial performance responsibility – and accountability (similar to the chef de cuisine at a restaurant or the coach of a football team) over the scope of the S&OP process.


Team Effectiveness


Generally speaking, the examples I noted earlier operate effectively – and by effectively, I mean function smoothly with little ambiguity or confusion. Sure, there are breakdowns within these teams from time to time, but compared to a lot of S&OP processes in organizations today, these are high-performing teams. It’s important to distinguish between an effectively performing team and the skills or talent of the people on the team. It’s worth noting that the skills and talent of a kitchen staff or the players on a football team are certainly important factors that contribute to success, but we will get to that topic in a future post. For now, stay focused on the effectiveness of the team.


What makes these teams operate effectively?  It comes down to incentives and goals and how well the team is aligned to those goals. For a restaurant, everyone on the kitchen staff is trying to serve the customer and provide the best food and dining experience possible. A football team is trying to win – everyone on the team is trying to win, either by scoring points or by preventing the other team from scoring points. In both situations, there are common goals and incentives with which everyone on the team is aligned.


In organizations today, there are rarely common objectives or aligned incentives among a diverse cross-functional team such as S&OP. As a result, the S&OP team often is burdened with sorting out and navigating these differences. Think about it – in most organizations today, there are so many performance metrics (by functional area), yet not one is common across the business.  And certainly there aren’t aligned incentives or common management metrics tied to compensation plans. Defining common metrics for the S&OP team that each department and functional area are measured on, and held accountable to, helps support the effectiveness of the team.


I trust this post provided some new perspectives on how important the organizational aspects of S&OP are to the process and having the right team and owner. I look forward to reading your comments on this topic and to seeing what other perspectives people have on the S&OP organization. In my next post, I’ll explore how to structure and to consider different operating models for S&OP.

The post Who owns S&OP? By Accenture Strategy Guest Blogger appeared first on The 21st Century Supply Chain.




Originally posted by Steven J. Puricelli at

by Alexa Cheater

Supply Chain - Big DataHow much is too much? That’s the question many supply chain practitioners are asking themselves in this world of big data, where a flood of new information is rapidly becoming readily available. It’s now possible to have more details than ever about your suppliers, customers, and even your own operations.


But there’s this concept of data paralysis—where you have so much data you don’t know what to do with it all—and it could actually be crippling your supply chain. If you don’t have the right tools in place, you could fall victim to this phenomenon.


When trying to determine if you’re suffering from information overload, here are a few things to consider:


  1. Are you focused on quantity or quality?

It’s not about how much data you have, but the quality of that data. Instead of being left with “just a big pile of data” as Richard Cushing puts it in his blog on the Supply Chain Expert Community, make sure what you’re collecting actually adds value and insight into your key business metrics. More data doesn’t automatically mean managing it more effectively. In some case, it can mean the opposite.


  1. Is there a centralized, harmonized, data hub?

With all of this data coming in from multiple sources, without a centralized, harmonized, hub to capture and store it, you’re definitely going to fall into the not managing more effectively camp. My colleague Bill Dubois explains it like this. “It’s about bringing up all the information crossing a network into a single, real-time support system so when a company sees a change in demand they can immediately translate it across the entire network.” That means having the ability to easily see all the data, not just the portions of it stored in a particular system. Falling into the trap of having to manually merge data from multiple sources is overly time consuming and dramatically increases the chance for error. And that’s the last thing you want when you’re trying to use the data to make a critical business decision.


  1. How rapidly are you able to analyze incoming data?

The benefits you receive from all this data will be directly related to the speed of information and how quickly and thoroughly you can analyze it. It does you no good to have access to data if you don’t have any way of using it. This is similar to the quantity versus quality point mentioned above, but takes things one step further. Even with the highest quality data in the world, you’re still going to need to understand what it’s telling you. Data scientists and analytics professionals have emerged as sough-after careers in part due to big data demands, but even they often rely on tools to help spot trends. Then comes the decision making element where you act on what the data is telling you.


There’s no doubt big data is revolutionizing supply chain. It’s been a buzz word in the industry for years. Supply chains now have to compete on speed, accuracy, and quality—and as a Forbes article notes, that’s just not possible with traditional legacy enterprise resource planning (ERP) platforms alone. ERPs often cause bottlenecks in the flow of information, and have difficulty scaling to meet today’s supply chain complexity challenges.


To ensure you’re getting the most out of your investment in big data, make sure you have a quality supply chain solution with the ability to centralize and harmonize data, quickly perform analysis (scenario simulation is great!), and allows for a collaborative decision making process. Otherwise, you could fall victim to data paralysis and find yourself trapped by information overload.


How has your business adapted to big data? Do you find yourself with more information than you know what to do with? Let us know in the comments!

The post Information Overload: Is Too Much Data Crippling Your Supply Chain? appeared first on The 21st Century Supply Chain.




Originally posted by Alexa Cheater at

by Meranda Powers

Accenture paper: Supply Chain for a New AgeThe right product, in the right place, at the right time. This age-old challenge of supply chain is now more difficult to address than ever before. Globalization, market volatility, demanding consumers, vast amounts of data—it’s no wonder past strategies are failing to solve today’s realities.


With complexity growing exponentially, supply chains and their associated capabilities need to start evolving now. Not just to solve current problems, but to be better prepared for future ones. But how are companies going to be able to adapt and take advantage of tremendous opportunities to capture market share as well as increase their brand loyalty and overall profitability?


According to Accenture, the answer lies in supply chain evolution. It’s Supply Chain 2.0! In the firm’s recent white paper, Supply Chain For a New Age, the authors, Mohammed Hajibashi and Ashoo Bhatti, map out a next generation supply chain blueprint. As they explain, “getting to the next generation of supply chain capabilities would require breaking down functional silos, redefining priorities, and building synchronized planning and fulfillment capabilities.”


So what is Supply Chain 2.0? Hajibashi and Bhatti describe the characteristics of Supply Chain 2.0 as:


  1. Rapid: Enhanced responsiveness; proactive prevention; last-mile postponement. Examples include demand sensing, automated KPI reporting, real-time planning and execution, dynamic inventory replenishment, and a robotic workforce.
  1. Scalable: Maximum efficiency; organizational flexibility; highly-evolved operating models. Examples include reconfigurable supply networks, lightweight SDA, cloud-hosted optimization tools, and a digital products supply model.
  1. Intelligent: Actionable insights; automated execution; enhanced, accelerated innovation. Examples include predictive maintenance, predictive forecasting, integrated optimization, supply and price analytics, “what-if” scenario analysis, and cognitive computing.
  1. Connected: Real-time visibility; seamless collaboration; personalized experiences. Examples include connected infrastructure, ecosystem collaboration, transportation control tower, social product development, track and trace, and external data exploitation.

Enabling these characteristics are six core building blocks:


  • Rapid and responsive consumer-driven supply chains
  • An integrated operating model that breaks silos and provides connectivity
  • Performance management that’s aligned across the organization
  • Clear and differentiated supply chain segmentation strategies
  • End-to-end collaboration capabilities within the organization and across external trading and service partners
  • Digital capabilities and a technology platform able to support all of this

Clearly, the transformation from current supply chain operating models to Supply Chain 2.0 isn’t going to happen overnight… But not addressing today’s challenges will be an equation for losing revenue. Businesses need to recognize the urgency in moving forward and evolving as the pressure to adapt and survive will only continue to grow.


The Supply Chain 2.0 framework outlined by Accenture can help companies profitably meet future demands. For a more detailed explanation of how, I’d highly recommend giving their new paper a read.




The post It’s Time for Supply Chain 2.0! 4 Characteristics to Watch For appeared first on The 21st Century Supply Chain.




Originally posted by Meranda Powers at

by John Westerveld

What does your planning organization look like? Is it a series of silos?  Individual fiefdoms throwing requirements back and forth over the wall?  What are they spending their time doing?  Are they drudging through the tedious work of placing orders with suppliers?  Releasing orders to the factory?  How much time are the spending truly adding value to the supply chain and how much time are they spending doing simple, mechanical, yet important activities?


Accenture has just released a white paper titled “Supply chain for a new age” which you can get here.  In this paper, the author describes various components of the next generation supply chain and introduces the role of “Network Planners”.


A network planner would have ultimate responsibility for supply chain performance and would oversee all aspects of the supply chain from demand and distribution to detailed component supply for a group of products (a family or region or both).


As you can imagine, traditional supply chain tools and processes would quickly overwhelm any normal human, if they were to try to manage all aspects of the supply chain even for a relatively small set of items.  If the network planner is to be realized, as Accenture points out, we need to have a way of automating the basic tasks and allowing the planner to focus on making key decisions and managing the significant exceptions.


Those basic tasks really do need to be done; accepting new orders, releasing orders, sourcing decisions and supplier collaboration just to name a few. However, these are all things that while important, don’t need significant knowledge or strategic acumen to accomplish.  In other words these activities are things that could be handled automatically, thus freeing up your supply chain staff for the more complex, strategic decisions better suited for the human mind.


How would we go about automating these basic tasks?  Let’s think it through for a few examples;


Accepting new orders: Many companies support web based order entry systems. In many cases, promise dates made to customers are based on fixed delivery lead times and don’t reflect the true availability of the order based on the realities of the supply chain.  Imagine a system where the new orders that come in are automatically assessed and scheduled based on the capability of the entire supply chain.  Orders that are capable of shipping within 2 days of the request date are automatically accepted.  Orders that will be outside of that window are flagged as an exception and handled by a person.


Releasing Orders to manufacturing: Typically orders released to manufacturing need to clear two key hurdles; 1) do I have the raw material or components necessary to make this order? And 2) do I have the capacity needed to release this order?   An automation routine could easily identify the orders that are clear to release and automatically release those orders.  A more advanced system could also schedule the releases to prevent overloading by prebuilding where possible to make use under loaded time periods.


Sourcing decisions and alternate parts: Often there are options when it comes to where to source from.  Those options often come with price impacts, however, those impacts may be acceptable if they are not too great and if the alternative is late or missed delivery.  Automatic selection of a source based on lead time, prioritized by cost could allow you to automate that trade-off between margin and delivery – providing margin is within tolerance.  A more advanced tool introduces the concept of constrained supply.  Allowing the selection of an alternate if the primary source is overloaded….again monitoring margin and alerting if allowable thresholds have been exceeded.  The same applies for use of alternate parts.  In manufacturing, there are often acceptable substitutes that can be used if the preferred item isn’t available.  The use of these substitutes can and should be automated so that a planner doesn’t need to manually manage them.


Collaborating with suppliers: Once supplier agreements are in place, the effort of converting the day-to-day planned requisitions to physical orders to a given supplier should be automatic.  In some cases, supplier agreements have limits in terms of the volume that can be ordered.   With more advanced planning tools, this limit can be automatically respected by constraining the supply coming from that supplier.  Overload can be either rescheduled earlier, routed to another supplier automatically (see sourcing decisions above) or rescheduled later and flagged so that the planner can resolve the issue.   In today’s internet enabled world, key suppliers must be able to view orders, changes and cancellations from their customers via the customer’s supplier portal. The days of paper POs should be long behind us.  When a supplier responds and indicates that they can achieve what’s been requested, these orders should be automatically locked in.  Only when the supplier can’t achieve what’s been requested AND this results in an impact to customer orders or an unacceptably low end-item inventories should the buyer need to step in and look at other resolutions.


With any system that automates decision making, there needs to be oversight to ensure that the decisions being made align with corporate mandates.  This oversight can be basic monitoring of key metrics like margin, late revenue (orders or forecast), inventory levels and overloads / underloads or it could be more specific to the automation that is occurring.  For example, with supplier collaboration, the buyer could be alerted if the supplier rejected the entire order or if the order will be late by more than 10 days. If you were doing automated order promising, you could be alerted if the customer order was going to be more than 2 days later than the requested date.


Supply chain planning is getting more and more complex.  Yet we still primarily plan with software that was developed decades ago.  If we expect to meet the needs of supply chain today and in the future, we will need to look at new tools and new processes.  It’s time.


How do you envision managing tomorrow’s supply chain?  Comment back and let us know.


The post How do you streamline planning for tomorrow’s supply chain? appeared first on The 21st Century Supply Chain.




Originally posted by John Westerveld at

by Dr. Madhav Durbha

Why this is a great time to be a supply chain professional


“Long time bud! Hope all is well” … It was great to hear Tim’s voice after all these years. Tim started his career in supply chain management along with me. After about a decade, he took a different path and branched off from SCM. Thanks to Facebook and Linkedin, we stayed in touch but haven’t talked to each other in a while. But now, out of the blue, he calls me as I was driving home. After exchanging pleasantries, Tim said he is considering pivoting back into supply chain and wanted my opinion on if the timing is right. I told him the timing cannot be any better and gave him my reasons as follows:


1. New supply chain challenges creating new opportunities: Fundamental shifts in technology are remaking supply chains as we know them, bringing together the digital and physical worlds. Here are some examples:


a) 3-D printing is shifting manufacturing to the point of consumption
b) Drone technologies and driverless cars/trucks are expected to revolutionize logistics as we know them. Transportation speeds like never imagined before (think Hyperloop) will be feasible in our lifetime and will shrink lead times significantly
c) Internet of Things (IoT) is enabling proactive asset monitoring and risk mitigation along with precise inventory location tracking
d) Voice and Image recognition, Augmented Reality are reshaping warehouses and Stores as we know them


While this is happening, the business environment is getting more complex and volatile due to rising omnichannel shopping, increasing SKU counts to meet the needs of empowered consumers, dynamic pricing, and personalized promotions, and not to mention geopolitical uncertainties. This is creating an environment wherein the profile of supply chain professionals is rising as boards and CEOs realize that supply chain is a core strategic asset to meet these challenges and supply chain risk management is a must. Chief Supply Chain Officer is now an executive position in more and more organizations.


2. Rise of “Real-time ready” SCM technologies: The above trends are forcing the organizations to rethink the ERP and SCM technologies they put in place over the years. These technologies served organizations well in making progress in individual functional areas. However, they are coming up short with their batch oriented planning, wherein “real-time visibility” is quickly becoming the need of the hour due to the challenges highlighted in #1 above. Two types of real-time supply chain technologies are gaining significant traction:


a) Big data and Machine learning driven events processing technologies listening into external events, social conversations, beacons, and such, digesting the information thus gathered, and elevating supply chain opportunities and risks in near real time
b) In-memory technologies with near real-time always-on planning with end-to-end supply chain visibility and collaboration are collapsing the boundaries between planning and execution as we know them, spelling an end to batch oriented, waterfall like planning and execution


While the organizations are realizing the limitations of their ERP and SCM investments, many are not ready to rip and replace their years of investments. Hence, these “Real-Time Ready” technologies are designed to coexist and build upon the current customer investments and deliver value quickly. This is creating many exciting growth opportunities for thought leading companies producing or leveraging these new generation technologies. This means more exciting opportunities for SCM professionals in both industry and technology domains.


3. Increasing pace of innovation through newer delivery models: Enterprise software that was traditionally installed, configured, and implemented behind the firewall resulted in a large amount of “shelf ware”. This was partly due to conflicting priorities on IT organizations wherein projects got deprioritized resulting in shelved software, and partly due to software vendors offering incentives towards bulk purchase of these modules which take years of implementation. This resulted in a significant gap between the capabilities vendors introduced to the market and the consumption of the same by the user community.


However, “pay as you go” SaaS based delivery models are enabling companies to consume software in bite sizes and immediately start deriving value. SaaS delivery model is also easing the pain associated with upgrades. This goes a long way in ensuring user satisfaction. Satisfied users will demand and consume more innovation perpetuating a positive reinforcement cycle. This creates tremendous opportunities for supply chain professionals, especially those who like to explore newer frontiers.


I am in this business to grow professionally and benefit tremendously from such growth. With so much change in the field of SCM, I am finding that the opportunities to learn and grow are tremendous. As lower ends of the SCM centered on functional planning get commoditized, the opportunity for value creation is migrating towards those who can connect the dots across the entire the value chain and do so in real time. This provides tremendous career opportunities for the intellectually curious SCM professionals. However, we as supply chain professionals need to acknowledge that such opportunity will also come with the responsibility of creating sustainable value for the user community, as opposed to riding the waves of the latest hype.


With my destination in sight, I ended my conversation with Tim on a very bullish note. Tim has the intellectual curiosity to learn and reinvent himself. He has done it before. I am sure he will do it again. With so much happening, the future belongs to the likes of him!


The post Why this is a great time to be a supply chain professional appeared first on The 21st Century Supply Chain.




Originally posted by Dr. Madhav Durbha at

by Alexa Cheater

Supply Chain Sustainability In 2013, global aid organization Oxfam launched the Behind the Brands campaign, aimed at driving awareness about the sustainability practices of some of the world’s largest and most well-known consumer companies. Amplifying the voices of key stakeholders like farmers, consumers, and investors, the campaign called on big brands to take action to improve social and environmental standards in their supply chains.


Three years later and some of these ‘Big 10’ food and beverage companies have made significant progress, as indicated in the changes to Oxfam’s scorecard ranking, but now the push is on to ensure their suppliers actually implement these promises.


As of their 2016 update, Oxfam ranks the companies in this order:


Position BrandScore
#5 (tie)Mars49%
#5 (tie)PepsiCo49%
#7Mondelez International41%
#8General Mills40%
#9 (tie)Associated British Foods36%
#9 (tie)Danone36%



Scores are tallied based on points awarded for their practices in land rights, gender equality, farmers’ rights, living wages, climate change, transparency, and water resource management.


Small steps have been made in many of these areas, but there is so much more that needs to be done—and a lot of questions as to how their supply chains will evolve to meet these growing sustainability commitments. Commitments like changes to commodity sourcing, asking suppliers to work with more small-scale farmers, ambitious greenhouse gas emissions targets, and enhanced global supply chain transparency.


Consumer demand for these types of promises are growing, and companies will need to rapidly establish new business models in their supply chains in order to see continued growth and profitability. That means having complete visibility of their supply chains from suppliers through to customers. But only having eyes into your top tier suppliers isn’t enough anymore. You have to consider every node, every link in the value chain, if you are going to truly be able to deliver on sustainability objectives.


How is something like that going to be possible? Through collaboration—not just across your own business functions, but with suppliers, distributors, and even customers. Changes like the ones required to meet new environmental standards and human rights objectives don’t happen overnight. They don’t happen in silos. And they don’t come without added cost.


In many cases companies are investing millions into sustainability practices. That means have the ability within their supply chain to accurately evaluate trade-off decisions in a timely manner. You need to be able to look at the data in front of you in near real-time and determine which option strikes the best balance between profit and promise keeping.


The road to global supply chain sustainability across all organizations is a long one, but it doesn’t have to be a lonely one. Remember, we’re all in this together—for better or worse we all share the same planet, so we’d best make the best of it.






The post Three Years Later Big Brands Recognize Need for Sustainable Supply Chains appeared first on The 21st Century Supply Chain.




Originally posted by Alexa Cheater at

by John Westerveld

Supply Chain Visibility


Here in Canada, major highways are getting new electronic signs that provide warnings to motorists about upcoming road hazards. One foggy morning, I drove by a sign that declared “REDUCE SPEED – LIMITED VISIBILITY”. Sure enough, the fog was so thick in some places that I needed to drive much slower – I couldn’t see anything beyond my own hood. When you think about it, many supply chain companies operate with the same visibility. They can see things happening within their company, but they have no visibility to what’s happening outside the four walls. Unfortunately for them, the pressures of business means that they have to operate at “normal” speeds otherwise they will lose business.


A few months ago, Kinaxis published an infographic titled Supply Chain Visibility: Seeing is Achieving. It focused on why supply chain practitioners need to have better visibility to do their jobs. I won’t go into details on the infographic except to say that it’s worth reviewing. I did want to add some of my own thoughts about why visibility is so important and why today’s traditional ERP systems are doing such a bad job at providing that visibility.


First let’s talk about what supply chain visibility means. If you can imagine the typical supply chain, you would expect it to be comprised of customers, suppliers, and potentially one or more levels of integrated manufacturing facilities. Imagine an environment where your customer could request a demand change and within seconds, you could see the impact of that change on your entire supply chain…including any plant that contributes to the manufacturing of that item or any supplier that provides components. You could assess impacts to inventory, margin, cost of sales, new purchases, capacity…all within seconds, all within a single system. How would that knowledge affect your ability to confidently accept that new order?


Compare that to traditional supply chains. Many supply chains grow through mergers and acquisitions and as such have a mixed set of ERP systems. Some sites have SAP, others have Oracle. Data flows between nodes using nightly data transfers. This means that a particular change (new order, supply shortage, etc) won’t show up on the other systems until the next day.  Further, any planning adjustments to respond to the change won’t be propagated to the originating system until the day after. Even when the same ERP system is used across multiple sites, data has to be transferred from one site to another sometimes between applications within the same system! Unfortunately supply chain planners and managers still need to make decisions quickly – so they often will turn to Excel with all the inherent issues that causes.


Despite having limited visibility, companies still need to make critical decisions and often do so without knowing the full picture. Imagine on our foggy day scenario, deciding to pull out and pass a slower moving vehicle, without being able to see what’s coming the other way. – sounds like a recipe for disaster, right?


How do you clear the fog? What capabilities do you need for full Supply Chain visibility?


Supply Chain Data – Obviously you need to be able to pull in the data from multiple supply chain data sources into a single system.


Supply Chain Analytics – Having the data isn’t much use if you can’t do anything with it. You need to be able to replicate the analytics used by any ERP system you are getting data from. The tricky part is that the analytics could be based on SAP for some data and Oracle for other data – in the same system.


Reporting – When looking at a supply chain’s worth of data, being able to slice and dice, summarize and find details, search and sort are critical to being able to make good decisions based on that data. You need the ability to have configurable reports that meet the needs of your changing business.


Alerting – With all this data, understanding the critical few issues from the noise of day to day supply chain activity becomes a real challenge. Imagine you have a supplier that supplies a production facility, which makes a component, which goes into an assembly at another plant, which goes into the final product before being shipped to a customer.   It would look something like this….




Now imagine that the supplier has just delayed the delivery date for a key component.  That component shortage has just put a customer order at risk of shipping late. With end-to-end visibility and supply chain analytics that emulate ERP logic, lateness is propagated up through the manufacturing sites to the impacted customer order. Based on that customer order delay, an alert gets triggered which is sent to your planner, master scheduler and customer service representative. Because you have this end to end visibility of the supply chain, rather than simply alerting that a supply order is late (possibly noise), you get an alert that the customer order has been delayed (critical issue).


Scenarios – While not a critical component supporting visibility, having the ability to evaluate different options within scenarios combined with end to end supply chain visibility becomes a very powerful tool.  Now planners can look at different options and understand the impact of one option over the other on the overall supply chain – not just their respective area of influence.


How do you cope with the limited visibility offered by today’s traditional ERP systems? Comment back and let us know!

The post Reduce speed – limited visibility! appeared first on The 21st Century Supply Chain.




Originally posted by John Westerveld at

by Tom Gregorchik

De-segregating the supply chain: Lessons learned in the airI remember while traveling last fall getting that dreaded alert we all hate see on our iPhones. “Flight Delayed” is how the first few words of the text message read. While travelers running late and those hoping to get free vouchers on overbook flights cheered, I went into a mode of figuring out quickly what the best course of action was for me to ensure I got where I needed to be.


I was traveling from Northwest Arkansas airport (XNA) back home to Washington Reagan (DCA) and this alert put me into panic mode because I had to be at my home office for an important customer call the following day and knew there were limited flights available. My original plan had been to leave XNA in the afternoon, connect in Chicago, and arrive back at DCA in the late evening. Now, I had to figure out how to still make that possible.


On my phone, I was able to open up the airline app to determine where all inbound airplanes were and whether they were on time. By tapping on flight statuses between my source and destination locations, I looked for other flight paths with different connecting cities to see if I had any alternatives. I was even able to view seat capacity to see if it was even feasible for me to get on those flights.


I was able to look at any available hotels in the connecting cities in case I got stuck somewhere overnight and needed to take my customer call in the morning in that location before flying home. And best of all, I was able to quickly gauge pricing of all of those alternatives as I went through them. After about eight minutes of evaluating multiple scenarios, I was able to choose the best plan. Since that experience, I find myself always looking at my flights and inbound aircraft so I can know sooner if there is a potential issue with my plans. Luckily, I’ve gone a long time without any major delays (although I’m pretty sure I just jinxed myself with that statement!).


It started to connect with me that travel in today’s day and age relates to many people’s approach to supply chain—both involve many moving parts. There’s supply of airplane seats, planes, and routes.  There’s a supply and demand of hotel rooms. There’s rental cars (and now Uber and Lyft). Thinking back to when I started my career as a supply chain consultant, the travel industry has come a long way with technology to support the traveler. And so has the supply chain.


Thinking about my flight disruption between Northwest Arkansas and Washington Reagan, in the past I would have had to deal with multiple calls to airlines (while likely being on hold for a while) and then more calls to hotels to find an available room within the company budget. Back then, there was some technology available to help, but it still involved a lot of leg work to accomplish your travel goals. Today, any traveler can leverage their smart phone as a single solution with multiple applications to solve their initial problems and react faster when problems arise. The modular problem of the travel industry has been eliminated.


So just as the module problem was eliminated within the travel industry, imagine a world where supply chain management has a similar type of solution. There have been modular solutions to solve for demand planning, supply planning, master production scheduling, inventory optimization, and sales and operations planning. Just like you had to make phone calls to multiple places to pick an airline and compare costs and times, those supply chain modules only solved a single problem at a time. They solved that single problem well, but over time, the travel industry, like the supply chain industry, has become more complex. Now travel suppliers are leveraging new platforms to build applications to help reduce costs and improve customer service for both the company and the customers. It is a win-win for all involved as they migrated to this new technology that operates as a single solution.


Imagine what would happen if your demand planning, supply planning, capacity planning, and executive team were able to collaborate on a single solution in a similar manner as you leverage your smart phone for your travel. The supply chain industry has traditionally lagged behind travel in this respect, but advancing technology has finally allowed an opportunity to catch up. Eliminating a module approach to supply chain management entails using a single platform to connect your data, processes and people. It means fostering more collaborative communication, and providing a centralized and harmonized data hub to allow rapid scenario simulation in seconds. Just think about how much more effectively you’d be able to manage all those unexpected occurrences with a single solution that offered that type of functionality? You would be able to eliminate modules, de-segregate the supply chain, and improve your ability to execute change efficiency.


And for all of those wondering what happened to my travel dilemma, it was a success as far as I was concerned. Within my eight minutes on my phone evaluating alternatives, I found an alternative flight from XNA to DCA that connected through Houston. I was able to execute my plan within a few minutes on the phone with the airline’s customer care, have my boarding passes updated directly on my iPhone and made it back home only 30 minutes after I had planned, at no additional cost!  All this helped me get a good night’s rest for my important customer meeting the next morning.


How do you cope with unexpected occurrences in your supply chain?  Comment back and let us know!

The post De-segregating the supply chain: Lessons learned in the air appeared first on The 21st Century Supply Chain.




Originally posted by Tom Gregorchik at


Full Speed Ahead to Failure

Posted by Kinaxis Jun 27, 2016
by Alexa Cheater

Supply Chain SpeedVelocity. Speed. Quickness. In speaking with customers, I’ve heard a lot about how critical speed is in maximizing efficiency, agility, and profitability. I’ve heard how having the ability to know sooner and act faster in relation to opportunities and risks can make life a whole lot easier when it comes to supply chain management. And it’s abundantly clear that it does. All of the articles I’ve read and the examples I’ve come across have been focused on using speed to propel you toward success. But what about using it to take you full steam ahead toward failure?


To me it first seemed like a bit of a backward concept—until I learned to look at failure as just another form of victory in disguise. I went from asking myself why anyone would want to fail, to actually looking forward to my next mistake! And much to my surprise, what helped me come to this realization was hearing several prominent figures speaking about the failures they’ve experienced in their businesses and with their supply chains at the Gartner Supply Chain Executive Conference.


Chris Tyas, Senior Vice President Global Head of Supply Chain from Nestle, gave a keynote on Supply Chain Innovation & Excellence: Engaging 36,000 Supply Chain Brains Across the World. While the focus was much more on crowdsourcing knowledge and ideas from within your own employee base, he did provide an example of supply chain failure. He mentioned the horse meat scandal from a few years ago, where several big businesses were found to have contaminated food products. Nestle originally came out saying there was no way they were involved—based on the fact their top tier suppliers weren’t implicated. Three days later, they had to retract that statement. A supplier much further along the chain, one they had no knowledge of, was using horsemeat in producing one of Nestle’s products.


What Tyas learned from that mistake was the importance of end-to-end visibility. What I learned was the importance of discovering your mistakes quickly—and then taking ownership of them. As soon as Nestle uncovered the problem, they took immediate action to correct the issue, from a public relations standpoint and from the supply chain side. It motivated them to be more aware of what was happening across their entire supply network, and more open and transparent with their customers.


Former CEO of Walmart Mike Duke explained in his keynote, From Supply Chain Executive to CEO: Leading the Largest Business in the World, the importance of celebrating mistakes, of building a company culture of risk takers who are willing to experiment, and of acting quickly when you realize those experiments aren’t working out. You have to fail quickly. And you have to fail with purpose.


The example he gave was Walmart’s failed expansion into Germany. Duke said if he had to do it all over again, he would have pulled out of that market much sooner. Why? Because they knew it wasn’t working, they were hemorrhaging money, but decided to stick it out just a little longer anyways. He said he should have recognized the failure sooner and moved on.


But Duke also shared a story of where failure led to incredible success. Before the rise of the Walmart Supercenter, they tried a different format, one based on the Mega Marts popular in Europe. They built several of these behemoths in the US with the intent of getting into the food business. Competitors said it couldn’t be done. Critics said they were crazy for even trying. The stores were a flop—and a very expensive one at that.


Determined to try again, Walmart went back to the drawing board, and out of that initial failed experiment came the birth of the Supercenter, a model that has proven infinitely more successful and has allowed them to achieve their goal of entering the food industry. Duke noted they failed quickly, recognized that failure, learned from it, and moved forward in a modified direction. That is the key to failing successfully.


When it comes to your business and your supply chain, it’s okay to take risks. It’s okay to experiment. That’s often what leads to the greatest breakthroughs. But you have to be setup for it. You have to design for failure. What I mean by that is you have to have a supply chain capable of recognizing those failures faster. You need to be agile enough to test, fail, and repeat. And that goes back to being able to know sooner and respond faster.


The one other critical piece to failing with purpose, of risk taking in your supply chain, is not being afraid of the failure. Duke summed it up brilliantly in his presentation. The potential size and cost of a failed experiment can’t prevent you from trying it. Yes, in big business mistakes can be costly—Walmart learned that several times the hard way—but you have to look beyond. You have to look at the size of the success that could come from that one risk. Both Walmart and Nestle did, and when they moved full speed ahead toward failure, they realized incredible success.


The post Full Speed Ahead to Failure appeared first on The 21st Century Supply Chain.




Originally posted by Alexa Cheater at

by Steven J. Puricelli

S&OPA few weeks ago, I launched a new blog series on sales and operations planning (S&OP). In that introductory post, I outlined a number of important topics that I plan to explore in more detail throughout the summer. To make sure everyone is on the same page, I want to review the basics, the foundation, which is… what exactly is S&OP?  I’ve seen and heard so many different answers and perspectives in response to this question. Therefore, I think it is important to share what I feel are some leading practices and also how leading organizations think about S&OP.


First of all, S&OP is indeed a process by most academic definitions (Merriam-Webster Link), as it follows a series of steps and activities with a particular cycle or cadence. And there are certainly meetings that occur throughout the process, but S&OP is not a meeting. S&OP is so much more than a process or a meeting. Yes, I’ve seen organizations that think they are ‘doing S&OP’ because they have a monthly meeting, but in fact they are actually missing the point of S&OP.


If one thinks about the purpose of S&OP, it is to ultimately match supply and demand, while balancing the cost (supply) and service (demand) tradeoffs of the supply chain. But as most of us know, addressing or solving this tradeoff is not linear in any way. Organizations face a recurring flow of supply chain imbalances that require decisions. S&OP serves to guide that decision making across the organization, making sure everyone is well informed and that trade-offs are analyzed and addressed properly. As a result, S&OP can be thought of more as an operating model to help organizations make better business decisions.


Based on what I have observed at leading organizations, and also as a practitioner and former planner myself, S&OP is much more akin to an operating model or governance model for the supply chain than it is a process. A colleague of mine at Accenture years ago shared a very simple and crisp definition of an operating model, which I have always liked: ‘it’s the way work gets done in an organization’. My intent here is not to engage in a debate over fancy buzzwords or nomenclature, after all, every supply chain organization I’ve seen refers to S&OP as a process. However, what’s important to take away is that S&OP can be bigger and more powerful, and that requires a mind-shift to think about it as more than a process.


A number of misconceptions exist about S&OP and its role in managing the supply chain. Here is a simple comparison spectrum that I often use to clarify what S&OP entails.


S&OP is not…S&OP is…
Monthly MeetingGovernance or Operating Model
Historical Performance ReviewForward Looking Plan
Forecasting ProcessDecision Making Process
Only Volume or Unit FocusedBoth Volume and Dollar Focused
For Operations or Supply ChainFor the Entire Business
Metrics and Dashboard ReviewsDriver of Actionable Insights



It’s important to think about S&OP more strategically as an operating model than as a process and this is the first step towards getting the most out of the ‘process’.  In order to better understand how this mind-set is put into practice, I want to share a couple examples illustrating how leading organizations use S&OP to manage their business.


  • Backbone of the Organization – One of the best S&OP processes I’ve ever seen was at a global high-tech consumer products organization. What’s interesting is that they didn’t call it S&OP or even have a term for the process.  In fact, there wasn’t really a discrete process, it was simply the way the entire organization operated. Every department from sales, marketing, engineering, finance, and of course, supply chain followed a well-orchestrated, and integrated cadence every month. All the various sub-processes in the departments noted above connected and hinged around this underlying backbone in the organization.
    The inertia of the organization, at all levels, revolved around supporting the cadence of this process, it was simply how they ran the business. There was a calendar with thoughtfully sequenced meetings; there was a well-defined core team and an extended team; the workforce had defined activities and came prepared to meetings; review meetings were well attended and they had a purpose with defined outcomes; and finally, the organization analyzed business trade-offs and made decisions. It was controlled and disciplined. It operated like a well-oiled machine. And, it was incredibly impressive to see in action.
  • Financial Management Lever – A very powerful aspect of S&OP, when applied and used properly, is its ability to steer the performance of a business. One organization that did this well was a global consumer electronics company that operated across many competitive marketplaces and faced fluctuating currencies and foreign exchange rates. Operationally, planning the supply chain was fairly straightforward, but financially it was incredibly complex. As a result, this organization’s process not only looked at volume, but also dollars, which is something I often see in leading organizations. In addition to the standard reports that normally support the process, the S&OP team also had a financial income statement — just like the normal S&OP templates, but instead of units, there were dollars.
    Revenue and margin were the two primary measures, with product mix, manufacturing locations, and currency rates as an overlay.  What-if scenarios were performed to model different financial outcomes as the organization evaluated decisions and their impact on revenue and margin. The S&OP team would adjust manufacturing locations and allocate inventory to different regions and markets globally based on the financial performance objectives…either to drive more revenue, or to drive more margin. The S&OP process in this organization had a greater purpose than to simply balance supply and demand. It also supported operational hedging strategies via the supply chain and was used to drive the best financial outcomes.

I trust this post provided a different perspective – that S&OP is much less about process mechanics and more about the mind-set in an organization. I look forward to reading your comments on this topic and to see what other perspectives people have on S&OP and its definition. In my next post, I’ll explore the areas of ownership and some of the organizational implications of S&OP.


The post What is S&OP? By Accenture Strategy Guest Blogger appeared first on The 21st Century Supply Chain.




Originally posted by Steven J. Puricelli at

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