Chasing perfection is killing your supply chain

AlexaCheater

Forecast accuracyThere’s no such thing as 100% when it comes to forecast accuracy. Let me say it again. One hundred percent accuracy does not exist. I don’t care how good your demand sensing is or how sure your sales team is of their market projections. It’s just not possible. Anyone who says differently is either selling something, or a deity. So why are you spending so much time trying to make the impossible real?

Time and again I’ve heard how important forecast accuracy is when it comes to improving supply chain operations. It always seems to be a priority no matter where on the maturity scale a company falls. But this practice of chasing perfection is killing your supply chain. Not slowly, over time, but rapidly, like a tsunami sweeping your profits out to sea as that one giant wave recedes. Because that’s all it takes to destroy you. One catastrophic unexpected event.

Why forecast accuracy fails

It could be a natural disaster, a drastic shift in the political landscape or even the collapse of your only tier one supplier. The unknown is your biggest supply chain weakness, and the one you’ll never see coming, no matter how great you are at forecasting. Pretending otherwise, that forecast accuracy can save you when the unexpected strikes, is foolhardy at best, a death sentence at worst.

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5 key trends affecting the Consumer Package Goods industry

Dr. MadhavDurbha

CPG supply chainIn my recent conversations with the CPG industry executives, regardless of the company, there are several common themes and trends that bubble up. These trends make the business conditions more challenging, and some may say exciting. I will review some of these in this blog.

1. The assault on brands: The great recession of a few years ago has caused significant shifts in the consumer buying behaviors. Private labels have gotten better with packaging and presentation, in addition to value for money. A recent wall street journal article about Brandless, a company which sells generic CPG with simplified US$3 (three US dollars) pricing for every product on its site is an example of creative business models that are popping up. Competition is using pricing or niche assortments as a means to compete with branded manufacturers. Amidst lessening brand loyalties, CPG brand manufacturers are being forced to become more cost competitive.

2. Increasingly complex and volatile supply chains: There are several trends here that are causing increasing complexity and volatility for CPG supply chains. Here are some:

a) Increased price and promotional actions – Dynamic intraday pricing by the likes of Amazon and increased promotional activity targeted to consumer segments or even to individual consumers are causing more demand volatility, shifting more volume and revenue towards promotional business as compared to turn business. Word of mouth, good or bad, is now spreading much faster in online channels.

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Coming soon to a supply chain near you: 8 big digital disruptors

AlexaCheater

CPG supply chainEvery day it seems as if one company or another is touting they’ve just released the next big thing—that new device that will change your life. In reality, all this emerging tech, whether it’s turning your world upside down or not, is having a very real impact on how businesses manage their supply chains. None is feeling the effects more pointedly than those in consumer packaged goods (CPG), as all this new technology has fundamentally altered the way consumers research and shop for products.

That in turn is changing how organizations are manufacturing and delivering goods. As John S. Phillips, SVP of Customer Supply Chain & Global Go-To-Market for PepsiCo shared during his keynote presentation at the Gartner Executive Supply Chain Conference, this digital revolution presents enormous challenges and opportunities across the end-to-end consumer value chain.

He outlined eight emerging technologies that are most likely to drive dramatic changes across the CPG supply chain.

1. Connected home

You won’t just find smart devices in futuristic TV shows anymore. Odds are there’s one within arm’s reach of you right now. But smartphones aren’t the only device turning your home into something straight out of The Jetsons. Already on the market, Samsung has released a refrigerator that lets you see its contents in real-time directly from your phone or the in-door display panel. HP has a printer that can order ink and have it shipped directly to your door automatically. Whirlpool has a washing machine that does the same thing with laundry detergent.

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The rise of IoT in supply chain planning

AlexaCheater

IoT Supply chain planningThere’s no denying the Internet of Things (IoT) has taken hold of nearly every aspect of our lives. With the number of connected devices estimated to surpass six billion next year and more than 20 billion by 2020, the steady stream of data these devices are providing can easily crowd and clog your supply chain planning processes if you’re not prepared.

Gartner Research Director Andrew Downard addressed the issue during his presentation at the Gartner Supply Chain Executive Conference by outlining three macro trends affecting supply chain planning, chief among them IoT.

He defined IoT as a system of inanimate internet-connected devices linking the physical and digital worlds, and predicted that retailers engaged in IoT partnerships with major manufacturers will take significant market share from their competitors as early as 2018.

When it comes to your supply chain planning, the data sourced from IoT-enabled devices lets you continuously sense, communicate, analyze and act.

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Nissan Motor Co. to revolutionize S&OP

MelissaClow

Headquartered in Yokohama, Japan, Nissan manufactures vehicles in 20 countries around the world. Nissan offers products and services in more than 160 countries and areas worldwide. As a leading global automotive manufacturer, Nissan Motor Co. operates in a complex and competitive environment.

Because of this, the company struggled with disconnected, manual planning processes, which required a concurrent planning platform to enable a more efficient operation. After a competitive evaluation process with multiple vendors, Nissan selected Kinaxis RapidResponse because of its concurrent planning capabilities.

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How you doin’? Is your supply chain doing the right thing to prepare for the future?

BillDuBois

Sears supply chainThe other day I turned on the news to the headline of Sears Canada closing 59 stores. My thoughts went immediately to images of my mother passing around the Sears catalog as she asked us to mark pages with gift suggestions. That tradition continued with my own children as she would sit down with them and shift through the toy section for ideas. What happened to those “good ole days?”

Those days of bonding over the Sears catalog were over a decade ago and the strategy of mailing a catalog has long been left in the dust. In the meantime, Sears hasn’t turned an annual profit since 2010, with losses in the billions. The gut reaction for many would be to say Sears, or its Kmart brand, didn’t keep up with the growth of online shopping, but the store’s troubles started long before browser buying became the norm, and can be tied to the brand not planning for the future of their supply chain.

Doing things

For the most part during all those years of losing money, Sears didn’t change the way it did business. The company just went about the day doing things the way they’d always been done, like mailing catalogs. It did little to invest in its brand and tried to work its way back to profitability by cutting. There was also little done to attract new customers and the Sears clientele remained for the most part late baby boomers. One would have been hard pressed to find a millennial coming out of Sears and pulled aside for an interview on what they thought about the store’s demise.

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Supply chain planning in the digital age

MelissaClow

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.

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Supply chain leadership lessons from Dallas Cowboys legend Troy Aikman

AlexaCheater

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.

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