In his white paper entitled Four Steps to Take Now to Prepare for the Recovery: Strategic Supply Chain Management Strategies to Maximize Operations Performance Over the Long-Term, John Sicard talked about the need to empower people to collaborate. He quotes Stephen Haeckel, ‘Adaptive Enterprise’; “Human skill in recognizing patterns and thinking creatively about unanticipated challenges will continue to mark the difference between successful firms and unsuccessful ones.”
I couldn’t agree more. In virtually every one of my consulting engagements, whether in electronics or semiconductor manufacturing, aerospace, industrial equipment, or most recently, pharmaceuticals, I’ve found one (and sometimes more) key individuals in the supply chain planning function who really understand the business, think creatively, and see opportunities for improvement. These are the Local Heroes in the organization. As well as understanding the products and customers, they seem to know everyone, and they have a pretty clear picture of whom to go to for help with any issue. They’re usually the ones entrusted with the task of creating that monster spreadsheet that the head of Operations just can’t live without. You know the one: that report that’s usually named after the VP himself or has some other catchy name— everyone’s go-to report. Just look at the detail in one of these, as well as the number of exceptions flagged, and you’ll begin to understand the number of complex factors they’re weighing as they try to pin down the supply plan: ever-changing demand, supply disruption issues, increasing costs, and supplier problems.
These key individuals will never be replaced by planning systems. The real challenge is to make them more efficient at what they already do well. How do we do that? What’s really needed?
First of all, I think they need to be spared the task of assembling all of the raw data on the current situation. How often is a creative idea shot down now because someone points to a single incorrect number manually entered on a spreadsheet, and assumes that all conclusions are therefore suspect? Everyone needs to see the same base numbers and have confidence that they’re right. This has to be easy.
And I think they need visibility of the whole supply chain in this raw data, not just their own local plant. Outsourcing is so very prevalent now, that it’s a given that data must be shared with all partners.
Then they need tools to help them document their ideas for change in a structured way. The ability to simulate various scenarios so that they can share probable impacts with everyone involved–whether internal or external to their own organization—is critical. One of my customers broadly categorizes these as “What-Is” and “What-If” simulations. He uses the term “What-Is” for everyday events that need analysis on a regular basis. What do we do when that demand comes in later than forecasted? What happens when we move those two orders out to provide capacity for this new high runner? The list goes on and on. But then there are the “What-if” questions that are perhaps longer-term and more strategic in nature; they must also be analyzed proactively to have potential strategies in place. What if this supplier goes out of business? What if we close these three plants and outsource some of this production? What if we add a new production line?
And lastly I think they need the tools to share the results of these simulations, to let others know what their assumptions are, what alternatives are being considered, how the alternatives are being evaluated.
I’m sure all you Local Heroes can relate to some of these issues. Your role as front-line planners is not a simple one. I’d love to hear more about what kinds of systems support you need to help you do your job better. What capabilities would bring you the most benefit? What gaps should we be working to fill?
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Tags: Scenario management
Posted in Supply chain management
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Humans are still the most important asset in a supply chain, and you’re right: Some by far outperform any software in pattern and trend recognition, and most of all, in strategic forward-thinking. Having the right people can make or break your supply chain. Giving them the right tools and data should be imperative.
I agree with wth Jan. I worked for a pharmacuetical company and was hired to create and run an engineering warehouse. That blossomed into a company wide hub for almost all items. I was asked “how far this thing would go”. After I perform some quick analysis, I estimated around 10, ooo scews and an estimated inventory of around 3 – 5 million dollars. After the fifth year we had topped out at exactly those numbers and the decision was made to outsource that inventory. I had made suggestions and did what I was allowed to do for several years in an attempt to reduce those numbers, but was forced by managment, to keep adding items that I knew was going to be dead inventory ( zero turns) within the first year. I was one of the LOCAL HEROS I guess because I was the “Shell Answer Man” on numerous subjects, in and out of my area of expertise.
My position, and the position of the four people that worked for me have been eliminated and the outsourcing has begun. It will be interesting to watch and see if that works out for them as they have many specialized components.
As far as the “GOLDEN REPORT” I know exactly what you are saying. I had to generate this each and every month, with quarterly and annual kickers to go along. And in the corporate meetings, the same questions kept coming back at me why is the inventory amounts so high? I had nothing to do with what was put into the inventory or the quantities, yet it was my fault when the dollars got to be too great. So the “scape goat is on the spit” and to all the frontline SCM out there, be carefull in how the Supply Chain is managed, it could cost you your job, it did mine.