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2014

I interviewed Patrick Gilis who discussed Positioning Of The Supply Chain Functions In Large Groups.

 

 

 

 

 

 

It’s nice to speak with you today, Patrick. Today your topic is positioning of the supply chain functions in large groups. Can you start by providing a brief background of yourself?

 

I would mainly describe myself as a supply chain passionate person. I’ve worked in that area for the past ten years now. I’ve gained experience both from the consulting and the industry area, where I did half of my career in each of these two areas.

 

Can you explain what you mean by positioning of the supply chain functions in large groups?

 

This is quite a usual topic that we see both at client sites and also as a question that is raised by students. They often ask how the supply chain function should be positioned within the organization. There are a couple of key challenges there, and I would mainly want to focus on the main areas, which are the vertical and horizontal positioning within the organization. This is important to see supply chain as not just one box to fit in there like it would maybe be for finance or accounting.

 

The vertical positioning represents how high are people in the hierarchy (responsibility level) and the horizontal positioning represents which core function the Supply Chain professionals talk to within the organization. If we look at the vertical positioning in terms of responsibility, the supply chain function shall not be perceived as someone who’s just sending instructions. This is not the person that must absolutely have the responsibility of the entire operations (those are more director or the COO related). The supply chain professional needs to be perceived as a strong/key influencer within the company; that’s the person seen as someone who’s willing to reach global objective instead of achieving local targets for a specific department. Some threats are that the supply chain leader within the company has to deliver both highly practical, factual resources for every function and still be able to be good, maintain productive relationships across the organization.

 

The horizontal positioning within the organization is also very important. The Supply Chain leader needs to be positioned as a trustful influencer. That is why, within the organization, we have seen various perceptions of the supply chain function. Some see the supply chain function as a more IT-related function, ERP software, when others see it as a function related more to procurement. My personal understanding is that the supply chain professional understands the key challenges and basics of the entire operations within the company, its related functions, and make them work as one to reach a global optimum. That is what I mean by positioning of supply chain function in large groups.

 

Why is it important?

 

That is pretty straightforward. The positioning of that function makes it either possible to achieve the expected result and performance. Not positioning the supply chain manager in a correct way, both vertically and horizontally will lead them to act in act in a limited scope and eventually create frustrations within the organization with the concerned colleagues. Let’s just say the supply chain function would be remitted to a highly procurement-related function. In this case this becomes unclear where the responsibilities are between the procurement function and the supply chain function. This positioning will either make it possible for this function to achieve the expected results one can expect from this function.

 

How is this done effectively?

 

Companies’ HR dpts. Must first have an in-depht understanding of their business and how existing positions are being fulfilled. The organization, and the challenges that will be met by the supply chain function are important. Depending on your area of business, the supply chain function will not need to work on all aspects with the same intensity, so this is pretty important to know what you can expect from the supply chain function. Second is that it is important to share the concept of supply chain within the organization, and it is also important to be clear about the objectives of that function. The supply chain person is not a cost-cutter nor an auditor, and neither anyone within the organization should be afraid of. It should more be considered as a helping hand within the organization. Last but not least is that there needs to be a clear commitment from top management for supporting supply chain function.

 

Thank you, Patrick, for sharing your views today.

 

Thanks for inviting me.

 

 

 

About Patrick Gilis


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Patrick Gilis

 

Senior Manager Procurement & Supply Chain @ KPMG

 

LinkedIn Profile

I interviewed Kerwin Everson who discussed Five Ways to Lift Supply Chain Productivity with Visible Data.

 

 

 

 

 

 

It’s good to speak with you today, Kerwin, and I’m looking forward to hearing your views today on the topic of five ways to lift supply chain productivity with visible data. Can you start by providing a brief background of yourself?

 

Sure, thanks, Dustin. We’re happy to do this. My name is Kerwin Everson, and I am a global practice leader or SME, subject matter expert, for supply chain solutions with RMG Networks. We’re headquartered in Dallas but we have global offices around the world. Supply chain solution is just one of the solutions we offer to visualize data and employee communications.

 

Thank you. Can you talk about what it means to lift supply chain productivity with visible data?

 

Well, one of the things we like to say, Dustin, is anytime you’re in the supply chain space, they have a wide array of data. They are rich in data, whether it’s parts produced, products picked or packed or shipped. The data exists everywhere but, typically, it’s in a system, it’s in a report somewhere. What we try to do through our visual supply chain is extract that data and put it where decisions can be made in real-time. One of the things we likened this to is, most of today’s supply chain is similar to going to a sporting event without a scoreboard. They don’t have the data visible that workers, managers, supervisors, and executives can see in real-time to provide the real-time metrics needed to meet goals for the day. That’s what visual supply chain will help them do; they’ll get a productivity lift just by knowing exactly where they stand at the moment and what they need to do by the end of the shift to meet their goals.

 

Why is it important?

 

Well, it’s important for a lot of reasons, but, typically, what we find in today’s supply chain is we see what we call a lot of business silos. One department doesn't know what another department’s doing; one plant doesn't know what another plant’s doing; one distribution center is not speaking to another; in some cases it’s even supplier not talking to manufacturer. Visual business intelligence is important to help. The number one thing it does is eliminate these business silos; so, it provides information up- and downstream of the supply chain so that one area can know exactly what’s happening in another. That’s just one of the reasons it’s important. I can go into all five of these, but you may want to slow down and ask questions in between, or would you just prefer I tell you all the reasons it is important?

 

Yeah, I think it would be interesting to hear the five ways.

 

That first one, really, visual business intelligence eliminates business silos. Secondly, we say that visual supply chain utilizes real-time performance management. If we’re relying on yesterday’s data or last week’s report, we kind of liken that to managing in your rearview mirror. Imagine the improved decision-making if you knew exactly where I stood right now and I wasn't relying on a report that was an hour or two hours old or tells me what happened this morning. Typically, that’s what we see in today’s supply chain: corkboards full of reports, thumbtacked up there. That’s kind of the second way. The third way is that we have experienced that visual performance management improves employee morale. There are lots of supply chain enterprises that pay employees based on incentive-based pay; the more you pick or pack or ship, the more we’re going to pay you, but then they don’t provide that scoreboard, as we talked about earlier. The employee wants to do a good job, and they’re the ones who will help you make a difference, but you have to provide them that real-time information; that’s vital to doing their job better and improving their morale.

 

The next thing that supply chain digital signage can do is increase efficiency and productivity within the supply chain. I already mentioned data’s everywhere but, usually, it’s manually updated. What’s amazing—I’m sure most of your supply chain audience who might be listening to this knows, they’re well aware of the Hawthorne effect that you can increase a worker’s productivity just by singling them out or managing or measuring a specific metric that is important to them. What we find in visual supply chain is that you get what you measure, whether you’re looking for an improved safety metric or quality or accuracy of orders or parts per minute or pieces per hour; whatever it is, you’re going to see an uptick in efficiency and productivity by visualizing that data and doing it in real-time. And then, finally, we think that visual data prominently displayed in real-time can actually raise your profit margin.

 

Everything we’ve shared up to now really translates to the bottom line: If we eliminate silos and have better communication between departments, if we increase, employee, engagement and morale, if we improve the corporation’s metrics and efficiency in productivity or safety or quality, all of this translates to ROI, Dustin, and we have real examples and case studies of customers that have seen 20 percent improvement in production levels or 5 to 15 percent in picking and packing in a large distribution center. The examples are certainly there, and we want to help customers visualize their supply chain data, not just post another report with day-old metrics.

 

Do you have any final recommendations?

 

Well, one recommendation I would give to anybody listening to this is to look into that whole concept of visual supply chain. Some of your manufacturers listening might call this visual factory. The point is, the more that you get the information out to where decisions are made, the closer to the decision being made, real-time information allows you to make real-time decisions. My suggestion would be to look at visual, digital signage as a solution to some of the roadblocks and hurdles you’re having to get through in your supply chain by relying on old data. RMG Networks, it’s certainly one those companies that we would hope you would look to when you’re trying to visualize your digital signage and put your metrics in real-time, up on scoreboards, on dashboards, on desktops, or even on mobile devices; we can help you with all of that.

 

Thanks, Kerwin, for sharing these views on improving supply chain productivity using visible data.

 

Thank you, Dustin. I appreciate the opportunity. We’ll look forward to more conversations in the future on other supply chain topics, but thanks again for your time.

 

Thank you.



About Kerwin Everson


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Kerwin Everson

 

Director, Global Accounts - Global Practice Leader

Supply Chain Solutions at RMG Networks

 

LinkedIn Profile

I interviewed Stacy (Monarko) Leidwinger who discussed Driving Visibility in Sourcing and Supplier Management.

 

 

 

 

 

 

It’s nice to speak with you today, Stacy, and today we’re looking forward to hearing your views on the topic of driving visibility in sourcing and supplier management. Can you start by providing a brief background of yourself?

 

Sure, Dustin, and thanks for having me today. My name is Stacy Leidwinger, and I’m the Director of Product Management for a company called Directworks. We focus on helping manufacturers understand all cost elements in their sourcing activities, specifically in the area of direct materials. We also then assist in how they pick the right team as it relates to supplier management. In my role I work very closely with our customer and really understanding much of the unmet need out there with manufacturers as it relates to sourcing and supplier management.

 

Why should manufacturers start focusing on their upstream supply chain?

 

Well, specifically in the realm of upstream supply chain, there’s a need for great cost visibility, especially when you talk about direct materials. It’s all the costs that potentially go into sourcing your direct materials in order to assemble your products. Today, when I talk to many manufacturers, it’s a very hands-on, manual process; they’re using spreadsheets as they get in quote information and sourcing details. No one supplier provides the same amount of information and data, and it becomes very challenging to understand the breakdown in terms of what the raw material costs are, the labor costs etc. This also means acquiring some of the information required to better understand supplier risk. Really, what I’ve done with customers and manufacturers specifically is try to automate and collect that data in a way that’s global so you can drive that visibility. By driving that visibility, you now can make better decision, which ultimately allows you to increase margins by reducing your total cost with that visibility. It’s also helping many manufacturers introduce new products on time, with higher quality because they’re going ahead and capturing the right margins up front; they’re understanding who they’re selecting as their suppliers; and it helps them mitigate their risk. It’s not just a cost factor, but it’s an overall risk factor that this visibility drives for them.

 

And about risk, can you talk about what the key risk areas are that manufacturers face when they’re managing other suppliers?

 

There’s a number, depending on the industry and vertical, but at a very high level, one thing that we really help our customers and manufacturers walk away with is: How do you pick the right team to start providing your direct materials out of the gate? And in order to manage risk, you really need to have all the information possible to make the most informed tradeoff decisions. You need to understand risk elements such as: Can your supplier meet the demand? Do they have enough capacity to actually deliver to you what products and parts and components you may need for your own assembly? You also need to go ahead and understand their past performance. Have they done the right quality checks in the past with you? Many of our customers—you know, I work with manufacturers—they look at their scorecards for their suppliers, and before they go ahead and source, they start to understand what their past performance has been, what their weak areas have been. We also can help customers really understand and segment their suppliers by value. Again, they recognize what they can do for them. What’s the best value they can provide? All of this helps reduce the overall risk of picking the wrong supplier, someone who can’t deliver the right quality, meet capacity needs, maybe goes against some of the compliance, like conflict minerals, that are out there. In order to avoid all that, you need that 360-degree view of the supplier, and we enable manufacturers to capture information that at a global level and always provide that view to try and prevent the risk of picking the wrong suppliers to join your team at the end of the day.

 

How is technology being leveraged to drive visibility in the upstream supply chain?

 

As I mentioned, today many manufacturers have a very manual process. They’re actually doing a lot of their sourcing and quoting activity in spreadsheets; they’re sitting in file shares not available for everyone; engineering teams are working with part drawings, CAD drawings, 3D images, and all those are locked in disparate resources. The key to a technology is to eliminate these islands of data and create a single location where all of this rich information is stored. It’s also about automating the process of how you collect that information, how you store the information, and how you analyze the information. I know Big Data gets tossed around in a lot of conversations today, but, really, that’s fundamentally what technology allows manufacturers to do by automating and standardizing that process. The other big key that I see a lot of manufacturers investing in in order to have that single view of all the information they need, that right level of visibility, is investing in integrations. The fact that, specifically for manufacturers, when you’re sourcing and handling supplier-management activity, you need data coming from perhaps your PLM systems, your ERP systems. As you collect this data, you need to be able to flow data in, interact with that information, analyze it, and then flow it out to other systems that then may require other activity within your supply chain. At the end of the day, technology really helps automate and standardize those processes, as well as ensure that manufacturers’ sourcing and supplier-management needs are fully integrated not only in their upstream supply chain, but as well as their downstream.

 

Do you have any final recommendations?

 

I think, really, my final recommendation for many manufacturers is: Look at your processes today. How automated are those processes? Start asking questions of: Can I have a global view of all my sourcing activity? Can I break down the total cost of different product lines, programs, initiatives that I have going on? If the answer is no, there’s a great chance you’re leaving money on the table throughout your sourcing activity. Your supplier risk may be high. It’s really time to look at those processes and understand how data is being collected, how it’s being used in the decision-making process, and identify ways to start automating and standardizing those policies and practices. At the end of the day, there’s lots of information out there, but I think it’s key for manufacturers to start looking inwardly and understand how I use that data to really start driving action, making the right decisions for my company based on sourcing and supplier-management needs.

 

Thank you, Stacy, for sharing your views on driving visibility and sourcing in supplier management.

 

Thanks, Dustin. It’s been a great conversation.

 

 

About Stacy (Monarko) Leidwinger

 

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Stacy (Monarko) Leidwinger

 

Director of Product Management at Directworks

LinkedIn Profile

Websites

http://www.directworks.com/

http://www.directworks.com/Total-Cost-Visibility?referrer=RC

http://blog.directworks.com/direct-materials-spend-deserves-strategic-treatment/

I interviewed Nitin Sinha who discussed Lean Supply Chains For The Service Industry.

 

 

 

 

 

 

It’s good to speak with you today, Nitin, and I’m looking forward to hearing your views today on lean supply chains for the service industry. Can you start by providing a brief background of yourself?

 

I’m currently a director with a company called Sigma Way, which is into process consulting, analytics, marketing intelligence, IT, and training. Prior to that I was with a company called Genpact, which is an offshoot of General Electric. That’s the high focus in Six Sigma and lean, because General Electric was so much into it. I am engineer, as well as an M.B.A. from Delhi University in India. In addition to that, I hold different certifications in financial risk management, as well as black belt and master black belt in lean and Six Sigma.

 

Great. My first question is regarding using lean techniques in the service industry. Can you talk about how it’s done and the transformational skills involved? How we transition into the service industry.

 

Technically, when I compare manufacturing to a manufacturing scenario, for example, the basic concept of lean being a full function and we only manufacturer when the customer demands it. We keep the inventory low, as low as possible. That is a JIT manufacturing paradigm, as well as the the Single-Minute Exchange of Dies, which is called the SMED technique in manufacturing, where multiple products and manufacturers on the same assembly line, how quickly can we change the contribution situation of the assembly line so that not a lot of time is wasted and optimized production can take place? To transfer these techniques, they’re actually quite relevant in the service industry as well.

 

What are the challenges involved?

 

The main challenges in the service industry are, from my perspective, the unit which is on the assembly line is actually your customer, to expedite to them by doing the change. Rather than a good or artifact, it is the customer who’s on the assembly line as it’s expediting the change, as it passes through your service experience. That is the key challenge, because a customer is also dictated by his own moods and the circumstances, so you might offer him consistent service on two different occasions, but he might be in a different mood and might be expecting something else on the second occasion compared to the first one and might not be happy with your service. That, I think, is the key term.

 

Usually, we talk about processing a single at one point of time. In the service industry, this is an industry where reports are very prevalent, and if you look at it, a lot of times, the reports are in batches. The reports consist of a list of transactions. That in itself kind of goes against the lean paradigm. That’s one of the challenges.

 

Similarly, when I talked about using Just In Time in the service industry, in today’s scenario direct companies are trying to get into big data and analytics, and they are buying expensive software. For me, there is no point in doing analytics unless you can take action from the insight you get. Different companies have got different capacity to take action. Some companies are nimble enough to take action in real-time; a lot of them use real-time and the systems that contribute that way. And some companies take a week or two to respond to a report which came out last week.

 

In my mind, you should only be producing insight almost at the rate at which you can take action. Anything else, actually, is a waste of resources or almost like an inventory when I compare it to the manufacturing industry, because you’re not going to be using it. You want it to be used in the proper time, and it might get old, the information might get old.

 

Similarly, when I talk about the SMED, or Single-Minute Exchange of Die technique, I compare it to the contact centers and the call centers today, which are highly prevalent. When we look at the people working in the service industry today, they’re not usually playing on one thing. They’re to handle multiple kinds of calls, they’re to handle multiple kinds of channels. You have the same person in a lot of cases talking on social media, like Facebook, Twitter, also on e-mails, and then talking on the phone as well. How do you manage all of this, because usually, the software for all of this is different? For this, it’s a combination of training, as well as software.

 

In my mind, when I look at SMED, I look at a lot of middle-ware software. These are common with one interface to talk to these multiple channels, as well as optimal cross-training of each of the employees who have such interactions so that they can function in multiple ways or multitask. To me, that’s also an application of Single-Minute Exchange Die; otherwise, you’re looking at different people and different rules, handling different kinds of interactions. And some companies still do that, but I think the contact centers which do really well are people who are using the same people or employees to interact with these multiple platforms.

 

Can you talk about how you implement in the service industry?

 

The typical lean implementation, let me compare it to a manufacturing scenario. One of the companies which is where it all started, is Toyota. The culture is really ingrained there; Lean is a tool and technique, as well as a culture there. I think in the service industry, the culture for companies’ improvement doing a lean improvement is important. The first thing we need to do while implementing in the service industry is to give the gauge the situation and understand if there is any kind of change needed there, and there are change leadership tools and techniques we deploy to make sure that we get support for the lean deployment from the leadership.

 

In addition to that, I think we do a lot of process mapping—not big ones, but one of the key tools by implementing the Lean tools and techniques is value stream mapping, where you look at a profit in a value stream and then try to identify ways of alternately using nonvalue-added activities and reduce things. Now, in the service industry, in my recent experience, what I found is it’s very tough to get people out into a room away from their desk for three days or five days to create a huge value stream and then start looking at improvement opportunities.

 

So, what we’ve started doing is a lot of pre-work where we are going to the people at their desk, looking at their processes, and trying to create a draft value stream map ourselves and then bringing the people into our room for a day and a half and then asking them to quickly validate it, make the changes, and start implementing process where we try to identify non value-added activities. Another thing which really helps which is different about the service industry, a lot of times one of the requirements are the processes which people are using. You might not need to change any software. It’s just the process the people are doing; it’s not the machinery as such. That is relatively easy on paper, but actually, we’re talking about changing behavior and, in some cases, behavior of people which they have been doing for years and years.

 

For that, I think it’s very imperative that we do something called..... which is a planning exercise where, once you’ve brainstormed on implementing ideas, we actually try to implement it ASAP. We actually try to implement the easy ones during the course of the lean event or the value stream mapping event, what we call a Kaisen event. We try to implement it during that time so that people are in that mood. When they’re in that room, they’re talking to other cross-functional employees. You want to improve your processes, when we get back to the desk, they might forget about it if it’s not reinforced. Thus, applying some activities where we tell them, “Okay, you’ve come up with ten ideas. Let’s try four of them right now. Let’s just go back to your desk; let’s try them right now and see what the results are. If they don’t work, we’ll drop those ideas and look at something else.” I think that really works within the service industry, especially when it comes to changing behaviors.

 

Thanks again for sharing these great insights on lean and the service industry.

 

 


About Nitin Sinha



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Nitin Sinha


Director at SigmaWay LLC

 


LinkedIn Profile


I interviewed Diogo Rocha Santos who discussed Supply Chain Big Data Impacting Business and Operations Planning.

 

 

 

 

 

 

Please provide a brief background of yourself?

 

I'm an Industrial Engineer and Continuous Improvement enthusiast, with experience in Business Analysis and Supply Chain & Operations Planning, both on industry and retail. I've seen and lived different scenarios within different sectors and companies. I'm driven by Process Excellence, meaningful and helpful IT systems and team engagement.


How is supply chain big data impacting business and operations planning?

 

A renowned economist named Joseph Schumpeter said (and I quote) “Innovations imply, by virtue of their nature, a big step and a big change ... and hardly any ‘ways of doing things’ which have been optimal before remain so afterward." (unquote). This is exactly what Big Data will do (and it is already doing) to businesses and Supply Chain Operations and Planning.


If you want to run an efficient supply chain operation, you rely on historical data you collect every day. When it started you just had some numbers, but now you can collect, process and access almost any type of data. The possibilities are endless and this is going to change many things: it will not only help your company to become more efficient and accurate, to save costs and maximize efficiency, but it’s also going to help you solve stock problems easier and with less disruptions, it’s going to help you to smooth your operations, because it gives you more information, therefore more time to plan them, and at the same time allowing to react in real time, and it can even help discover new business models.


So, as I said, Big Data in Supply Chain can be a game-changer. According to Eye for Transport, 84% of Supply Chain executives are already thinking about it and ⅔ are already planning on investments. Big retailers, like Tesco and Wal-Mart are already on it, with interesting results. And why is this happening?


People wonder about a reason for everything. Supply Chain acts relying on historical data, but your customers don’t. Weather, colours, visibility, other people, price, (you name it) everything is an input to your customer. Of course everybody knows that and they try to adapt things so your customer can have a good experience and, in the end, buy your product. But Big Data and its analysis will help you understand why and how these things exactly move your customers, by crunching the numbers, finding patterns and support your decisions. By that, your steps to improvement are much more firm and safe. Planning is for sure a place where the change is felt deeply: more accurate forecasts, even at SKU level, will allow companies to plan things better, more efficiently and with less gut-feel.


Why is this happening?

 

According to IBM, 2.5 quintillion bytes of data are created every day, with 90 percent of the world's data created in the past two years alone. Wal-Mart, which is already walking on the Big Data path, is estimated to process one million customer transactions per hour, stored in databases estimated to contain around 3 petabytes of data by now.

This is technology development following its normal course. Computers are faster, technology is developing at a faster pace every year, internet is everywhere (well, in developed countries, I mean), information storage is cheaper everyday and the urge to make more out of every business dictates you look everywhere for an opportunity and big data is a great one. It’s not just getting some more information, it’s putting it up to value. Besides the easy information to collect and the patterns you find in a blink, you can get to unimaginable reasons behind customer behaviour you (and even them) would not imagine, because sometimes you make decisions that only your subconscious understands.

 

And this is what everyone is looking for, a support for their decisions, based on real data.


How can things be improved?

 

The 3 things Supply Chain Executives expect to get with Big Data Analysis implementation are Supply Chain efficiency, cost reduction and supported real-time decision making. These three will be achieved through more accurate forecasts, based on much more data, bringing speed, scalability and preciseness. From here you better plan your operations and bring the most out of them. It will also allow you to reduce costs, by eliminating the non value-adding tasks, as you are better prepared, your decisions are better supported on so many more factors. You get to combine demand, supply, finance, marketing and many other data and factors into one enterprise-wide plan, while testing scenarios, advance issues and respond to them, reducing risk and lowering costs. You can better manage the risk of transportation, adapting to demand changes and supply disruptions in real-time, by managing supplier stability, weather forecasts and much more.

 

Some examples:

 

A retailer gets clear visibility on what products sell better on each time period based on a lot of factors that change customers behaviour. This leads to a huge drop in items that could not be sold on their time and need to be sold by lower prices. The logistics operation can have weather statistics for tornadoes, hurricanes, earthquakes, allowing it to orchestrate a plan B accordingly, reducing Supply disruption and lost sales. Production can become more effective, by having information of what will be needed and when sooner. This allows cost reduction, more quality and even the possibility to better adapt to customer needs on time for the season sales. Procurement gets a lot of more structured information on their suppliers, allowing a better evaluation and therefore a better selection and price negotiation. So, as I said, the possibilities are endless...


You cannot predict the future, neither your customers nor external and out-of-control factors, but you can be better prepared for what they will ask from your company. And I'm absolutely sure Big Data is the next ultimate gear you can get for Supply Chain in the future.

 

About Diogo Rocha Santos

 


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Diogo Rocha Santos


 

Business Analyst and Project Manager

 

LinkedIn Profile

I interviewed Richard Sherman who discussed Web 3.0.

 

 

 

 

 

 

It’s good to speak with you again, Richard, and today I’m looking forward to hearing innovative, interesting topic on, I guess we can call it the Internet of Things and why you think, if you’re referring to the Internet of Things, it’s a bandwagon or you’re playing the wrong song. But I’d like to hear your views on what you think, how we should be thinking about this topic, which involves technology and the convergence of things and people and everything, which you call Web 3.0. Can you start by introducing what Web 3.0 is?

 

Sure, Dustin. It’s always a pleasure to speak with you. You’ve got a great set of speakers and experts, and I think people really value your interviews. There’s a lot of hype, if you will, around the Internet of Things—Gartner is doing studies, Forester is doing studies—everybody’s talking about the Internet of Things, and the reality is, the Internet of Things has been around, I think Kevin Ashton gave a presentation at Procter & Gamble in 1999 and introduced this concept of the Internet of Things. I know some good friends over at MIT, and the MIT Auto ID labs have been talking about this for a while. The reality is: The Internet of Things is simply another evolution in the overall Internet and Web as we look at it. We look at Web 1.0, it was static pages. Web 2.0 introduced dynamic, collaborative pages. Web 3.0 is basically the convergence of the Internet of People, which is just about ubiquitous to us today. The Internet of People, the Internet of Things are converging to be the Internet of Everything, I think Cisco calls it. I simply refer to it as Web 3.0. It is basically going to be the platform upon which social and commercial networks are evolving into the future. It’s going to have, I think, a real impact on the supply chain.

 

How does this change everything?

 

Well, if you recall, in my book I talked about a vision of a smart supply network. When we think about what’s happening today relative to the Internet and mobility, for example, it used to be that we were wired to the Internet, but what smartphones and mobile phone are doing is untethering us from a wired Internet. Wireless technology and access are becoming as ubiquitous as the Internet itself. As we see people entering into what I refer to as the Connected Age, where they’re always on, always connected, we’re going to see more data becoming available in real-time than ever. Hence, we hear the trend to big data. If we take a look at the fact that there’s 6.8 billion people in the world, more than 4 billion have a mobile phone, which is 5 million more than have a toothbrush, we are always going to be connected. When you consider that 91 percent of adults have their mobile phone within arm’s reach 24 hours a day, seven days a week, there are almost 2 billion smartphone users in the world today.

 

Companies like Retailigence, LeadTime Technology, Cloud Leaf, these are companies that are bringing together the power of the Internet with the power of data collection through this Web 3.0. What we’re really going to see is a smart supply network 3.0, where I’m now going to have the data in real-time. I have superior business intelligence capabilities and better analytics than I’ve ever had before. IBM did not develop Watson to win Jeopardy; they developed Watson to demonstrate the type of analytic capabilities that are available to crunch the big data and be able to support not only predictive analytics but prescriptive analytics.

 

We are going to see operators throughout the supply network armed with this smart information, being capable of making the types of decisions in real-time that reconcile plan against actual and allow us to synchronize the flow of material, information, and cash along that entire supply network from its source point—in the food chain we like to refer to it as the farm—and carry it all the way to the fork, where the consumer is at. I’m now going to have the capability to analyze point-and-demand data right when a consumer is doing and searching through a product and going through their shopping. Seventy-four percent of smartphone users use their phone during their shopping experience. I’m going to have them driving all of the decisions in the supply network so that I can make sure that we’re eliminating waste. I think supply network management and smart supply network management are going to replace the traditional notions of the supply chain. Web 3.0 is really the enabler, the catalyst of the transformation from a linear, sequential-thinking supply chain to a more dynamic, systems-thinking supply network. I’ll call that the Smart Supply Network 3.0.

 

What should practitioners do to prepare for this change from supply chain thinking to supply network thinking? Is there a way to change your thinking or behavior?

 

Companies have got to begin to embrace the fact that this change is occurring. I like to always tell people, “You’re going to transform. You will go through transformations.” We’ve seen transformations from typewriters to word processing; from calculators to computers. You are going to experience the transformation; the key is either it’s intentional or unintentional. The leaders transform themselves intentionally so that they can capture the opportunity and return on investment and free cash flow that comes from innovation and transformation. The laggards will experience a transformation. They’ll be required to make the same investments over time; it’s just, they’ll never realize the potential in the opportunity and return that the leaders experience by being at the forefront of the transformation.

 

My advice to companies is: Don’t ignore these new technologies; don’t ignore these changes that are occurring. This is going to have a really prolific impact on our traditional supply chain thinking. We’ve got to look at the environment; we have to look at these technologies; we have to look at how companies are implementing those technologies. And companies have to really look at their customers and how their customers are embracing the technologies; segment their customers by markets and by capabilities and services required. Most importantly, companies have to document their current processes so that they can begin to see what activities and steps in their processes are going to change based on this new data, this new information. I spoke at an international business forecasting and planning conference about a month ago, and I introduced the notion that everything a company does is all about demand management. Forecast accuracy and improved planning dramatically increases return on invested capital and free cash flow. Why do we relegate that to some junior person or some department? Why are we looking at sales and operations planning as a monthly activity? We should have a chief demand management officer that’s responsible for assuring the company has the requisite technology to compete in the 21st century. So, that’s my story and I’m sticking to it, Dustin.

 

Thanks, Rich, for sharing these great insights on Web 3.0, what it is, how it’s changing, and what we can do to take on the change.

 

 

About Richard Sherman



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Richard Sherman

 

Principal Essentialist, Supply Chain Management at Trissential


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I interviewed Holger Nauheimer who discussed Change Management and Supply Chains.

 

 

 

 

 

 

It’s good to speak with you today, Holger, and I looking forward to hearing your views today on change management and supply chains. Can you start by providing a brief background of yourself?

 

Hi, Dustin, thanks for having me today. I’m an international facilitator of change. That means I work with large multinational companies, also with nonprofit organizations. I’m particularly interested in the human aspect of organizations; that means how teams perform, what leadership patterns we need in modern organizations, and we can engage employees in what they are doing and how we can motivate employees. That’s basically the field I’m working in. I work globally, including Asia, Middle East, Europe, all over the world.

 

Thank you. What is change management and why is it needed for supply chains?

 

Let me start talking a bit about change management, Dustin. The expression change management has been around for quite a while, like 30 years, and nobody exactly knows what it means, so I can only provide you with my understanding. I think change management is about aligning people’s purposes—what’s important for them—with the organization’s purpose. That means we need to understand concerns of people and need to see what the barriers for change, need to see what the barriers are for effective collaboration, then gradually start to optimize such systems of collaboration. That’s my understanding of change management: looking at the human aspect of complex change processes. That’s, in a nutshell, what we understand of change management. Probably, the term change management is a little bit misleading because it suggests you can manage change. I prefer to talk more about change facilitation because we are working in complex systems, complex social systems, so it’s more to facilitate or enable change rather than manage it and to work with what’s emerging in the system.

 

Is there anything more you can say about how you recommend it should be carried out?

 

That depends on the situation. Let me talk a little bit more about how I see change management fits into your topic of supply chains, and maybe then we can get more into specifics and how to carry it out, okay?

 

Great!

 

I’m not particularly specialized in supply chains, but, for me, it’s always a good laughter when I’m with my clients, with their team, and people are saying, “Hey, it’s not our fault for what goes wrong. Supply chain hasn't done their job properly.” It seems like supply chain serves as a perfect scapegoat for everything which doesn't work out. Is that something you experience also?

 

Yes, I’ve heard of that.

 

Okay. So, the challenge is that supply chain management is quite a linear approach. I would say it’s an engineering approach, which assumes that if we put all resources into place, actually, we should get good results. Of course, reality proves that, very often, this is not the case. This is because supply chain management meets with the reality of what I call a complex social system. And what we have understood in the past 20 years in change management is that, let’s say engineering approaches to management must fail because of the complexity of human beings and their relationships. Let’s take an example. I know you’re working in Asia, so let’s look at a typical Chinese setting, a typical supply chain in China. There are so many different aspects to consider there; aspects of authority, aspects of governments. There are very mixed stakeholders, including governments, suppliers, employees, and so on. All these stakeholders have different loyalties, and supply chain is not necessarily their top priority for loyalty. That makes things very complex; that makes things depending on issues like trust, on relationships, which means that from a change-management aspect to supply chains, we would look into issues of collaboration or trust. We would have to look into the motivation of people. What motivates people to collaborate in supply chain? Which means that you don’t need to only manage the supply chain alone; you need to manage relationships. That’s basically change management. What I’m saying is, what we can offer as change facilitators to supply chain management is, first of all, look into patterns of collaboration. How do people work together, and what are the barriers and blocks to collaboration? Obviously, we need totally new leadership practices, particularly when we’re talking about matrix organizations. When we talk about virtual teams, we need leadership patterns that go from control and command toward increasing alignment, increasing engagement, and particularly building trust between stakeholders. I think this trust issue is one of the hottest issues in change management nowadays. How do we really increase trust? In particular, how do we increase trust when we’re talking about virtual teams?

 

How do you recommend it be carried out?

 

That depends, of course, on the situation. There’s no general recommendation for change facilitation, but what I’m saying is: You have to look into the stakeholders and their relationships. That means, rather than only have meetings which focus on what needs to be done, have meetings where people also talk about how it is done and how they relate to each other. That means much more collaborative meetings. I think the development of agile management certainly points to the right direction. Obviously, in order to have these kinds of collaborative, open meetings, we have to, again, establish that element of trust in organizations, which means talking to people. This is a leadership task, obviously. Leaderships learning to talk to people and to understand what their purposes are, what’s important to them, to understand what their concerns are, what worries them, and to understands what their boundaries are and in which relationships they have their limits. Start to have conversations that really matter, where people really start to develop trust and don’t just pretend they were honest. You know what I mean? It’s really about getting people to be ready to participate in open and honest conversations and talk off their mind. I think, depending on the culture of the company or the culture that you're working in, this is quite a challenge, particularly if people very much adhere to authorities. We’re talking about a totally new leaderships style which enables rather than controls and commands. What we’re talking about is, we need a lot of training and coaching and facilitation in supply chains.

 

Thank you. My last question is: Can you briefly discuss the upcoming event that you’re involved with, called the Berlin Change Days?

 

Sure, yeah. About six years ago we started to organize an international conference in Berlin. We call it the Berlin Change Days. It’s a conference where people who are interested in exactly the topic I was talking about—change, participation, collaboration, leadership—come together and present new approaches to change. It’s really a kind of network meeting, and people show their new approaches, they show their tools, and we try to organize a learning journey together. It’s about 140 folks from around the world, and it’s happening every year, the first weekend of November.

 

Thanks again for sharing today your views on change management for supply chains.

 

Thanks for having me, a pleasure.

 

 

 

About Holmer Nauheimer

 

DR. HOLGER NAUHEIMER

 

For 30 years, Dr. Holger Nauheimer has been an expert on change management, organisational development, leadership and virtual collaboration. He has a world-wide reputation on the subject, gained by his publications on the web, such as The Change Management Toolbook, and the Change Journey. Holger has worked in more than 70 countries of Europe, Africa, Asia, and America as a trainer, facilitator of change, and consultant. His client base encompasses large global companies such as BP, DHL, Deutsche Telekom, Vattenfall, Airbus, etc. as well as international non-profit organisations such as the United Nations.

 


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Holmer Nauheimer


Collaboration | Leadership | New Ways of Working


LinkedIn Profile


Websites

Berlin Change Days 2014

holger nauheimer - collaboration | leadership | new organizations

I interviewed Chandramouli N.V who discussed Supply Chain Complexity.

 

 

 

 

 

 

It’s good to speak with you again, Chandra. I’m looking forward to hearing your views today on supply chain complexity. Can you start by providing a brief  background of yourself?

 

Brief background of myself is that I’m a postgraduate in commerce, as well as my M.B.A. by qualification, and I have experience across various industries like basically imaging, then medical devices, pharmaceuticals, what is API, and then imagining. Currently now with Thermo Fisher Scientific India as general manager supply chain, doing end-to-end supply chain growth. My basic interests are in the area of supply chain, especially in terms of the supply chain processes, talent management and supply chain, and then looking at some special features of supply chain, like automation and demand planning and supply planning, et cetera, and things like APO.

 

What are the key factors that are contributing to the push toward complexity in supply chain?

 

If I understand this question correctly, I think there are three major factors which actually contribute toward the push toward complexity. The one first thing that contributes toward the push toward complexity is customer-driven pressure for innovation. The second one is new markets and channels that are coming up. And the third is the cost-reduction pressure that actually operates in every market.

 

What are the drivers of supply chain complexity?

 

If I look at the question with regard to drivers of supply chain complexity, I actually come across about three or four very critical areas.

 

1. One is, of course, the cost squeeze. When you talk about cost squeeze, you’d like to consider things like outsourcing of manufacturing, outsourcing of engineering, then we have closing, shedding excess capacity, outsourcing of distribution and logistics, and also the move toward lower-cost geographies. That’s about cost squeeze.

 

2. Then we’re talking about the pursuit of markets. We’re actually looking at the whole world for minimizing the soaring cost of developing and manufacturing products. That’s the second driver of supply chain complexity.

 

3. The third one is product innovation; this is basically the top-line growth strategy that is used.

 

4. The fourth most important thing, which is, of course, very interesting, is the latest paradoxes that we have in terms of supply chain complexity. One is optimization. Although we want to optimize through manufacturing globally, due to innovative pressures and challenges, we still continue to manufacture locally. Customer collaboration. Basically, this is another area where the lip service is paid in the sense that normal collaboration on forecasting, strategy planning, then inventory management, et cetera. These could lead to lesser complexity; however, we will continue to maintain the different markets of different drivers, and we will continue to say yes, there needs to be deeper collaboration but do nothing about it. Then the innovation paradox, where, again, manufacturers are simply not prepared for faster new product introductions and flexibility. Again, this is being sacrificed because of the cost factor. And risk. The supply chain quality, whenever you speak about wanting to improve supply chain quality, this is still not possible because when we look at the cost and when the cost benefit analysis comes into play, it always looks like it’s better to give a lower quality of service than what you are currently offering or what you will be able to offer.

 

Can you talk about the challenges resulting from complexity?

 

The challenges that are resulting from complexity are, number one: I think, from my perspective, in terms of improvement of supply chain quality, because although we write books, we talk about being the easiest to do and these kinds of concepts, supply chain quality I think still remains to be a major question where people do not want to invest, people do not want to actually give prominence to, because they feel that it’s easier to offer a lower level of service to the customer, leave the customer more or less happy but not fully satisfied or fully delighted. As Jim Collins would say, this is the difference between good and great.

 

Thanks again for sharing your views on a great topic on supply chain.

 

Yeah.

 

 

About Chandramouli N.V


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Chandramouli N.V


GENERAL MANAGER SUPPLY CHAIN at Thermo Fisher Scientific


LinkedIn Profile