Archive for the ‘Response Management’ Category

Often when I am asked to describe the difference between planning and response I use the analogy of going on vacation.  I think the analogy best captures the benefits of planning – cost reduction, work place coverage planning – with spontaneity – waking up and deciding whether to sail or swim, stay in bed or watch the sun rise.  There are also negatives to planning and response that can be applied to vacations.  Planning far ahead to get the cheapest deals could mean that some natural or economic disaster ruins your plans – earthquake in Haiti, oil spill in the Gulf of Mexico, hurricane in xxx.  On the other hand, waiting until the last moment may mean that you can’t find the best deals to get to where you would like to be ideally.  But I have friends who love the serendipity of letting the “fates” decide.  To them this is a lot of the enjoyment of going on vacation, but having a double income and no kids, they can afford to be “spontaneous”.  We have the constraints of 2 university aged kids – sorry, young adults – and another in high school, 1 dog, and 1 cat.  And I have a German wife.  Believe me, going on vacation requires a lot of planning.

So what’s this got to do with supply chain management?  Well, I think a lot.  But I will expand on this later.  Let me first continue with the planning/response duality, and the effect technology has had over the past 20-30 years on one’s ability to be more responsive.

Our 2nd son has gone to Europe for some weeks in the summer.  I was equally fortunate after high school to get a trip to Europe, but that was in 1973.  The available technologies were very different…

                                              His base is an apartment in the south of France and he will be travelling to Turin, Venice, Rome, Paris, Frankfurt, Prague, and Munich.  Lucky guy, huh?!  As you can imagine, this trip has been in the planning stage since before Jan 2010.  Not only does he have an anxious father, he has a German mother, so meticulous planning was required.  This included searching for concerts/events across Europe on the internet and then booking Eurail tickets to get to the different destinations.  And finding youth hostels over the over the internet and pre-booking accommodation.  I, on the other hand, had a well thumbed paper copy of a “Europe on the cheap” guide.  Whenever I got to a new location, the first thing I had to do was to find a youth hostel for the night.  And believe me, English was far less prevalent in 1973.  So a lot of the planning and coordination which we did in 2010 that simply not possible in 1973.

Guess what?  He left the key to the France apartment at home!

He called in a panic from Zurich at 1:30am (parents not amused) using his cell phone.  We were able to find a hotel near the apartment using the internet and to book him a room for a few nights.  When I was travelling, I guess I could have sent my parents a telegram, but that would have only reached them later in the day, long after I would have had to try to sort something out for myself. 

And he has his own credit card.  I had to carry around a thick wad of traveller’s cheques and go to a bank – which were only open Mon-Fri from 10:00am to 3:00pm.  Actually, on Wednesday they closed at 12:00. 

Once he had checked into the hotel, he sent us an email to say that he was well settled, which we had in our inbox’s once we woke up again.

To get the key to him we went on-line to find the quickest (and cheapest) over-night service, and then emailed the concierge with the tracking number and expected delivery date and time.  He now has the key and hopefully the rest of his trip will be filled with as much adventure, but from positive experiences.

The key here is that we take technologies that are available to us for granted.  We forget how these technologies have changed the manner in which we can conduct business, and all too often the manner in which we use technologies in business lags the capabilities available to us.  So I smile when I hear people state that technology has no role in S&OP.  No business process is about the technology, but imagine if we did not use even a rudimentary technology such as EDI?  What about the ubiquitous use of Excel?  Let me tell you that in 1973 we were still using paper punch cards to submit a job to a data center.  The job queue was usually a few hours and when you came back you would discover that you had typed an S instead of a D, meaning the whole job had failed.

As my story about my son’s trip illustrated, technology has allowed us to shrink the time it takes to reach a decision and to include others in the process of compromise required to reach this consensus.  Not only that, we have mechanisms to know much sooner that an issue has occurred, which is of tremendous value.  The sooner you know about something happening and the quicker you can respond, the more likely you will be able to affect the course of events and reduce the risks or take maximum advantage.

This is a follow-up to my post from a few weeks ago: Expediting versus Planning.  I received many comments and recommendations on this subject as to whether much of the expediting that occurs is in fact related to planning deficiencies.   After reading and reflecting on the comments I received, it seems to me that the premise that effective planning by itself will reduce the need to expedite is not necessarily true.  Obviously, effective planning is critical to reduce expediting.  Without a good plan, then what do we execute?  However, no matter how good plan is, it will always change.  Forecasts by definition are not accurate.  As we all know, changes and disruptions can occur in an almost infinite number of ways throughout the supply chain.  The best plan will always be out of date almost immediately after it is published.  (Just to be clear, when I say plan, I am referring to the MRP plan.)

Given the assumption that a plan is crucial, together with the realization that the plan will not be accurate, we are led to the conclusion that we need a stable plan, but be able to adjust the plan as and when needed. We need to be able to adjust the plan only when significant enough factors warrant a change to the plan, and with enough lead time and stakeholder buy-in to execute properly.  To restate, I believe that the following are important:

1. Plan Accuracy and Stability – The MRP plan needs to be stable enough to enable effective execution but we need to be able to detect exceptions that are significant enough to warrant a change
2. Responding to Change – The capability to effectively respond to required changes needs to be in place

How do we effectively accomplish the above?

Plan Accuracy and Stability

• First, the plan needs to start with an effective Sales and Operations (S&OP) process.  The more robust the S&OP process, the better that the high level plan will be.   
• We need to be able to detect or sense the need for changes, and once needed changes are detected, we need to be able to discern which are significant enough to warrant a change to the plan. 
• We also need to be able to prioritize these since there may be more than we can deal with. 

The key is that potential problems such as material shortages and late customer orders need to be detected for the future.  Obviously, once late orders or shortages have occurred, they are easy to detect (maybe even by way of angry calls from customers or buyers getting urgent messages from production regarding shortages.)

Referencing a recent blog post by Kerry Zuber, “Driving performance improvement through exception management“, Kerry states that in some organizations, there can be as many as 30,000 action messages generated by an MRP regeneration.  This exemplifies the complexity of the MRP plan and sheer volumne of exceptions in many organizations.  The organization cannot work all of these recommended actions, but which ones are the right ones to work?  Which ones signal that something in the higher level plan needs to be adjusted?  A second level, automated process needs to be in place in this type of environment to prioritize actions and also alert the responsible parties. 

The capability is required to detect what future demand will be late due to the mis-alignment of supply schedules,  issues with capacity in the supply chain and other issues.  If the future state/impact cannot be detected, then adjustments or contingencies cannot be put in place to avoid or mitigate them.  And as mentioned, we also need to be able to determine which of the detected changes require action and by who.

Responding To Change

Once changes are detected, we need a process to effectively implement these changes. This involves two key process and system capabilities:  simulation and collaboration.

We need to be able to simulate what-if scenarios to determine how best to deal with the change.  For example, it is difficult to calculate what the impact of a supplier changing commitments on a PO schedule will be in many environments without being able to simulate what that change in the commitment does to the overall plan.  In developing a response to the change, we need to be able to simulate multiple action alternatives and assess how well they will solve the problem and also whether they are achievable.

These simulations cannot be done in a silo.  Any significant change needs to be collaborated on with the extended supply chain.  Collaboration is certainly required with other internal organizations and potentially with affected external suppliers.

I realize that the above is very high level and probably over simplified, but I believe the general concepts are necessary in a complex manufacturing environment to optimize planning.  Without an optimized plan, execution cannot be effectively and efficiently accomplished and we have to resort to a lot of brute force exercises, including expediting.  Even the best of plans needs to be monitored for required adjustments and we need to have effective processes and systems in place for responding to these changes.

Has your organization implemented a process for responding to change?

There has been much written about Iceland’s Eyjafjallajökull volcano. It certainly has had a significant impact on the global supply chain. One would need a very good crystal ball to predict this unplanned event, but it certainly exposes the vulnerability of distributed networks.

Here’s the big question:  Will companies think differently after suffering the consequences of this natural disaster?  What will they do different?

I don’t think the answer is building more just in case inventory. In order to stay competitive supply chains have to be lean. (In fact, they are becoming even leaner with late stage postponement to satisfy increasing levels of customization on consumer goods.)

Here are some questions for consideration:

1. Can you proactively analyze and understand the risk of unplanned events?  This may be the upside or downside in demand or supply disruptions. This also includes the identification of sole sourced material.
2. Do you have the visibility and access to information in your supply network that you need? More and more companies are looking for a global view of all of their inventory with the need to rebalance as the demand and supply fluctuate
3. Do you know what to do when you have a problem that you just can’t solve?  When a volcano happens there is not much you can do about it. The question is are you making the best use of the supply that you have? How do you want to prioritize demand and allocate your supply? How quickly are you able to make these decisions?

While there may never be another volcano that disrupts the supply chain, there are daily disruptions that affect companies every day, and that taken in sum can have a material impact to the business. How do you deal with them?  Send in your stories!

Tom Wailgum over at CIO.com wrote a blog titled “Supply Chain Data: Real-Time Speed Is Seductive and Dangerous” in which he quotes from an Aberdeen report by Nari Viswanathan and Viktoriya Sadlovska.  Tom writes about the adoption of real-time data that “Before any company hits the accelerator, it would be wise to ensure that the existing and new supply chain data is sound: Bad data delivered that much faster is still bad data—and can lead to worse decision-making.”  I agree with nearly everything Tom writes, but I don’t buy into this quest for data nirvana.

Let us look outside of supply chain for examples where the data quality is good enough to make sensible decisions.  We know that child mortality is higher in poor countries than in rich countries.  The UNICEF mission is “To reduce child mortality by two-thirds, from 93 children of every 1,000 dying before age five in 1990 to 31 of every 1,000 in 2015.”  I’m good with the first part of the UNICEF mission (reduce child mortality by two-thirds) and will continue to donate to them on this basis.  It’s the second part that confuses me.  Does is really matter that in poor countries child mortality is 93 per 1000 births or 100 per 1000 births?  I would just go with “more than 90 per 1000 births”.  I just don’t see how the precision of the statistics improves the quality of UNICEF’s decisions.  And I think too often we confuse the 2 issues of quality of decision and quality of data.

Before I am misunderstood, let me state quite clearly that data quality can always be improved.  There is no question in my mind that all enterprises should have “data police” that ensure that the data is of reasonably good quality.  But let’s all recognize that data quality is like a sales forecast.  We all need to get better at it, but we will NEVER get it absolutely right, as in complete, correct, and there when we need it.  What we want to avoid is getting it absolutely wrong.

In addition, I think that data latency is a key element of data quality. So I don’t agree with Tom Wailgum. The speed with which you receive data is a big part of its quality. I would much rather have partially correct data quickly than precise data slowly. One of the most important insights that can be gained from data is trend. Trend is often more important than the actual value, and trend is totally absent from Tom Wailgum’s discussion. In other words, data should have 3 major measures of quality:

• Completeness
• Correctness
• Timeliness

In case we forget, people are operating supply chains right now with the quality of the data they have right now. They are making multi-million dollar decisions in the long term based upon the current data. They are making 1000’s of decisions on a daily basis – expedite this PO, cancel that PO, promise this date to a customer, … – based upon the current data.  In many cases they are using paper and pencils and gut-instinct to make these decisions, and more often than not they are the right decisions. Maybe not precisely correct, but still correct. I am sure many of you have horror stories of when bad decisions were made using bad data. I am equally sure that you have horror stories of bad decisions have been made on good data.  And, by the way, I am sure you have many stories of good decisions having been made on bad data.  Above all, I am sure that many of your horror stories will revolve around having known about something too late, and many of your good stories will revolve around having known about something quickly.  The value of knowing sooner is the central lesson to be learned from the famous Beer Game that illustrates the Bull-Whip Effect.

Also, let us not confuse the quality of the decision with the quality of the data. In other words, the decision might be directionally correct without being precise, and infinitely better than doing nothing. For example, it may be correct to split a purchase order (PO) for 1000 units and expedite part of the quantity in order to meet unexpected customer demand. We may chose to expedite 500 when it would have been better to expedite 600, but expediting 500 would be a lot better than not expediting any of the PO.  The decision to split the order and expedite part of it is 100% correct.  The quality of the data may mean the difference between expediting 500 and not 600.  I can accept that imprecision better than the inaction caused by waiting for “better” data before making a decision.

Naturally, we all want to avoid the situation where it would have been better not to split the order, but because of poor data quality a decision is made to split the order. In general I think the quality of supply chain data is a lot better than that.  The reason to have “data police” is that of course no-one knows which incorrect data will lead to disastrous decisions.

If the current data says “go North East” that is good enough for me. Leave it to the “accountants” to decide to “go 47 degrees 28 seconds”, especially if it takes 2 minutes to decide to “go North East” and 2 days to decide to “go 47 degrees 28 seconds”.  By the time the “accountants” have reached their conclusion, the entire demand and supply picture will have changed anyway.

In closing, I think we should all take a word of advice from Warren Buffet when he wrote in the Washington Post that “… it is better to be approximately right than precisely wrong.” I argue that most of the time waiting for precise data is precisely wrong, and that acting quickly based upon the existing data is approximately right.

About a month ago, someone in my family had to have a Wii Fit.  We already had the Wii console so just needed the Wii fit add on.  I thought OK, I will just check where I can pick one up or maybe order it on-line.  Looking at all the standard places I would normally buy something like a Wii Fit here in the US (Walmart, Best Buy, Target etc.), I found that everywhere I looked it was out of stock, both in the local stores and on-line.  I ended up having to order it at a significant premium price from a distributor who was fortunate or smart enough to accurately speculate on the high demand versus short supply of this product.  Obviously, there was advance information in the market that this product was going to be in short supply.

I do not know what the details are around the supply of this product, whether the forecast was low or manufacturing capacity was just not there, or if it was just a distribution issue, but it got me thinking about what can be done by OEMs to mitigate this type of situation.  The situation being that at some point, the forecasted demand was a lot different than the actual demand.  As I was taught years ago, the first rule of forecast is that they are always wrong.  My conclusion is that since the forecast is always wrong, the solution has to be in quickly responding to the changes or variances between the forecast and the actual demand.

I recommend you read the short white paper “Are Yesterday’s Solutions Conflicting with Today’s Challenges?”, by Charlie Barnhart when he was with Technology Forecasters.  While the paper was written a bit ago, the premise remains very true. In this paper, Charlie describes a response management approach to dealing with change (such as variations between forecasted demand and actual demand) especially in an outsourced manufacturing environment and given shrinking product life cycles and rapidly shifting customer preferences.  Also, some interesting points are raised in the white paper as to why increasing inventory is not a viable solution.  As stated in the paper,

“Response Management provides organizations the ability to rapidly test and score options for responding to change by identifying what’s possible today with today’s resources”.

What are your thoughts?  Do you have any insight into this particular supply issue with the Wii Fit or similar ones?  Do you feel that the response management approach described in the white paper can effectively mitigate forecast errors?

I came across a great blog post by Atul Chandra Pandey from Infosys titled “Y2010 & Ahead – value chain trends in emerging economy” in which Atul emphasized the following trends in the first part of a 2-part series:

• Customer side equations will take prominence over rest of value chain
• Supply chains will get more integrated with marketing and service chains
• Speed and responsiveness will be key drivers for spend on new initiatives
• Cost will continue to play critical role in decision making
• Asset Management will gain more prominence and will help in accelerating “green” initiatives

I responded to Atul in the following manner:

We too are experiencing that prospects and customers are focusing a lot more attention on customer satisfaction as it pertains to on-time delivery of orders, but also to the enquiry-to quote and quote-to-order processes.

I couldn’t agree more with your third point about speed and responsiveness. Overall the trend we are observing is that consumer behaviour is pervading B2B transactions with ever shorter lead times. Coupled with the adoption of Lean and postponement strategies, companies have to be very responsive to changing demand, blurring the lines between planning and execution. These are the business drivers for your third point about agility and responsiveness.

Cost will always be a driver in supply chain management. If we adopt any of the Lean concepts it should be the elimination of waste. All too often I come across situations where the information and decision lead time exceeds the physical lead time to manufacture and/or deliver the order.

But this got me thinking about several other reports and observations that have come across my desk over the past 12 months. 

First and foremost must be the article by Dan Gilmore at Supply Chain Digest highlighting the work done by Supply Chain Digest’s research arm CSCO (Chief Supply Chain Officer) Insights.  There is an excellent report titled ”Next Generation Supply Chain Management: Integrating Planning and Execution” available from this link. (Subscription required).  In the article, Dan Gilmore observes that “For many years, analysts and others have offered separate models of ‘supply chain planning’ and ‘supply chain execution’ processes, and the technology vendors were generally organized in that sense as well. You can find many diagrams that show hierarchical planning processes with no connection at all to execution, for example. The report argues, and the research supports, that this gap must be closed from a process perspective to meet the challenges of today’s supply chains.” I added the bolding because this is the key to being able to provide the speed and responsiveness to which Atul at Infosys refers.  Not only that, but also managing to contain if not reduce supply chain costs will depend on being able to reduce this gap between planning and execution.   

Traditionally we have used inventory to buffer against what we would like to happen (the plan) and what actually happens (execution).  But this is no longer possible.  As the graphic below illustrates, as long ago as 2004 postpone strategies had pushed much of the inventory up the supply chain to the suppliers.  They too have adopted Lean and postponement strategies, leading to even lower inventories.  And then there is the effect of the recent recession.  Nearly all the OEM’s I speak to are struggling to secure supply of components, clearly indicating reduced inventory levels in the suppliers. I wish I had equivalent inventory figures for 2009.  Anyone willing to provide these figures?

Then there is the excellent blog written by Lora Cecere recently titled “Tackling the Black Hole in the Center of Your Supply Chain” in which she states “We now know that fixed data integration, one-dimensional rules mapping, and traditional master data techniques from ERP to Supply Chain Optimization are insufficient.  As a result, plans are created and consumed in isolation, and transactional systems hum along with little– to no — guided intelligence.”  So as the speed of business has increased – some would describe this as volatility – the supply chain systems have not kept up. 

And most of the information is now external to your organization.  Companies have being trying desperately to get point-of-sale information to get early trend analysis of sales.  At the same time, many brand owners have largely outsourced manufacturing, not only lengthening the physical supply of goods, but also the time and effort it takes to make a decision.  All of these factors are only making the gaps between planning and execution even wider.  But the business need is to close this gap; to respond to demand changes quickly and effectively.  As Lora Cecere, states, the solutions from the 1990’s have not kept pace with the business needs.  Throwing more ERP at the problem isn’t the solution.  At their heart, all ERP systems are essentially accounting packages.  They deal with your data – financial and operational – but provide very little help in dealing with the majority of the information, which now exists outside of your organization.

What are your thoughts?  Do you experience this gap?  Are your systems able to cope.  Will your next breakthrough in performance come from learning to plan better, or learning to respond to plan variance?  In other words, closing this gap between planning and execution.  Robust debate encouraged.

Our expectations as consumers are changing.  When I was a growing up (I won’t comment on how long ago that was!) we expected to have to wait for things (“It’s in the mail!”).   As the technology evolves, the time it takes to do things, and the time we are willing to wait to do things has changed significantly (how do you feel when the company you are dealing with wants you to mail or FAX information to them?).  Let’s look at some examples;

Mail – Before the 1980’s the only option for sending written communications was to write a letter and send it via the post office.   Typically, you could send a letter and depending on how far it had to go, you could expect the recipient to get it in days, maybe weeks for long distances.  In the 1980’s, the fax machine became a popular way of sending written correspondence.  A fax could be sent and responded to instantly; however, in most cases, you had to go to wherever the fax machine was to pick up your fax.  In the 90’s, e-mail became the standard and you could receive your message at your desk seconds after it was sent.  Today, with Blackberry’s and iPhones, messages can be sent and received at any time of the day and night anywhere (almost) in the world.

Banking – Before the advent of bank machines, people used to need to stand in line to see a bank teller to access money in their account.   You needed to get to the bank  when they were open and make sure you took out enough money to cover your needs.  Banking took hours and forget about getting cash on the weekend! With the move to bank machines, you could do most transactions using the cash machine and could do those transactions any time you needed to.  Today, you can bank from your smart-phone, pay for items using a smart-card and even apply for loans over the internet.

Music – If I heard a song on the radio and wanted to listen to that song, I’d have to drive to the record store and get the album. If I was really anxious to get a song, I could get it within a few hours. With the advent of iTunes, I could download the song, move it to my iPod and listen to it in minutes.  Today, I can download a song directly to my iPod touch or iPhone and listen to it immediately.

ERP – Before ERP systems we managed things by paper.  Responding to changes took days, sometimes weeks.  In the 70s, ERP systems became popular, but the systems were expensive, large and cumbersome, and very difficult to maintain.  Responding to changes took days, sometimes weeks.  Today…hmmm…let’s see…well, they’re still expensive, they’re still large and cumbersome, they are still very difficult to maintain.  And responding to change takes days, sometimes weeks.   So…where are the advances in ERP???

Well, maybe our expectations of ERP systems haven’t changed.  Maybe my customer is happy to wait for days or weeks for me to respond, right?  Not likely!  Our customers want responses now. They NEED responses now because THIER customers are demanding a response from THEM!

ERP Systems aren’t the answer.  They do what they do…provide a plan and track transactions.  If you look at each of the examples above, the key changes were not evolutions, they were revolutions within their industry.  We don’t have mail carriers capable of instantly delivering mail (even superman couldn’t do that!), we have completely different technology.  ERP systems won’t evolve into something fast enough to meet our needs.  We need a completely revolutionary technology.  We need a response management system. 

So…why wait?

I am putting the final touches on my presentation for SCM World Live on February 24th – a free virtual event for cross-industry global supply chain executives.   SCM World Live is bringing together an impressive group of global supply chain, operations and procurement industry leaders in an interactive format.  There will 20+ speakers participating in the day.

I have the great privilege to present alongside Dr. Hau Lee of Stanford on a topic that I am particularly passionate about:  Matching Supply and Demand with ‘Sensible Sense and Responsive Response’

It’s a timely discussion aimed at answering questions like:

• How can we correctly interpret demand signals and make sense of them smartly?
• How can we enable the entire supply chain to react accurately and quickly?
• What are the key elements of agility?
• What value does responsiveness offer to the organization?

I recognize that there are individuals who might still believe they can plan their way out of a volatile or chaotic supply chain. It is my hope that this presentation will serve to highlight the new innovations in process and technology that make response management a far more potent cure for companies living with supply chain pain.

Find out all the details here.  Why wait? Register today!

As an integration consultant, I have worked with a variety of manufacturers implementing supply chain planning and response management applications.  What I have noticed is that at many of the manufacturers, not all, there are many past due purchase order (PO) schedules in their ERP system. 

Obviously, when a PO schedule is past due, it cannot be determined when that scheduled supply will be available to support production.  In many cases, revised delivery commitments from suppliers are maintained outside of the formal ERP system, such as Excel worksheets or supplier portals.  A variety of reasons exist for not updating these past due PO schedules in the ERP system:  too much time required for updating; suppliers need to be measured against the original schedules for metrics, to name a few.  The paradox is that the cost and potential lost revenue of not being able to effectively plan or respond to demand and supply changes likely greatly exceeds the cost of managing the late PO schedules in the formal ERP system.  However, given the fact that these past due PO schedules exist leads me to believe that implementing a process, or just the simple discipline, to update these to the actual expected delivery dates is just too difficult. 

It seems that there are at least several options to fix the problem. 

One option is to build an interface from the supplier portal if it exists, or if one does not already exist, implement a supplier portal with an interface to the formal ERP system to get the latest supplier delivery commitments.  This option could be very costly and also take some considerable time to implement.  Another option is to simply start maintaining the late PO schedules in the formal ERP system.  This could be accomplished by instilling the discipline and the process within the organization to do this.  Part of the process would have to include a reporting and tracking mechanism to alert buyers of past due PO schedules and also track the progress at working them down.  Although there may be barriers to updating the formal PO schedules, this option could leverage a response management system that can send automated alerts to buyers or planners and track the progress at reducing past due PO schedules. 

To me, the preferred option is to leverage a response management or supply chain management system and import the supplier commitments from wherever they exist, whether it be Excel worksheets, a supplier portal or some other application outside of the formal ERP system.  This provides a capability to evaluate the current planning with realistic supplier delivery dates and to simulate changes to determine the best response to change.  This last option also minimizes the manual effort of updating PO schedules.

Do you have past due PO schedules in your ERP system?  If so, is there a compelling reason not to fix them?

I was just reading a draft of David Oppenheim’s (a Kinaxis consultant) new white paper (we’ll announce availability and provide a link when it’s published on this blog) and there was one line that jumped off the page and caught my attention.  David wrote, “we know that change is the only constant, and yet our processes treat change as the exception instead of the rule.”

I think this is at the heart of many of the challenges that manufacturers face today.  Think about it this way – most supply chain professionals grew up in an era where there was less global competition, less outsourcing and less volatility.  Product lifecyles were shorter and customers were less demanding.  These are obviously all relative statements, but when I talk to people across manufacturing industries, there seems to be broad concensus that we live in more challenging, complex and volatile times.  Because of this heritage, most business processes, and the tools to support them, were designed for this type of environment.  That is, they were optimized around the notion that if you built a solid plan and were good at executing that plan, you’d win.

But as David accurately points out, today more than ever, change is the only constant.  Despite this reality, most organizations haven’t adapted to this new reality.  Why?  Because that’s the way we’ve always done things.

Ask yourself this.  Does your organization think first about how to manage things when they go according to plan (which quite frankly is the easy part)  or first about how to manage things when they don’t go according to plan?  My experience is, as David points out, it’s usually the former.  And, there’s the disconnect.  Today’s environment is dominated by dealing with exceptions, yet supply chain processes are still optimized for a largely exception-free world.