What does it mean to be responsive?
I spent the day at the Smart Manufacturing for Electronics event in San Francisco today (which, by the way, has MUCH better weather than the midwest this time of year). This is an electronics focused event, so key themes were on flexibility, supply chain agility, responsiveness, etc.
One session in particular caught my attention. A large semiconductor manufacturer was talking about the volatility in their market and the need to be able to simulate the impact of forecast changes and such within their Sales & Operations Planning (S&OP) process. They are using a traditional supply chain planning application to do this.
A single simulation takes anywhere from 16-20 hours to run! They are able to do one simulation per day. Is this responsive?
What we find is that two fundamental truths exist: 1.) there are so many moving variables and such velocity of change throughout large businesses that lots of simulations need to take place (what would happen if demand went up by 10%? what would happen if it went down 5%? etc.) in rapid fire succession. These need to provide immediate results so people can then evaluate other scenarios. 2.) simulations require collaborative input. Traditional supply chain planning applications are built on optimization logic that generally requires some PhD’s to fully understand. In other words, they are not applications designed for collaboration around various action alternatives. They are intended to be setup with a set of variables, then run….and run…..and run.
These solutions are fine if you’re doing long-term planning, but they don’t enable the type of “sense and response” that is critical to survive and thrive today. Responsiveness is achieved by empower the right people in the organization with the information and tools they need to quickly collaborate and choose the right action to take with confidence.
