I interviewed Julio Franca who discussed Part 3 - What Trends will affect the Next Generation of Supply Chains?
1. Please provide a brief background of yourself
Sure. I am a Naval Engineer with a Master in Finance and a MBA at Rotterdam School of Management (top 5 in Europe). I have over 20 years of experience in Supply Chain, having spent ½ of my time as a Supply Chain executive in a FMCG manufacturer, running operations, and the other ½ of my careers as a Supply Chain consultant.
Currently I am one of the founding partners of Spin Consulting (www.spinconsulting.net), a specialized SC boutique who differentiates by deliver fast, tangible and sustainable results to our clients.
Thanks for having me here.
2. This is the third interview in our 3 part series about the top 10 issues affecting the next generation of supply chains. Last time you discussed to issues 4, 5 and 6. What would you say are the next 4 issues in order of importance?
7. Micro segmentation will be key to success
8. Technology to support SCM will primarily be “on tap.
9. Leaders will leverage social media in a closed loop feedback process
10. Artificial intelligence will be embedded in mainstream supply chain activities
3. Please explain what each issue is and why it is important and what can be done to effectively address these 3 issues?
7. Micro segmentation will be key to success:
Do you have a detailed knowledge of your individual consumer or customer segments—your micro segments? The honest answer for most companies would be “no.” A micro segment is defined as that exact part of the general buying category that triggers the purchasing decision—not the category itself. To illustrate, in recent work with a provider of smart phone accessories, we discovered that the company had several underserved micro segments—specifically, the design your own/assemble your own accessory segment. However, the ability to identify and service those segments was far beyond the reach of this company’s supply chain. Going forward, organizations will need to know their micro segments, and their supply chains must be able to effectively service them based on the business strategy. I always encourage clients to think of their business in terms of the individual consumer or groups of consumers as opposed to a broad brush view of categories. Put another way, adopt a B2C (business to consumer) mindset even if your operation is predominantly B2B (business to business).
8. Technology to support SCM will primarily be “on tap. :
SaaS (software as a service) is gaining main- stream attention. We contend that most if not all supply chain technologies by 2020 will be delivered and consumed via this method—or “on tap.” The user will pay for the ability to use the capability and will not have to incur the large fixed costs of ongoing maintenance, upgrades, and infrastructure expenditures that can amount to almost 25 to 30 percent of the cost of ownership. The widespread adoption of SaaS constructs will likely be accelerated by the rise of cloud computing and diminishing concerns about the security aspects of SaaS.
9. Leaders will leverage social media in a closed loop feedback process:
Social media data is everywhere today. In recent work we did with a durable goods company, we found that they had 2,000 websites/ blogs that were discussing their products and service needs on a fairly regular basis. However, this company—like most—did not have a systematic method to study the data and disseminate the information to the various supply chain constituencies (design, planning, procurement, service, manufacturing, and so forth). This is necessary to provide closed loop feedback processes that allow the company to proactively respond to the feedback. The winning companies will be able to receive, process and act on the data that is being provided to them by their constituents via social media.
10. Artificial intelligence will be embedded in mainstream supply chain activities:
Humans learn by doing and processes improve as they get “leaned out.” Yet somehow, every time we build a supply chain system we begin the process from the ground up. Planners go through the same calculation steps every time they start; procurement folks repeat approximately 35 percent to 40 percent of the activities they did in the past. The same holds true for people involved in building logistics and execution systems. The problem is that when embarking on a supply chain program or initiative we do not have access to algorithms that learn and retain the knowledge and experience of the past. We contend that supply chain artificial intelligence will need to be embedded in more effectively automating mainstream supply chain activities.
About Julio Franca
Director at Spin Consulting