Words get thrown around like rice at a wedding these days to describe what makes a world class supply chain planning system: “End to end visibility”, “collaborative planning”, and “what if simulation” are only a few of the many terms you hear when discussing the keys to supply chain success. Don’t get me wrong, these are all valuable attributes, but are often addressed in isolation and problems are usually tackled one functional silo at a time.
Kinaxis CEO John Sicard talked about the traditional, siloed view of supply chain during his interview with SupplyChainBrain’s Russell Goodwin. The title of the interview, Revolutionizing Your Supply Chain Planning, immediately made me wonder, “Are you yanking my chain?” The word “revolutionizing” was one I hadn’t heard in any supply chain narrative before, and with a word that strong, doubt is a natural reaction. When you hear “revolution,” you think the American Revolution, the Spanish Civil War, Batman vs. Superman. Ok, maybe not that last one, but epic supply chain battles definitely aren’t top of mind. However, Sicard got me thinking of a revolution like a rotation, a turnaround, a 180 – a way of doing things differently.
Goodwin does a great job of extracting the definition of the supply chain planning system revolution from Sicard. In this case, yanking my (supply) chain is actually a good thing. Let me explain. Mr. Sicard started by looking back with a brief supply chain technology history lesson: “Processes are disconnected because supply chain planning has grown up in a siloed manner,” he said.
Because of these functional barriers, “it’s futile to follow that model and think you can optimize the supply chain one link at a time.” Since functional processes are disconnected, it takes a significant amount of time for the impact of a change to get from one end to the other of the supply chain. In most organizations today, the supply chain is managed by looking at the individual links in the chain. That makes it difficult for individuals managing one supply chain planning process to know what the others are doing or what impact their decisions have on others.
The revolution in supply chain planning systems begins to happen when these links are connected. Sicard’s chain analogy paints a powerful visual. “Like a chain, when you pull it you see the impact it has in the other direction.” When supply chain processes are “simultaneously linked”, you immediately see the impact of any change. Planning becomes concurrent and cycle times are cut from days and weeks to hours and minutes. If you yank on one end of the chain, impact is instantly felt at the other end.
Sicard painted another vision of the revolution. Think about how your brain can interconnect multiple processes. “For example, you can understand language and math simultaneously. If you are asked a math question, you can respond in English. You can’t disconnect the two and the thoughts just happen.” In supply chain, if you make a change in capacity, you will immediately start to think about the impact on supply and demand.
If the supply chain planning processes are wired like the brain is, then you should be able to ask a supply chain question and immediately get the answer. If I take this new customer demand, what existing demands will be at risk? What supplies are causing the demands to be late? Is it a capacity issue? Is there another source of supply? What will be the hit on margin if I expedite? Instant answers to these types of questions will obviously drive the right responses to change. Supply chains today have the ability to do simulations, but in the revolutionized supply chain, anyone can simulate anything in seconds.
Sicard notes the ability to simulate in seconds is a computer science challenge. And not many have solved the problem. If everyone has their own sandbox to conduct simulations, think about the data challenges associated with that. Now you need multiple versions for any number of people to test and compare any number of scenarios. Legacy systems have precluded us to guess, and has driven Excel to the top of the list for most widely used supply chain tools. The revolutionized supply chain has solved the big data and versioning problems. Users can look at the past, present and future while collaborating across functional organizations with the ease of having a conversation.
An encouraging final comment from Sicard is that the supply chain revolution has started, but it is a journey. Companies that have already started this journey are achieving impressive results, and capturing lessons learned along the way. Unlike the typical revolution, there are no causalities, except your Excel spreadsheets. Let us know if you’ve started the journey and check out the interview here.