What does your planning organization look like? Is it a series of silos? Individual fiefdoms throwing requirements back and forth over the wall? What are they spending their time doing? Are they drudging through the tedious work of placing orders with suppliers? Releasing orders to the factory? How much time are the spending truly adding value to the supply chain and how much time are they spending doing simple, mechanical, yet important activities?
Accenture has just released a white paper titled “Supply chain for a new age” which you can get here. In this paper, the author describes various components of the next generation supply chain and introduces the role of “Network Planners”.
A network planner would have ultimate responsibility for supply chain performance and would oversee all aspects of the supply chain from demand and distribution to detailed component supply for a group of products (a family or region or both).
As you can imagine, traditional supply chain tools and processes would quickly overwhelm any normal human, if they were to try to manage all aspects of the supply chain even for a relatively small set of items. If the network planner is to be realized, as Accenture points out, we need to have a way of automating the basic tasks and allowing the planner to focus on making key decisions and managing the significant exceptions.
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“Long time bud! Hope all is well” … It was great to hear Tim’s voice after all these years. Tim started his career in supply chain management along with me. After about a decade, he took a different path and branched off from SCM. Thanks to Facebook and Linkedin, we stayed in touch but haven’t talked to each other in a while. But now, out of the blue, he calls me as I was driving home. After exchanging pleasantries, Tim said he is considering pivoting back into supply chain and wanted my opinion on if the timing is right. I told him the timing cannot be any better and gave him my reasons as follows:
1. New supply chain challenges creating new opportunities: Fundamental shifts in technology are remaking supply chains as we know them, bringing together the digital and physical worlds. Here are some examples:
a) 3-D printing is shifting manufacturing to the point of consumption
b) Drone technologies and driverless cars/trucks are expected to revolutionize logistics as we know them. Transportation speeds like never imagined before (think Hyperloop) will be feasible in our lifetime and will shrink lead times significantly
c) Internet of Things (IoT) is enabling proactive asset monitoring and risk mitigation along with precise inventory location tracking
d) Voice and Image recognition, Augmented Reality are reshaping warehouses and Stores as we know them
While this is happening, the business environment is getting more complex and volatile due to rising omnichannel shopping, increasing SKU counts to meet the needs of empowered consumers, dynamic pricing, and personalized promotions, and not to mention geopolitical uncertainties. This is creating an environment wherein the profile of supply chain professionals is rising as boards and CEOs realize that supply chain is a core strategic asset to meet these challenges and supply chain risk management is a must. Chief Supply Chain Officer is now an executive position in more and more organizations.
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In 2013, global aid organization Oxfam launched the Behind the Brands campaign, aimed at driving awareness about the sustainability practices of some of the world’s largest and most well-known consumer companies. Amplifying the voices of key stakeholders like farmers, consumers, and investors, the campaign called on big brands to take action to improve social and environmental standards in their supply chains.
Three years later and some of these ‘Big 10’ food and beverage companies have made significant progress, as indicated in the changes to Oxfam’s scorecard ranking, but now the push is on to ensure their suppliers actually implement these promises.
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Here in Canada, major highways are getting new electronic signs that provide warnings to motorists about upcoming road hazards. One foggy morning, I drove by a sign that declared “REDUCE SPEED – LIMITED VISIBILITY”. Sure enough, the fog was so thick in some places that I needed to drive much slower – I couldn’t see anything beyond my own hood. When you think about it, many supply chain companies operate with the same visibility. They can see things happening within their company, but they have no visibility to what’s happening outside the four walls. Unfortunately for them, the pressures of business means that they have to operate at “normal” speeds otherwise they will lose business.
A few months ago, Kinaxis published an infographic titled Supply Chain Visibility: Seeing is Achieving. It focused on why supply chain practitioners need to have better visibility to do their jobs. I won’t go into details on the infographic except to say that it’s worth reviewing. I did want to add some of my own thoughts about why visibility is so important and why today’s traditional ERP systems are doing such a bad job at providing that visibility.
First let’s talk about what supply chain visibility means. If you can imagine the typical supply chain, you would expect it to be comprised of customers, suppliers, and potentially one or more levels of integrated manufacturing facilities. Imagine an environment where your customer could request a demand change and within seconds, you could see the impact of that change on your entire supply chain…including any plant that contributes to the manufacturing of that item or any supplier that provides components. You could assess impacts to inventory, margin, cost of sales, new purchases, capacity…all within seconds, all within a single system. How would that knowledge affect your ability to confidently accept that new order?
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I remember while traveling last fall getting that dreaded alert we all hate see on our iPhones. “Flight Delayed” is how the first few words of the text message read. While travelers running late and those hoping to get free vouchers on overbook flights cheered, I went into a mode of figuring out quickly what the best course of action was for me to ensure I got where I needed to be.
I was traveling from Northwest Arkansas airport (XNA) back home to Washington Reagan (DCA) and this alert put me into panic mode because I had to be at my home office for an important customer call the following day and knew there were limited flights available. My original plan had been to leave XNA in the afternoon, connect in Chicago, and arrive back at DCA in the late evening. Now, I had to figure out how to still make that possible.
On my phone, I was able to open up the airline app to determine where all inbound airplanes were and whether they were on time. By tapping on flight statuses between my source and destination locations, I looked for other flight paths with different connecting cities to see if I had any alternatives. I was even able to view seat capacity to see if it was even feasible for me to get on those flights.
I was able to look at any available hotels in the connecting cities in case I got stuck somewhere overnight and needed to take my customer call in the morning in that location before flying home. And best of all, I was able to quickly gauge pricing of all of those alternatives as I went through them. After about eight minutes of evaluating multiple scenarios, I was able to choose the best plan. Since that experience, I find myself always looking at my flights and inbound aircraft so I can know sooner if there is a potential issue with my plans. Luckily, I’ve gone a long time without any major delays (although I’m pretty sure I just jinxed myself with that statement!).
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Velocity. Speed. Quickness. In speaking with customers, I’ve heard a lot about how critical speed is in maximizing efficiency, agility, and profitability. I’ve heard how having the ability to know sooner and act faster in relation to opportunities and risks can make life a whole lot easier when it comes to supply chain management. And it’s abundantly clear that it does. All of the articles I’ve read and the examples I’ve come across have been focused on using speed to propel you toward success. But what about using it to take you full steam ahead toward failure?
To me it first seemed like a bit of a backward concept—until I learned to look at failure as just another form of victory in disguise. I went from asking myself why anyone would want to fail, to actually looking forward to my next mistake! And much to my surprise, what helped me come to this realization was hearing several prominent figures speaking about the failures they’ve experienced in their businesses and with their supply chains at the Gartner Supply Chain Executive Conference.
Chris Tyas, Senior Vice President Global Head of Supply Chain from Nestle, gave a keynote on Supply Chain Innovation & Excellence: Engaging 36,000 Supply Chain Brains Across the World. While the focus was much more on crowdsourcing knowledge and ideas from within your own employee base, he did provide an example of supply chain failure. He mentioned the horse meat scandal from a few years ago, where several big businesses were found to have contaminated food products. Nestle originally came out saying there was no way they were involved—based on the fact their top tier suppliers weren’t implicated. Three days later, they had to retract that statement. A supplier much further along the chain, one they had no knowledge of, was using horsemeat in producing one of Nestle’s products.
What Tyas learned from that mistake was the importance of end-to-end visibility. What I learned was the importance of discovering your mistakes quickly—and then taking ownership of them. As soon as Nestle uncovered the problem, they took immediate action to correct the issue, from a public relations standpoint and from the supply chain side. It motivated them to be more aware of what was happening across their entire supply network, and more open and transparent with their customers.
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A few weeks ago, I launched a new blog series on sales and operations planning (S&OP). In that introductory post, I outlined a number of important topics that I plan to explore in more detail throughout the summer. To make sure everyone is on the same page, I want to review the basics, the foundation, which is… what exactly is S&OP? I’ve seen and heard so many different answers and perspectives in response to this question. Therefore, I think it is important to share what I feel are some leading practices and also how leading organizations think about S&OP.
First of all, S&OP is indeed a process by most academic definitions (Merriam-Webster Link), as it follows a series of steps and activities with a particular cycle or cadence. And there are certainly meetings that occur throughout the process, but S&OP is not a meeting. S&OP is so much more than a process or a meeting. Yes, I’ve seen organizations that think they are ‘doing S&OP’ because they have a monthly meeting, but in fact they are actually missing the point of S&OP.
If one thinks about the purpose of S&OP, it is to ultimately match supply and demand, while balancing the cost (supply) and service (demand) tradeoffs of the supply chain. But as most of us know, addressing or solving this tradeoff is not linear in any way. Organizations face a recurring flow of supply chain imbalances that require decisions. S&OP serves to guide that decision making across the organization, making sure everyone is well informed and that trade-offs are analyzed and addressed properly. As a result, S&OP can be thought of more as an operating model to help organizations make better business decisions.
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This guest post comes to us from Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management.
We’re always trying to stay on top of Supply Chain developments at Argentus. And this sometimes takes us into looking at the emerging technologies that are poised to have a significant impact on the function. We’ve talked about 3D printing, self-driving cars, automation and other 21st-century developments that could transform the way that products are brought to market – as well as the job descriptions and career paths of the Supply Chain professionals who manage that process.
Discussions of emerging technologies in the Supply Chain might be a bit far afield from the world of talent that we deal with as a recruitment firm, but they’re not as far away as you might think: the last decade’s emerging technologies (eCommerce and big data analytics) have already completely upended the skillset required by Supply Chain professionals, and changed the function from a talent standpoint into something very different than it used to be. So it doesn’t hurt to see what’s on the horizon.
Hyperloop is a theoretical transportation technology, a long-awaited “fifth avenue” of transportation that uses vacuum tubes and linear induction motors to shuttle pressurized air capsules along a track, using a lack of friction to achieve speeds as high as 700 mph (approx. 1126km / h). The proposed first route between Los Angeles and San Francisco would cut travel times from 4 hours to 35 minutes. The idea sounds straight out of science fiction – like many of the other large-scale projects proposed and championed by its inventor, Elon Musk. But last week, Hyperloop had its first prototype test on an open track – and the test was successful – taking the idea from the realm of science fiction into actual possibility.
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