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2017
by Melissa Clow

Recently, Madhav Durbha, Vice President of Industry Strategy at Kinaxis was interviewed by SupplyChainBrain on supply chain planning in the digital age.

 

I wanted to share their fascinating conversation with our readers – check out the video interview and transcript below:

 

Supply chain planning in the digital age

Madhav Drubha, Supply Chain Planning, SupplyChainBrain

 

SupplyChainBrain: What are you hearing from your customers about the biggest challenges they are facing right now in supply chain planning?

 

It’s fairly simple. It’s complexity and volatility are the two themes that I constantly hear from our customers, regardless of the industry, that seems to be the recurring theme.

SupplyChainBrain: And talk about what you mean by that, complexity of what exactly? How are supply chains becoming more complex?

 

Think of yourself as a consumer. There is omni-channel you can buy products anywhere, you can order stuff from your mobile phone and then get delivered to your home, and so on. So as a consumer, you have a lot more channels through which you can engage with the manufacturers. Think about personalization of products. You know, “I want something now, and I want it to suit to my taste.” That’s causing a lot of SKU proliferation amongst the manufacturers and suppliers of these products. Geopolitical factors….. all we need to do is watch the news in terms of all the action that’s happening around the world, that’s introducing more complexity as well. And then, individual targeted promotions. So all these factors put together, they’re increasing the complexity and volatility in terms of supply chains and it’s making planning more challenging than ever.

SupplyChainBrain: Omni-channel, especially, you referenced that. What are some of the trends there in omni-channel that you see going on with regard to what customers are getting or are demanding today?

 

It’s like I said, it’s personalization is one. If I want to order a shirt and it’s not just my size, it’s my name on the shirt, maybe. It’s the ability for me to order the product online and then I can go pick up in store, I can go have it delivered to my home, or elsewhere. When you look at this, earlier it used to be that I walk into a store that’s the source of the demand, that’s where I’m placing the demand, and I’m picking up the product, as well, it’s very linear, right? In today’s world, with buy anywhere, pick up anywhere kind of paradigm, supply chains are a lot more complex.

SupplyChainBrain: You know, it seems like in the past, the biggest dream of supply chain planners was they wanted more information. Now they have the information, but are they making the best use of it? Are they inundated, are they flooded by it, or can they actually turn it into something actionable to create more accurate plans in the supply chain?

 

They are absolutely flooded with lot of information. The data sources and the types of data are exploding, if you look at it. What’s limiting them, from a supply chain planning perspective, is that the technologies and the paradigms under which most of the companies are working today, these paradigms have been around for 20 years. These are typically batch-oriented, you do a demand plan, and then you push it over to supply plan. Then you do capacity planning, so on and so forth. In such a very linear cadence-oriented processes, where there are multiple handoffs, there’s typically a lot of silos in that and a lot of latency in that. But the need of the hour really is the, like I said, the ability to know sooner and act faster, and they’re not able to do that. It’s like engaging in modern warfare, using swords and horses.

SupplyChainBrain: Well, one other one of the big challenges is SKU proliferation. There’s simply more SKUs out there because, as you say, the personalization and the like. Are companies handling that well? How can they decide what SKUs to order, where to stock them, where to ship them? It seems like a tremendous challenge.

 

It is a tremendous challenge if you look at beyond the consumer interactions with the retail channels and so on. If you look back into the supply chain, the number of sourcing options are increasing, outsourcing of manufacturing is on the rise. So we do think some best in class companies handling that fairly well, that kind of complexity. And the way they are doing it is really being able to bring together the data processing people together and connect them all.

SupplyChainBrain: Well, now, let’s throw in geopolitical and regulatory issues. Talk about those complications and how they’re affecting supply chain planning today.

 

Sure, we look at all the talk around the trade agreements between different countries and how that is changing. That is definitely going to impact the flows of the supply of material across the borders. That is one, for sure. You look at some of the terrorist activities and other unpleasant activities that are going on around the world, those could cause disruptions to the flow of materials as well, right? So all these factors need to be considered. And, as information is evolving, changing in real-time, organizations need to have the ability to consume that and being able to respond to that.

SupplyChainBrain: You talk about knowing sooner and acting faster, which is a great way of putting it in a very succinct manner, what companies need to be doing. And, yet, as we have discussed here today, they’re not all managing to do that, so, we’ve talked about some of those barriers. Could you kind of sum up for me what are the reasons why the companies are unable to achieve that goal, at least at this point in time?

 

Like I said, they’re working under the 20-year old paradigms and the technologies of the past, so what that is doing is they need the ability to respond in real-time, but these systems are inherently batch-oriented. You need to run a plan overnight to come back with an answer tomorrow. We live in the world of Uber. When I punch …ask for a ride, 5 minutes later the car shows up. That’s the world we live in today, and it’s exactly the same paradigm that is needed for planning, as well. They’re not able to do that, the planners are exporting the plans from these batch engines into Excel spreadsheets and trying to do as much as they can within these Excel spreadsheets, and that is causing lot of Excel proliferation within organizations as well. And inconsistencies and scope of increased manual errors, that’s part of the challenge.

 

SupplyChainBrain: Things are happening so fast, you have to wonder whether companies should deemphasize the whole idea of planning and instead switch into an agility mode whereby they’re simply responding to current demand. Is that possible to do?

 

Well, theoretically, it sounds like an interesting idea, but the reality is that there are long lead times that companies need to plan for, you know. When they need a product, they get a demand signal, it’s not that immediately they’re in a position to make it and then distribute it and ship it to the point of consumption. So, planning is extremely relevant, in fact, more so in today’s world, as supply chains become more complex and network like, as opposed to simple linear flow of materials.

 

SupplyChainBrain: I’m sure that supply chain planners will be happy to know that they’re still gonna be needed in the future. So based on this state of affairs that you’ve sketched out for us, what’s the fix? Based on your experience and your knowledge of this business, what should companies be doing in order to achieve these goals?

 

So it used to be that companies are still, like I said, the current paradigm is do manufacturing planning, distribution planning, demand planning, etc. But in some of the leading companies, there is an emerging practice called, “Conquer and Planning,” that we’re seeing more and more in practice. So looking at your supply chain end-to-end network, right? Having visibility to your end-to-end network in one place, being able to visualize how your supply chain is performing with all its metrics and KPIs at any point in time, and then being able to layer an intelligence on top of any disruptive events, you know. Or events that are pleasant or unpleasant, for that matter, being able to intelligently respond to those.

 

And the last, but not the least, there is the human element to supply chain planning, right? We are not in a world where supply chain planning is totally touchless, and it’s happening in a touch-free environment. The human planners and the human intelligence is very much needed. And for that, these companies are enabling collaborative capabilities. There’s social media-like collaboration where you’re sharing context, specific information with your colleagues and co-workers, and you’re cooperating that supply chain.

 

SupplyChainBrain: On top of which you’re able to construct the so-called, what if scenarios, you can work out a lot of possibilities before you commit to one, thereby choosing the best course of action.

 

You’re absolutely right. These companies are able to run these what if scenarios in real-time, be able to compare them, and score them, and pick the best possible scenarios to execute against.

SupplyChainBrain: It sounds like there’s some hope for some improvement we are already starting to see in terms of supply chain planning in the digital age. So, Madhav, I want to thank you so much for guiding us through this world a little, telling us how the state of affairs now and how things might shape up in future. Thank you very much for talking to us.

 

Thank you. Glad to be here.

 

The post Supply chain planning in the digital age appeared first on The 21st Century Supply Chain.

 

The rise of the digital supply network

 

Originally posted by Melissa Clow at http://blog.kinaxis.com/2017/06/supply-chain-planning-in-the-digital-age/

by Alexa Cheater

Supply chain leadership - footballPro Football Hall of Famer Troy Aikman, who led the Dallas Cowboys to three Super Bowl victories in four years in the early ‘90s, may not be the first person you think of when it comes to giving great supply chain advice. One thing the legendary pro athlete does know is leadership. You can’t be a great quarterback without it and that was the topic of his keynote presentation at the recent Gartner Supply Chain Executive Conference.

 

The wisdom he shared, while not directly related to supply chain leadership, is certainly applicable to that space.

 

Lead from a basis of who you are

There are tons of great leaders out there, and while some have common characteristics, Aikman says ultimately, being a good leader means being true to who you are. He cautions that if your personality naturally tends to swing one way or the other between soft and caring, and tough and demanding, you’re going to need to find a way to strike a better balance. You can’t coach everyone the same way. Learn what works with your team members and be a better leader by motivating them in the way that works best for them.

 

This lesson comes down to gaining a better understanding of how you and your team members work individually, and as a whole. When it comes to your supply chain, understanding cross-functional dynamics, much like the dynamics between the different positions of a football team, becomes critical in overcoming the all too common issue of silos. If you properly manage the team dynamic, you’ll have a team that’s more collaborative, and ultimately a supply chain that’s better equipped to make better, faster decisions.

 

Coach for what you want your team to be, not what they are

Aikman shared a story about a player who wasn’t always the superstar on the field. He knew his job, and tried hard, but just didn’t seem to have the talent of some of the other players. Aikman then explained that this player was transformed by a few inspirational words by the coach—who told him he was the best player he had coached in that position in a very long time. The next time that player started, it was as if he was a completely different athlete. Aikman says the lesson here is that you have to coach your team for what you want them to be—whether that’s an amazing running back or a demand planner who’s taking the time to look at the end-to-end supply chain instead of just node-to-node.

 

Recognizing that your players may not be where you want them to be now, but seeing their potential for the future is critical to the success of your supply chain. As a strong supply chain leader, you’ll be able to guide them into the roles you want them to play—a vital skill, especially during times of change.

 

Don’t discount the importance of locker room skills

Aikman also places a heavy importance on good locker room skills. In a football context, he warns upper management is sometimes too quick to cut players who may not be at the top of the roster in terms of on-field skills. Taking a strict “money ball” approach and not taking the time to see the impact those players have on the rest of the team in terms of morale and motivation, may end up being a big mistake. Certain people emerge as leaders off the field, and the same is true of your supply chain team.

 

If someone on your team isn’t your superstar player (but can still get the job done satisfactory), but helps the rest of the group function better as a whole, it could be worthwhile keeping them on board. There’s something to be said for having soft skills, like conflict resolution and compromise negotiation, especially in supply chain where tradeoff decisions happen daily. Some people just naturally bring out the best in those around them.

 

Be confident in your processes and your people

Stick to your call if you’ve made a decision based on what you believe is the right play to run—even if others are skeptical. Provided you’ve done your due diligence and thoroughly evaluated your course of action, you have to be confident enough to move forward with it. Listen to what others have to say, but if you’re still convinced you’re on track, don’t back down. If you’ve done your job right as a leader, your team will follow you onto the field even against the toughest opponents and give you their all because they believe in you.

 

That confidence is a requirement in supply chain where innovation and change aren’t always easily accepted. You may face pressure from above and below, but remember that without risk there’s no reward.

 

Across all of the lessons Aikman shared, one message always came out on top. It takes more than a quarterback to win the game. Every person on the team has an important role to play, but to truly achieve success, in football or in supply chain leadership, you must surround yourself with good people, make good decisions for the right reasons, work hard and all focus on achieving the same result. Valuable lessons, even if you’re not a Dallas Cowboys fan.

 

The post Supply chain leadership lessons from Dallas Cowboys legend Troy Aikman appeared first on The 21st Century Supply Chain.

 

The rise of the digital supply network

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2017/06/supply-chain-leadership-lessons-dallas-cowboys-legend-troy-aikman/

by Dr. Madhav Durbha

2017 Supply Chain & Logistics EMEA summit & expoAs supply chain professionals, we can grow insular in our thinking, as on a day-to-day basis we risk confining ourselves narrowly to our domain of responsibility or solving challenges specific to our regions. However, from time to time, it is important to find opportunities to network with our peers from different regions or from different functional domains and learn from each other. The 2017 Supply Chain & Logistics EMEA summit & expo was one such opportunity. About three hundred supply chain professionals from various pockets of the world representing manufacturers, retailers, logistics providers, and technology vendors took part in the summit. It was a 3 day event with some very provocative content while providing sufficient opportunities for networking and peer-to-peer learning. Here are the key takeaways for me from the event.

 

1. Innovation in the warehouse: Markus Kückelhaus of DHL trend research, in two separate panels gave very compelling presentations on the innovation DHL is driving in the warehouse. One of them is Augmented Reality (AR). Through the pilots that DHL conducted, AR is showing tremendous productivity gains in the warehouse such as a 25% gain in picking productivity. Through the use of wearables, employees are able to navigate, scan, pick, and put away product. These wearables are eliminating the need for the associates to carry scanners, freeing up both hands to be more productive. There was also some discussion around AR vs VR (Virtual Reality). While VR has some potential in terms of testing out layouts and such, Markus observed that for the most part the potential for VR seems to be fairly minimal in the warehouses as compared to AR.

 

In a separate session Markus talked about pilots they are conducting with the Logistics robots. One observation he made was about how different logistics robots need to be compared to manufacturing robots. Manufacturing robots tend to be stationary, focusing on repetitive tasks while logistics robots within a warehouse setting need to be more adaptive and humanlike as they need to move around the warehouse, picking, putting away, and cleaning. To perform such versatile tasks, the robots need to be able to see (through computer vision), have brains (through artificial intelligence) and be willing to be trained (machine learning). Markus said these robots also have an interface to humans, i.e., the face of the robot on which something as simple as a green light to show that the robot understood the instructions, to something more complex, such as a facial expression. Markus mentioned that given the shift to picking of eaches due to omnichannel, logistics robots have challenges picking packages of certain shapes and sizes. But I left with the feeling that in light of the accelerating innovations, this is something that will be addressed in the near future.

 

2. Digital disruption upending the seaports: In quite a fascinating panel discussion with Jordi Torrent of the port of Barcelona and Matthijs van Doorn of the port of Rotterdam, they talked about how the seaport business is turning quite volatile. 3D printing is shifting manufacturing closer to the point of consumption. This will cut down the need to move components and/or finished product around the world. Jodi quoted a pwc study suggesting that 3D printing will result in 41% reduction in air traffic and 37% reduction in sea traffic. One advantage with 3D printing is that there will be more commodities and raw materials being shipped to the points of consumption and these commodities and raw materials cube better than finished products because of their shape. The discussion also included other trends contributing to increased volatility, such as the direct rail transportation from China to deep into Europe, and potential opening of the Arctic shipping way with the melting of polar ice.

 

3. Macroeconomic factors driving supply chain volatility: In a panel discussion on the topic of macroeconomic factors, Peter Roerig of Royal FrieslandCampina talked about the trends/events impacting the dairy supply chain, though these have broader implications to other industries as well. Some of the examples he cited include Russian dairy import ban, Ebola travel ban, Arab spring, oil crisis (lack of foreign currency for oil dependent nations when the price of oil fell), inflation in certain countries such as Mexico and Brazil stripping consumer buying power, Haiti earthquake, terrorism, US elections and increase of protectionism, Brexit etc. All in all Peter’s message was to “expect the unexpected, and be prepared”. An audience member made a very apt observation that why all the macro factors were to do with negative events. It made me pause and reflect. Yes. Positive events can cause supply chain disruptions as well. For example a new large order or a new product or promotional offer performing exceedingly well can be quite disruptive to the supply flow. However, I suppose fear can be a great motivator and hence often times we fall back on negative examples to highlight disruption. I am no exception to this!

 

4. The future of jobs in light of increasing automation: There was plenty of discussion around the future of work and human jobs in light of machine intelligence and automation. One of the attendees told me that they are having trouble finding enough qualified workers in the warehouse due to the rise in omnichannel activity. He viewed automation as a blessing to counter this capacity crunch. However, in general, there was consensus amongst the attendees that as the machines get smarter, humans will need to consciously consider investing in retraining and retooling their skills. In my view, the governments and private sector will need to take some ownership in providing avenues for motivated individuals to retool their skills. There was also some discussion on skills shortage isolated to certain markets, which automation can alleviate. One attendee mentioned that since announcing Brexit, the migrant workforce from eastern Europe to UK dropped by 90%. Quite a challenge indeed!

 

5. Supply chain agility or Supply chain nervousness?: Christoph Glatzel of McKinsey made a very compelling presentation on how planning needs to be touchless and real time in light of the digital disruption. On a related note, in a very energetic panel discussion that I took part in along with Zoltan Pekar of Roland DG, Michael Ginap of APICS Supply Chain Council, and Patrick van Gent of AIMMS, Michael made a very provocative comment that all the talk around “supply chain agility” is turning a bit hysterical. An apt comment! It is easy to get caught up in all the hype and talk about agility and digitalization, and introduce “nervousness” in the name of “responsiveness”. Practices such as supply chain segmentation, inventory target setting, and smoothing of production and distribution schedules and bringing consistency and repeatability into them, are all ways to build shock absorbers into the supply chain systems. Speed of responsiveness driven by real time planning is not about having knee-jerk reactions. It is about having the latest information at the finger tips to decide on whether to act and how to act.

 

2017 Supply Chain & Logistics EMEA summit & expo6. A time to reflect on how far we came: In an evening boat cruise hosted by the Port of Barcelona for the attendees, I couldn’t help but notice the thousands of containers sitting on the port. The shipping container is perhaps one of the most impactful supply chain innovations that stood the test of times. It has truly made supply chains global by providing an efficient and cost effective means of transporting massive amounts of materials and products around the world. With all the talk around drones, AI, 3D printing etc, it is often easy to forget such innovations that may look mundane. This mini excursion gave me an opportunity to reflect on such innovations.

 

All in all it was quite an exciting and engaging event. The camaraderie and the conversation among the attendees served as yet another reminder that regardless of whether one is a practitioner, technology provider, consultant, or an analyst, we are all members of the close-knit supply chain family, with the purpose of making a difference in the world!

 

The post Agility and flexibility in the age of digital supply chains – Insights from the 2017 Supply Chain & Logistics EMEA summit & expo appeared first on The 21st Century Supply Chain.

 

The rise of the digital supply network

 

Originally posted by Dr. Madhav Durbha at http://blog.kinaxis.com/2017/06/agility-and-flexibility-in-the-age-of-digital-supply-chains-insights-from-the-2017-supply-chain-logistics-emea-summit-expo/

by Carmen Humplik

Freight transportationEvery year, the city of Ottawa hosts an event called Doors Open Ottawa. Approximately 150 historically, culturally, and functionally significant buildings open their doors to the public. If you’re a resident of the city, it’s a great way to explore your own backyard as it allows you to gain access to buildings that are normally closed to the public.

 

This year, my family and I decided to take advantage of the event and visit National Research Council (NRC), Canada’s 9 m wind tunnel testing facility. This is the third largest wind tunnel testing facility in the world. Their testing spans across many industries including aerospace, automotive, surface transportation, construction, energy, and sports.

 

Our tour guide, one of the researchers at the facility, was speaking about both their past and current projects. I found it interesting to discover that one of their current projects has direct impact on supply chains; more specifically, on freight transportation. They are currently testing the aerodynamics of trucks driving in a peloton formation, which is also known as platooning.

 

Platooning is a technique that is similar to those employed in cycling road races where cyclists ride in close formation to help them conserve energy and reduce drag. When you reduce the distance between trucks (somewhere around 5 to 10 meters), you can also reduce drag, and, as a result, save on fuel and lower C02 emissions. Advocates for truck platooning also claim that it could have the added benefit of improving highway safety because it better controls speed and could help reduce chain collisions.

 

In an article published by the MIT Technology Review on self-driving trucks, “fuel costs account for one third of the cost of operating a long-haul truck.” Studies suggest that platooning could help drive down these operating costs. In the U.S. alone, the American Trucking Associations (ATA) reported that trucks carried 10.49 tons of freight in 2015, accounting for 70.1% of domestic freight tonnage. Therefore, with trucks playing such a dominant role in the freight transportation landscape, reducing fuel consumption could also reduce the carbon footprint of the trucking industry as a whole. However, investments must be made in upgrading truck fleets to enable platooning.

 

Driving safely in a platoon formation leaves little braking distance between trucks and requires a high level of vehicle-to-vehicle communication and automation to be safely executed. Trucks need to be semi-autonomous, but not necessarily fully-autonomous, to drive in a platoon formation. They must, however, be electronically linked so that their acceleration and braking is highly synchronized. Think of it as extreme adaptive cruise control.

 

Various companies such as Scania, Volvo, and Volkswagen have pilot projects underway testing platooning solutions. One Silicon Valley company, Peloton Technology, is also rolling out a truck platooning solution in 2017. Currently, their technology supports a two-truck platoon which still requires drivers to operate the trucks. They claim that their solution enables a combined fuel reduction of 7 percent. The truck at the back of the platoon would see a reduction of 10 percent and the truck at the front would see a reduction of 4.5 percent. According to a report released by Transport Canada, some studies have shown fuel savings as high as 21 percent.

 

Research suggests that truck platooning technology holds much promise for the trucking industry and, ultimately, for supply chains. Investments are currently being made in platooning technologies and lawmakers worldwide are busy trying to legislate them as platooning will have huge impacts on our roads. By all accounts, you may soon be passing a truck platoon on a highway near you.

 

The post Winds of change in freight transportation supply chain: Platooning technology appeared first on The 21st Century Supply Chain.

 

The rise of the digital supply network

 

Originally posted by Carmen Humplik at http://blog.kinaxis.com/2017/06/winds-change-freight-transportation-supply-chain-platooning-technology/

by Melissa Clow

Santen Pharmaceuticals Santen Pharmaceuticals has begun a significant transformation of its global supply chain environment. Santen is headquartered in Osaka, Japan and the company sells ophthalmic pharmaceutical products in approximately 60 countries. The company was looking for a single end-to-end planning platform that would reduce global planning cycle times and raise efficiency.

 

I’m thrilled to share that Santen Pharmaceuticals has selected Kinaxis RapidResponse for supply chain planning. Following a thorough evaluation, Santen selected Kinaxis RapidResponse because of its concurrent planning capabilities. With the deployment of RapidResponse, Santen will reduce global planning times, manual activity and eliminate the use of multiple disconnected spreadsheets. Having a consolidated view of the entire supply chain, Santen will plan for its expected performance, monitor its progress, and respond to variations to the plan as reality hits.

 

Here’s a quote from Frank Binder, VP, Global Supply Chain Management at Santen:

 

“We chose Kinaxis to develop a consolidated view of our entire supply chain to collapse decision cycle times by connecting all links in our supply chain,” said Frank Binder, PhD, Vice President, Head of Global Supply Chain Management, of Santen Pharmaceutical. “Through RapidResponse, we will remove supply chain planning functional boundaries and gain the critical capabilities to drive tangible business outcomes. We look forward to growing our partnership.”

 

Read more here >>

 

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The rise of the digital supply network

 

Originally posted by Melissa Clow at http://blog.kinaxis.com/2017/06/kinaxis-rapidresponse-selected-santen-supply-chain-planning/

by Alexa Cheater

ChangeIf there’s one thing you can count on in supply chain, it’s that things will change. Often. It could be as relatively small as a last minute order or engineering change, or as big as an industry-wide shift that sends your end-to-end supply chain spinning in an entirely new direction. At the recent Gartner Supply Chain Executive Conference, there was a lot of talk about the latter. As it turns out, that future state we’ve all been speaking about for years isn’t as far off as you might think. It’s already here and the impacts on your supply chain are happening right now—whether you’re aware of them or not.

 

Gartner Research Director Tom Enright gave an enlightening presentation on Future Supply Chains for the Digital Era and Beyond, and shared some unstoppable forces in motion right now that will change the very notion of supply chain. If you haven’t already started to embrace and prepare for this new digital future, you may already be too late.

 

1. The customer

Customers have always been at the heart of supply chain. That much isn’t new. What’s changing is how they want to engage and interact with it. As I mentioned in an earlier blog about the Gartner conference, customers are demanding you deliver an experience, not just a product. They want a continuous, seamless experience that blurs the lines across companies, retailers and partners.

 

The notion of online or offline doesn’t exist for them anymore. It’s all about how, when and where they want it—and the answers to those questions may not reflect how your end-to-end supply chain is setup. Order fulfillment channels are becoming more complex as the possible combinations for purchase and returns explode. Buy online, pickup in store, return via postal service. Buy online, ship direct to consumer, return to brick and mortar store. Buy via mobile, ship to a third party location (like work or a hotel). Buy via IoT buttons (like Amazon dash), deliver via drone, return via courier. Can you see where I’m going with this?

 

You have to start thinking of your supply chain as providing a service, and you must develop a digital strategy, not just an ecommerce one, to deliver it.

 

2. Global purchasing power

Twenty years from now, who will you consider an economic superpower? The current categorization of G7 (Canada, France, Germany, Italy, Japan, UK, USA) won’t be applicable. Realistically, it already isn’t. Emerging economies, those classed as part of the E7 (Brazil, China, India, Indonesia, Mexico, Russia, Turkey), are hitting the leaderboard of the top 10 countries with the most purchasing power. China already tops that list. Since 2015, E7 countries have already been marginally ahead of the G7 nations, and Gartner predicts that gap is only going to grow. It expects by 2045, E7 countries will hold a combined $143 billion in purchasing power to the G8’s $58 billion.

 

This shift in purchasing power means you already need to be thinking about where and to whom you’re distributing your products. Your segmentation and network design have to adapt. Now is the time to reach out into the E7 and determine how you can operate there in the future. Does that mean relocating your distribution hubs? Or changing your logistics channels? What happens to the role of your current mid-tier suppliers, who could become superpowers? These represent just a fraction of the questions you need to be asking today—not tomorrow—if you want to get ahead of the shift.

 

3. Digitization

How ready are you for digital business? Gartner’s research suggests many of you are still a long ways off. Its statistics show that while 70% of companies recognize the importance of things like mitigating cyber risk, building knowledge and roadmaps for emerging technologies, and using digital to execute on a more reliable and profitable supply chain, a mere average of only 15% are actually ready to act on them. What’s even more frightening is the fact the research also shows 65% of the millions of smart devices already available on the market will be hackable by 2019. That’s less than two years away.

 

IoT is here, and with connected devices moving into the billions, you can’t afford to ignore it. The big data it’s providing means more insight into consumer demand, but only if you have the analytics and data structure to support it.

 

4. Uberization

With the emergence of rideshare giant Uber comes a new form of gig economy, and it’s expanding well beyond the confines of individual transportation. The so-called uberization of talent will continue to change the way in which we work. Networks of companies, instead of individual corporations, will be the primary hirers, employing more of us as on-demand experts, jumping from project to project. The notion of staying with a company long-term is already fading, and in the very near future could disappear altogether.

 

The explosion of this sharing economy is also creating the uberization of logistics networks. Last mile delivery will be farmed out to local entities, many of whom will use their own cars, trucks and bikes to do it. It’s already happening, but it’s on the verge of breaking out on a much larger scale. It will extend beyond last mile delivery to companies looking to share resources to eliminate capacity constraints and cut costs on a global scale.

 

While these four forces are already in motion and affecting your supply chains, the good news is Enright has some ideas on ways you can adapt now to prevent that impact from becoming a negative one. He suggests looking at your capabilities in the following areas:

 

Talent resources

With a staggering number of baby boomers retiring every day, the total global workforce is shrinking—particularly in some of those G8 countries. Not only will you have fewer workers to choose from, but many will come into your employment less educated and less technically skilled since they won’t have decades of experience under their belt. They’ll need strong leadership and guidance, so you need to start identifying your future management now, then nurture and develop them. It could also be time to re-examine where you’re hiring to avoid falling further down the hole of today’s already existing talent gap.

 

The bright side is that while human employees are decreasing, robotic ones are on the rise. That means looking for future talent who can teach and train these robots, and ones who are willing to work alongside them, or perhaps even under them.

 

Corporate social responsibility

Social transparency is already driving purchasing decisions by your customers. If you don’t have a corporate social responsibility (CSR) strategy, you’re already behind and potentially losing revenue. Gartner says an estimated 30% of consumers weigh CSR as highly as price when determining which company to buy from.

 

Pretty soon that’s going to extend to how socially responsible your company is, if you’re working with suppliers and partners who also have that same level of commitment to bettering the lives of their works, protecting the environment and being good global citizens.

 

Algorithmic business

More ‘things’ are getting connected every day. From smart refrigerators to toothbrushes to engines. As mentioned earlier, humans and smart machines are already starting to co-exist. With the rise of artificial intelligence (AI) and machine learning (ML), a blended population isn’t far off. You need to start shifting your thinking from big data to big answers.

 

How are you going to incorporate the rapidly growing number of digitally disruptive technologies into your end-to-end supply chain? What kind of impact will it have on your business from a profitability standpoint? A talent standpoint? A resource standpoint? Don’t put off finding out the answers. Start investigating them today.

 

Economies of connections

Looking ahead, one of the key ways to adapt to these forces putting pressure on your supply chain is to increase value through network relationships. We’ve already seen evidence of how successful this type of mindset can be when companies, oftentimes competitors, find ways of working together to find cost savings on both sides. Like when they use the same local delivery truck to re-stock retailers who sell products from both companies. The result is lower transportation costs since trucks aren’t going out partially filled. As an added bonus, it also helps the environment by reducing the carbon footprint of those items.

 

Setting up these mutually beneficial networks or ecosystems will drive efficiency and profitability within your supply chain. Just be aware that for them to succeed, so must all the partners involved.

 

Trying to stop unmovable forces like customers that are more demanding, a shift in global purchasing power, digitation and uberization is an exercise in futility, but by planning ahead and recognizing the future is now, you can adapt, thrive and profit in this emerging new digital world.

 

The post 4 unstoppable forces that WILL change your end-to-end supply chain appeared first on The 21st Century Supply Chain.

 

The rise of the digital supply network

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2017/06/4-unstoppable-forces-will-change-end-end-supply-chain/

by Dr. Madhav Durbha

Information technology in supply chain managementI recently read this very interesting book, “Be the Business: CIOs in the new era of IT” by Martha Heller. In the book, the author made several very interesting observations about how the role of a Chief Information Officer is changing in the age of cloud computing, personalization of tech, and the rise of shadow IT. As I was reading the book, I couldn’t help but reflect on my own experience of working with IT organizations over the last two decades I have been in the supply chain business. Let us examine the shifts that happened. I will lean on the Supply Chain Planning space as an example and relate to the broader shifts in the role of IT in supply chain management.

 

1. The disillusionment with the establishment: In the late 90’s, i2 Technologies (the company where I started my career) was blazing a new trail in supply chain planning technology as most companies know it today. Manugistics was a strong contender to i2. However, the market was small enough that it was largely ignored by the big ERP vendors for a while. With the promise of these newer and exciting technologies at the time, IT organizations opted for a “best-of-breed” strategy bringing together the best of the ERP platforms and the specialty supply chain vendor capabilities.

 

As the market valuation of these supply chain planning pioneers skyrocketed, the inevitable happened. The giants awoke. With a combination of in-house development and acquisitions, the big ERP vendors followed suit. However, they missed the opportunity to completely change the game, and instead followed the trail set by the pioneers and came up with their own variants of these capabilities. Once they reached a point where the capabilities are “good enough”, the big ERP went to the IT organizations with the “ease of integration” and “one throat to choke” message. The message was very appealing as best of breed technologies brought with them the challenge of integrating disparate technologies and deployment platforms. It was a relatively less risky proposition. Given that these organizations have an existing relation with the ERP vendor in context, layering in advanced planning seemed logical. In other words, no CIO or IT organization as a whole could be blamed for a seemingly safe choice.

 

As organizations moved towards standardization of technology around the big ERP, best of breed vendors felt the squeeze. Consolidation followed and innovation took a back seat. Supply chain planning technology deployments resulted in a certain level of disillusionment. Even as the business complexity and volatility increased manifold, planning paradigms in most organizations are still stuck in the 90’s. While the business is happening in real time, these planning systems run in batch mode, significantly limiting the responsiveness and simulation abilities. The result is that most businesses are left wanting for more. Tired of asking IT for advanced capabilities to help with simulations and such, after spending millions on expensive technologies, planners resort to excel spreadsheets. This point of view was shared by Lora Cecere in her blog Bumps, Cracks, and Opportunities. All in all, this is leading to disillusionment with the establishment vendors of planning solutions.

 

2. The rise of SaaS and Shadow IT: With the rise in bandwidth, computing power, and storage, the last decade witnessed Software-as-a-Service (SaaS) specialty vendors emerge as viable alternatives to the establishment. In pursuit of technology that operates at the speed of business, business started bypassing IT and acquiring needed capabilities through SaaS vendors. This ended up creating “Shadow IT”, rising tensions between business and IT leadership. The self-service capabilities provided by the SaaS vendors put the power in the hands of business. What used to traditionally result in an IT ticket and wait time ended up being a configuration done by a business superuser.

 

Specifically, in the Supply Chain Planning space, this is resulting in a pivot back to the “best of breed” strategy. As bulk of the action in enterprises shifted from within the four walls of the company to outside the company due to increased use of contract manufacturing and third party logistics (3PL), traditional technologies built on ERP foundation came up short. Besides, the new generation of planners growing up in the world of smart devices and apps have very different expectations when it comes to speed of capability enablement. Concurrent Planning focused on real time end-to-end network planning, powered by in-memory architecture, is starting to replace the batch oriented supply chain planning paradigms at large global companies.

 

3. The changing role of IT – the move from enablement to partnership: The smarter CIOs and IT departments see these shifts taking place. They understand the rising risk of a potential IT disintermediation, as the core IT functions such as setting up the stack (hardware, database, middleware, etc), network configuration, and application installation have migrated to the cloud vendor. Yet, they also see the tremendous opportunity to proactively position themselves as the change agents and partners to business, as opposed to mere enablers of capabilities. Instead of the traditional “rip and replace” methods, they are blending together the best of legacy technologies and the emerging technologies to enable faster time to value. As opposed to going with a “one throat to choke” approach, they are spending time in researching the best of breed and open source technologies to offer true systems of differentiation to business.

 

These progressive thinking CIO’s are retooling the skills of the IT organizations by focusing on building techno-business capabilities, staffing up on data science, machine learning skills, and staying abreast of the evolving technologies. They are constantly tuned into the shifting business and technology trends and are focused on bringing capabilities business will benefit from. While traditional metrics such as system up time, response times, and service levels still remain very relevant, the dialog between these progressive IT organizations and the business is starting to focus more on the business metrics such as customer engagement/ loyalty, order fill rates and asset utilization. Large global IT organizations are realizing that “one size fits all” approaches don’t work with regions with varying degrees of maturity. They are opting for technologies that cater to this diversity of maturity amongst the regions they support. They are partnering with and supporting the regions on their maturity progression, as the standard bearers. Business is appreciative of the intelligence these CIO’s and their teams bring to the table. As a lot of physical devices are becoming connected smart devices, these IT organizations are best equipped to advice R&D organizations on the emerging standards with Internet of Things (IoT) and such.

 

While these shifting dynamics in the IT organization’s thinking are happening in select leading organizations with visionary CIO’s, the majority of the IT organizations are still operating in the older paradigms of being “enablers” of business capabilities as opposed to becoming “partners”. The time is now for every IT professional to rethink their role in this rapidly shifting world. Supply chain IT professionals are no exception!

 

The post The changing role of IT organizations in supply chain management appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Dr. Madhav Durbha at http://blog.kinaxis.com/2017/06/changing-role-organizations-supply-chain-management/

by CJ Wehlage

Gartner top 25 supply chainA few years ago, Kevin O’Marah said Gartner’s Top 25 Supply Chains was getting increasingly boring. Apple and P&G were annually #1 and #2. So Gartner looked at the numbers and created the Masters category. The criteria in qualifying for the Masters category is any company who has been in the top five rankings for at least seven out of the past 10 years. This year, Amazon was voted off the regular list, and joins Apple and P&G in this Masters category. In 2019, it’s likely both Unilever and McDonald’s will also be voted off the island and move into the Masters category, as well.

 

Gartner’s Top 25 Supply Chains has become like watching Survivor, the reality TV show that places people on a remote location, where they outwit, outplay and outlast the others. I laugh when they vote out the Navy Seal or the Triathlete. Then, they have no food and lose the following week’s challenge. At tribal council, they wonder why they lost. Easy answer here – vote out the best and the tribe gets weaker. Or, as Nature Boy Ric Flair says, “If you want to be the man, you gotta beat the man.” Something needs to be done differently in the Masters category if Gartner wants to avoid simply having two lists.

 

Once again – Peer vs Gartner

Another change needed is the vast difference between how the 169 peers vs the 38 Gartner analysts rank the companies.

 

         
Gartner Analysts Top 10 – 2017Peers Top 10 – 2017

 Unilever

 

Cisco Systems

 

Intel

 

McDonald’s

 

PepsiCo

 

Nestlé

 

Inditex

 

Schneider Electric

 

Colgate-Palmolive

 

BASF

Unilever

 

Coca Cola Company

 

Wal-Mart Stores

 

Nike

 

McDonald’s

 

Inditex

 

Nestlé

 

Cisco Systems

 

PepsiCo

 

Samsung Electronics

 

 

Intel is ranked third by Gartner, but 11th by peers. Samsung is 10th according to peers, while Gartner places them in spot 25. As I’ve stated in the past, if Gartner was to see Samsung’s supply chain up-close, they would rank them first. HP is 24th according to peers, but 11th according to Gartner. This is a company that has been separated, had negative revenue growth at -5.4% and changed CEOs many times in the past 10 years.

 

I recommend keeping the peer review and Gartner analyst inputs, but dropping their weighting in the overall rankings from 25% to 5% each. Then, create a new panel (15%) made up of key Gartner analysts, peers and consultants that have actually worked in supply chain and have seen and know how the top 50 operate their supply chains.

 

Somehow, normalize the odd numbers

McDonald’s has an inventory turn of 174.5. That’s 11.6 times higher than the second-ranked supply chain, with Samsung at 15.1. Consider that Samsung has consumer electronics, visual display, semiconductor, heavy industry and biotech divisions. We need to figure out how to normalize this oddity that keeps McDonald’s in the top five every year.

 

For Nokia, I struggle to understand how they were ranked. Microsoft acquired them in 2013, the company then laid off 12,500 people in 2014, then acquired Alcatel Lucent only to sell off a business unit to Foxconn. The magic is in the three year revenue growth. Nokia was tops at 46%. However, when you look at the 2015-2016 revenue growth, Nokia’s networking business grew 90%, while their Nokia Technologies only grew 3%. With life sciences, semiconductors and others making acquisitions, we need to figure out how to normalize the revenue growth created more by an acquisition, rather than supply chain prowess.

 

How does legal and public relations play in supply chain?

Lastly, I just don’t see the value of having the corporate social responsibility (CSR) category. In some companies supply chain doesn’t drive or own the CSR report at all. We have enough categories (like return on assets (ROA)) that already make it difficult for some great supply chains to get ranked.

 

In this area, Gartner should push the metrics benchmark. I recommend Gartner have the top 50 supply chains enter their metrics benchmark data and create a category that uses a combination of these best-in-class benchmarks.

 

I do love the concept of elevating the supply chain through a Top 25 ranking. Gartner does a good job at pulling what data is publicly available. I do worry that a few years ago, the boring comments, which caused the Masters creation, will be replaced with a numbers credibility comment. Two groups, Masters and Top 25, is not a good end state. We need to make the push to get core supply chain data and an expert panel to enhance the Top 25 votes.

 

The post The top 25 supply chains and Survivor appeared first on The 21st Century Supply Chain.

 

 

Originally posted by CJ Wehlage at http://blog.kinaxis.com/2017/06/top-25-supply-chains-survivor/

by Melissa Clow

This blog is part of a video interview series. Check out the video below as well as links to other supply chain practitioner and Kinaxis executive interviews.

 

Even though some traditional forms of learning continue, companies are turning more and more to digital technology and learning tools to collect, analyze and share knowledge, says Sarah Sedgman, Kinaxis chief knowledge officer.

 

While familiar forms, such as instructor-led teaching, continue to some degree, industry is shifting to digital knowledge networks because of the flexibility the technology offers. “Among other things, that flexibility means there is instant access to information when people need it,” says Sedgman.

 

Companies that may once have been slow to invest in such technology see now that they become more efficient and make better decisions, Sedgman says. “It’s important for us to invest in these technologies and become more familiar with them, and that’s true all the way up to the executive team, not just those who are actually using these technologies.”

 

Each level of an enterprise should understand how the supply chain is being transformed, what the impact of the Internet of Things is or what machine learning is all about, Sedgman says. “Everybody should understand why it is important to adopt these technologies, and the value they bring. Often, that piece is forgotten, the change management piece.”

 

The irony is that many employees utilize similar technology in their everyday lives through social media. “When we get to our work lives, we seem to forget how to use them. That’s one of the benefits of RapidResponse — with it, we’re introducing the ability for people to collaborate and share knowledge across the supply chain.”

 

That sharing tops the traditional one-way information transfer model because multiple parties can access a knowledge pool simultaneously. That contributes to tearing down silos within companies and building stronger relationships. It also helps eliminate the “I didn’t know” excuse, Sedgman says.

 

“Adaptive collaboration, which we’ve built right into the tool, enables people to talk to one another as things are happening, to tell each other what decisions they are making that may impact the others, and help them understand what’s happening in real time.”

 

Check out the other video interviews in this series:

 

The post [Video] Digital Technology and Strategies for Effective Knowledge Sharing appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Melissa Clow at http://blog.kinaxis.com/2017/06/video-digital-technology-and-strategies-for-effective-knowledge-sharing/

by Ilyas Kucukcay

e-Commerce supply chainOver the last few decades, small and medium size (SME) companies have been leveraging their daily and long-term operations by using more efficient supply chain delivery and optimization techniques. Business-to-business (B2B) and business-to-customer (B2C) companies are also following this trend to step their game up and deliver their goods and services by shorter production and delivery times.

 

Logistics is one of the critical subjects for e-commerce companies. In a sense, logistics refers to the art of managing the flow of materials to deliver the product to the customers. Throughout the process of designing, manufacturing and delivering the product, companies can utilize their logistics activities within –and certainly not limited to- two domains.

 

Physical supply

 

Physical supply refers to the portion of logistics that covers activities to deliver the product-related materials to the suppliers.

 

Physical distribution

 

Physical distribution is the part where the company plans the delivery of the final product to the customers.

 

supply chain distribution

 

Supply chain management has come a long way to overcome a variety of challenges related to logistics. Today’s enterprise management and planning solutions are helping most e-commerce companies to make better decisions, reduce the physical supply and physical distribution costs and improve the overall efficiency of the material flow. Although B2B companies benefit from the sophisticated and automated procedures and estimations more than B2C companies do, there are indeed real-life success stories that can help us to understand the importance of logistics in supply chain management.

 

Home Depot is one of the biggest retailers selling home improvement and construction products and services. With more than 355,000 employees and 2,000 superstores across the US, Canada, Mexico and China, the company is doing pretty well with its efficient supply chain and logistics strategies. The company is also investing heavily in its e-commerce strategies to increase its customer base and become accessible to more customers regardless of their physical location and accessibility to physical stores. Forbes has shared some insights about the company’s e-commerce strategies, which also aligned perfectly with its logistics strategies.

 

One solid example is the way Home Depot operates its inventory and replenishment (I&R) activities for its stores. The company used to have separate logistics management departments in every single physical store to utilize replenishment and store management-related activities. This was costly, as each store had to process the replenishment orders to get the required materials from the suppliers. After realizing that the de-centralization of the logistics management was indeed an issue, Home Depot decided to centralize those individual departments as one in its corporate headquarters.

 

With the help of technology and right software solutions, Home Depot’s new centralized inventory and replenishment (I&R) department created a significant benefit for the company. The overall performance of the department improved the demand forecast accuracy and decreased the cost of operations for the replenishment orders. As a single/centralized department manages the inventory for all stores, the new method increased the bargaining power for the company against the suppliers. As a company, Home Depot was also able to benefit from this change, as it is now able to process online orders more efficiently.

 

Many other e-commerce companies found their own logistics and supply chain management struggles, and were able to overcome those issues by using the right solution. For those companies, different challenges started to get costly depending on various ranges or conditions like the industry, geographical location, corporate culture and structure, and their overall vision about adapting to the changes in demand.

 

By adopting the right solution to manage, plan and deliver, today’s technology can help e-commerce companies improve the overall efficiency and effectiveness of their supply chain-related strategies. These companies need to follow the latest trends in their own supply chain and adopt efficient solutions to survive, compete and improve. There are certainly different variations of solutions out there, and some of them work more efficiently and effectively.

 

Understanding the business problem and analyzing the requirements to overcome that problem is also as important as the adopted solution. Just like Home Depot, many other small, medium and large enterprises are finding their way to optimize their actions and processes with more efficient and effective logistics and supply chain management strategies.

 

As the barriers to entry for startup companies and SMEs go down with the accessibility of e-commerce technologies, more companies are finding ways to survive and improve. Can you name a few more examples of e-commerce companies that have overcome their struggles with efficient logistics and supply chain strategies? Let us know in the comments area.

 

 

 

The post A game changer for today’s e-commerce companies: How efficient supply chain management helped Home Depot evolve appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Ilyas Kucukcay at http://blog.kinaxis.com/2017/06/game-changer-todays-e-commerce-companies-efficient-supply-chain-management-helped-home-depot-evolve/

by Alexa Cheater

profitabilityAs Gartner Research Director Matthew Spooner noted in his recent presentation at the Gartner Supply Chain Executive Conference, advanced sales and operations planning (S&OP) is like a hotel. It’s “somewhere you visit, not somewhere you live.” What exactly does that mean? Essentially that while it can, and in many cases does, drive improvements to your balance sheet, it’s not a blanket, one size fits all process that applies to every aspect of your company’s supply chain.

 

In fact, Spooner says S&OP isn’t a supply chain process at all. It’s a business one. Also often referred to as integrated business planning (IBP), it’s just one way many businesses are evolving to stay competitive in a changing landscape. Uncertainty around high-impact events, expanded global presence, pricing pressures and increasing product mix complexity are just some of the reasons more companies are looking to kick their traditional supply chain practices into high gear.

 

Improving P&L

As outlined in Spooner’s presentation, companies with higher S&OP maturity are clearly seeing a positive improvement when it comes to profit and loss (P&L) statements. According to data from Gartner’s 2013 S&OP Maturity Research Study, higher maturity businesses saw a 5.6% increase in revenue, 7.5% decrease in costs and a 7.2% increase in profitability because of successful advanced S&OP.

 

Some specific industry examples, as presented by Spooner, where advanced S&OP has created value include:

 

                 
Industrial

 

  • Inventory down 7%
  • Service up 8%
  • Forecast accuracy up 23%

High tech

 

  • Inventory down 9%
  • Revenue up 7%
  • Expedited shipments down 30%>
  • Forecast accuracy up 20%
CPG

 

  • Scrap reduced 65%
  • Service up 12.7%
Food and beverage

 

  • Market share up 7%
Telecom

 

  • Inventory down 40%
  • Bias down 10%
Biotech

 

  • Inventory down 12%
  • Forecast accuracy up 31%

These results, while likely not typical across all businesses in those verticals, are directly related to P&L alignment with the supply chain, resulting in the ability to make better tradeoff decisions, which provides better profitability overall.

 

In another example noted in Spooner’s presentation, one company was able to see dramatic results by applying advanced S&OP to its specialty products, and not its standard ones. The decision was made because of the high level of difficulty in forecasting for those specialty items. By not holding accountability for forecast inaccuracies for those SKUs, the company was able to take what was a constraint and work it through into a positive—effectively tripling its profit levels in the process.

 

Making financial planning more predictable

 “Based on our research, every organization which aligns top down financial plans with bottom-up demand plans, as part of their S&OP, see an improvement in the accuracy and predictability of their financial forecast”
—Matthew Spooner, Research Director at Gartner

 

According to Spooner, no process is more fundamental to financial prediction accuracy as S&OP. Gartner’s research shows more than one-third of companies are missing the ‘S’ or ‘OP’ in their S&OP processes. Only 19% of those surveyed said they had strong bidirectional (upstream/downstream) S&OP owners in their companies. But what’s surprising is that even among that group, only 55% of companies are actually operating to the agreed upon demand plan.

 

Why? Spooner says it’s likely a result of poor alignment—the people who committed to the plan aren’t actually following it. Instead, they’re all doing their own thing. When you have groups within your organization that are playing games with the numbers like that, it has a direct impact on the financial plan. And that puts the rush on to remove that behavior to prevent further degradation of your bottom line.

 

By reconciling demand, supply and financial plans you inherently improve the accuracy of those financial plans because you have real numbers that are actually being executed to. When everyone’s aligned to the same plan, the same metrics and the same corporate vision, improving your P&L statement becomes a monumentally easier task.

 

Putting the pieces together

It’s important to remember advanced S&OP doesn’t happen in isolation. There are multitudes of pieces that have to be in place to make advanced planning work. Spooner lists some of them as:

 

  • Product review
  • Demand visibility
  • Supply visibility
  • Strategy alignment
  • S&OP
  • Financial alignment
  • Sales and operations execution
  • Agility
  • Inventory health

If you’re missing just one of these components, planning fails and you aren’t able to provide a profitable service. For example, if you’re missing demand visibility you could end up with higher than optimal inventory levels, because you can’t see what you have, what you’re missing and what you’ll need in the near future. If you don’t have supply chain agility, you’ll face long lead times because you won’t be able to react and respond quickly.

 

Creating a continuous planning cycle

Leaders in advanced S&OP have some common traits. Chief among them is that demand and supply planning are continuous, not linear. Best-in-class companies also have automated transactional data and have delegated decision-making rights further down the organization, instead of only at the executive level.

 

Exceptional S&OP processes ensure day-to-day decisions are dealt with automatically, whether that’s through automation or a pre-defined playbook, but also that critical issues can be dealt with on an ad-hoc basis without having to wait for the next S&OP meeting.

 

So how can you get there? Spooner’s plan looks like this:

 

Right now

 

  • Evaluate whether your S&OP processes are delivering value
  • Schedule time with your functional team leaders and internal sponsors to get their feedback

Next 90 days

 

  • Meet with your peers to create an S&OP vision
  • Educate partners on the critical role supply chain plays in realizing that vision and transforming the business as well as what’s required to ensure success
  • Identify which product lines and business segments are good candidates for advanced S&OP

Next 12 months

 

  • Align your corporate and supply chain strategies
  • Develop a plan to test, learn and implement
  • Execute that plan

Once you’ve mastered advanced S&OP, you’ll be well-equipped to take your company’s planning to the next level, where you’ll be able to develop plans that are simultaneously local and global and are orchestrated virtually.

 

Even in limited use across your planning, advanced S&OP can drive real profitability for your company. You just have to get aligned.

 

Is your company using advanced S&OP? If so, how? Let us know in the comments section below.

 

The post Driving profitability through advanced S&OP appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2017/06/driving-profitability-through-advanced-sop/

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