Posts by Dr. Madhav Durbha

Moore’s Law and supply chain planning systems

Dr. MadhavDurbha

Supply chain planning systemIt was in 1965 that Dr. Gordon Moore made a prediction that changed the pace of tech. His prediction, popularly known as Moore’s law, was with regards to doubling of the number of transistors per square inch on an integrated circuit every 18 months or so. As a result of the innovations attributable to the endurance of Moore’s law over the last 50+ years, we have seen significant accelerations in processing power, storage, and connectivity. These advances continue to have major implications on how companies plan their supply chains. In my nearly two decades as a supply chain professional, I have seen quite a few changes.

Let’s look at some of the big shifts that have taken place in the supply chain planning space.

1. Planning community gets bolder in tackling scale:

Early on in my career, I remember working with a large global company who had to take their interconnected global supply chain model and slice it up into distinct independent supply chain models. This was because the processing power at the time was simply not enough to plan their supply chain in a single instance. This surgical separation of supply chains required a high degree of ingenuity and identifying the portions of supply network with the least amount of interconnections, and partition them. This was not the most optimal way to build a supply chain model, but they did what they could within the limitations of the technology then. With the advent of better processing power, they were able to consolidate these multiple instances into a single global instance leading to a better model of their business. This is just one of many such examples.

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Insights from Kinexions Tokyo 2016

Dr. MadhavDurbha

Kinexions TokyoKinaxis hosted Kinexions Tokyo 2016 customer user conference event at the Canadian embassy in Tokyo. It was a stupendously successful event with many customers, prospects, and partners in attendance. The day kicked off with some very interesting and engaging presentations by Deloitte, Roland DG, Mitsubishi, and a Kinaxis keynote delivered by me. Here are some common themes based on the presentations and the conversations I had with the event attendees:

  • Organizations are looking to digital supply chains as a differentiator. With increased complexity and volatility in global supply chains, the ability to respond quickly to supply chain disruptions is becoming very critical. However, such transformation is not a big bang switch, but is a journey. Both Roland DG and Mitsubishi shared their experiences and their journey towards faster decision-making.
  • Companies are looking to significantly revamp their supply chain planning processes. This is due to increased realization that the current batch oriented planning processes are limiting their ability to run scenarios in real time and collaborate based on them.

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How Uber Parallels the 6 Design Principles of Digital Supply Chain

Dr. MadhavDurbha

Digital supply chainDigital supply chain is the “in” thing! Don’t take my word for it, though. Just google the term. You will come across many articles talking about how supply chains are being remade by industry 4.0, internet of things (IoT), 3D printing, big data analytics, cloud computing and so on. But what most of these articles focus on are the means rather than the ends for the digital supply chain. On a day-to-day basis I speak to a number of supply chain practitioners. Most of them tell me they are at some stage of evolution with their digitization strategy. However, much confusion exists in terms of what constitutes a digital supply chain. So, I decided to write this blog to share my point of view on the topic.

Supply chain digitization is not simply taking existing information and capturing it in a digital format. It is not about automating your existing SCM processes. It is not about layering in Sales & Operations Planning (S&OP) as a band aid to connect disjointed processes. It is about having the most current information to run your supply chain effectively, available on demand, so you can service your customers and grow profitably. In other words, think of a Google search for supply chain. You ask questions and you get answers!

Here, I will introduce 6 design principles that make up a digital supply chain. I will lean on the example of Uber, how it digitized the taxi experience, and draw parallels to digital supply chain. Let us take a look at these design principles:

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Is S&OP an expensive band aid?

Dr. MadhavDurbha

S&OPI love talking to customers and prospects! Each of these interactions provide me with an opportunity to meet someone new, learn about their business, their challenges, dreams, and aspirations. The topic that often comes up in these conversations is Sales & Operations Planning (S&OP). While S&OP as a discipline has been around for over two decades, it has been generating great interest recently. As much interest as it has generated, based on my conversations, the results from S&OP efforts have been mixed at best. From time to time, I hear comments such as:

  • “My monthly S&OP process takes 6 weeks to execute”
  • “We have this massive excel sheet into which we load all our S&OP data to generate the reports for review. The process to gather the data is time consuming and by the time we present our S&OP to our leadership, the world has moved on and our plans are no longer valid”
  • “We started S&OP as our COO insisted we do it. It is turning out to be a report to him, rather than a tool to run our business”

In fact, this has been such a recurring theme that I decided to share my point of view in this blog. Let me elaborate on what I believe are the reasons behind this disillusionment.

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Rocky Balboa and the Bimodal Supply Chain

Dr. MadhavDurbha

Bimodal supply chainI recently watched this very inspiring documentary From Rocky to Creed: The Legacy Continues, featuring Sylvester Stallone and his costars, sharing their journey through the Rocky movie franchise. For those of you not familiar with Rocky, he is the fictional, perennial underdog boxer who won some very memorable boxing matches with odds heavily stacked against him.

The franchise started with the Oscar winning Rocky in 1976. After Rocky V was released in 1990, Stallone decided to finish the series with Rocky Balboa in 2006. The movie was a treat to all diehard Rocky fans. However, the 60+ year old, out of shape, arthritic Rocky working his way to tackle the then young heavy weight champion Mason “Line” Dixon was bit of a stretch. I thought that was the last I saw of Rocky. Then came the movie Creed in 2015, launching the character of Adonis Creed, son of the most flamboyant, very likeable, champion boxer Apollo Creed from the original Rocky series.

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State of the Pharmaceutical Supply Chain: Key Takeaways from LogiPharma US 2016

Dr. MadhavDurbha

Pharmaceutical Supply ChainPart of what makes my job very exciting is attending conferences. These events provide great opportunities to share, learn, network, and have fun. Earlier this week, I attended the LogiPharma conference, a wonderful event for supply chain professionals working in the pharmaceutical industry. Apart from taking part in numerous interactive presentations and roundtables, I had the opportunity to host a luncheon alongside my colleague, Bill Dubois, for a packed room of pharmaceutical industry executives and SCM practitioners.

All-in-all, it was a great validation of my point of view about where the pharma industry is with regards to its supply chain challenges, maturity and where it needs to go. In this blog, I want to share some key challenges faced by the pharma industry and pharmaceutical supply chains. And, in a future blog I will share some recommendations in light of these challenges:

1. Revenue pressures: With several blockbuster drug patents expiring (a.k.a. “patent cliff”) and with patent extensions harder to come by, large pharma companies are looking for opportunities to unlock additional value within their enterprises and across the value network as revenues remain under pressure.

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Supply Chain Risk Management in the Spotlight: Lessons from Hanjin Shipping’s bankruptcy

Dr. MadhavDurbha

Supply chain risk management in the spotlight

Supply Chain Risk ManagementA few days ago, the world’s seventh largest container shipping company by volume, Hanjin Shipping, filed for bankruptcy protection. A lot of the products being shipped by Hanjin are headed to U.S. and European retailers (toys, electronics, clothing, furniture, etc) getting ready for the holiday season. However, many ports are not allowing these ships to dock due to the risk of creditors seizing the ships, and any such event will cause congestion in the ports.

According to sources, Stevedores are demanding advance payment in cash. As Hanjin is fighting to prevent seizure by creditors, several ships remain marooned in the sea. A contact of mine with firsthand knowledge of the matter commented that it is a nightmare to claim containers from a bankrupt shipper. In short, it is a mess!

Such risks are on the rise. Companies are spending more on outsourced products and services than in the past. There is a constant push to free up working capital by leaning down on the inventories. Lead times are in weeks and months in cases where manufacturing is outsourced to firms on the other side of the earth. Linear supply chains as we know them are turning into supply networks with more players and parties than ever before. To understand the geopolitical risks, all you need to do is to turn on network news. Given all this, one would think that supply chain risk management is more prominent now. However, a 2014 report by University of Tennessee on managing risk in global supply chains points out that 90% of the firms surveyed do not quantify risk when outsourcing production!

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4 Ways Supply Chain Management Has a Higher Purpose

Dr. MadhavDurbha

The Higher Purpose of Supply Chain Management

Supply Chain ManagementMy wife’s phone rang as we were driving home from the restaurant. I turned off the music and the kids had gone quiet as she answered the phone. It was a distraught mother at the other end of the line. She was nervous and was calling about her toddler’s fever that would not go down. My wife talked to her in a calm voice, told her what she needs to do for the night to keep the fever under control, and advised the mother to bring her toddler to the clinic the next morning. With her nervousness abating, the mother profusely thanked her and hung up. As a parent of young children myself, I can very much appreciate the difference a physician, like my wife, makes in the community.

As we reached home, I retired into my study and picked up the Ken Follett thriller where I left off. I was trying to read, but the thought kept running through my head. Yes, both my wife and I are career-minded professionals. We both are in our professions to be successful, make money, and enjoy the pleasures that life has to offer. But is there a higher purpose to what we do?

There certainly is a higher purpose to what my wife is doing. One wellness visit, one infection cured, one disease diagnosed at a time, she is making a difference. The results are very tangible. But what about supply chain management professionals like me? Is there a higher purpose to what we do as executives, consultants, planners, or technology providers? As I pondered upon this topic, the answer turned out to be a resounding yes. Here are few examples of how supply chain management professionals make a difference in the world:

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