Just a quick post to share some research courtesy of Lora Cecere of Supply Chain Insights LLC.
Supply Chain Metrics That Matter: A Focus on Aerospace and Defense
Increased complexity, slowed growth and shrinking margins are challenging the Aerospace and Defense (A&D) sector. According to recent research from Supply Chain Insights, A&D companies need a renewed focus on collaboration, visibility and core supply chain capabilities to remain competitive and win new business.
In Supply Chain Metrics That Matter: A Focus on Aerospace and Defense, Supply Chain Insights benchmarks A&D companies against other industries and dives into data from five top A&D companies over the last decade. The research highlights the supply chain challenges for this industry, as well as the critical importance of getting it right.
Complimentary report courtesy of Lora Cecere of Supply Chain Insights LLC.
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The central theme of the Gartner Supply Chain Executive conference last week was all about supply chain leading the next decade. I too believe this to be the case – both out of necessity and because of the progressive evolution of the function. But a function doesn’t lead, people do. So who are these people that will manage and contribute to supply chain management in the next decade? Well, going by the sessions at the Gartner conference, there will seemingly be a lot of roles that will be difficult to fill, and for those roles that are occupied, they will be increasingly held by women and many millennial. The face of supply chain is most certainly changing, and it’s happening at the same time as the profile and dependency on supply chain is intensifying. Ironically, for an industry that is all about balancing supply and demand, there doesn’t appear to be much balance when it comes to its own human resources going forward. It’s time for supply chain organizations to do a reality check and apply some basic planning and course correction initiatives within their own internal organizations.
Consider these opposing trends that are driving significant resource gaps (thank you to keynote speaker, Linda Topping, Vice President, Chief Procurement Officer at Colgate Palmolive for some of the stats included below):
# of supply chain jobs will rise 25% in next decade.
25% of workforce will reach retirement by 2015.
How do you fill more jobs with less people?
Increasing capabilities required
Less than 20% of today’s workforce have the skill set required.
Depleting experience and lagging academia
As experienced workforce retires, key supply chain competencies will depart along with them. And while the number of supply chain university programs is increasing, the scope and depth of curriculums is lagging behind current needs.
As supply chains become more complex, the sophistication of the supply chain function is increasing and so too must the analytical capabilities of the people that run it. Where will that come from?
Millennial will account for 36% of the workforce by 2015, and 75% of workforce by 2025.
Slow to change organizations
- Personally fulfilling work
- Sense of culture and community
- Career movement
- Flatter, less-hierarchical organizations
- Social and collaborative environments
- Highly technology-enabled work
Millennial’s want more out of their work environments and because of the industry’s resource constraints they will have the power to demand it. Who will fight or face this fact?
Increasing capability needs
According to a session I attended on “Revelations from Gartner’s 6th Annual Supply Chain User Wants and Needs Study” by Gartner analyst, Dwight Klappich, the basic conclusion is that while organizations talk about the urgent need for transformational and innovative technologies, for many, their activities and investments remain very tactical and focused on maintaining existing technologies.
Despite survey respondents citing that among their top supply chain challenges were the inability to orchestrate the end-to-end supply chain, and the lack of cross-functional collaboration, 61% of technology investments are made with the goal to reduce operating and support costs.
Continued investment in legacy technology systems
Paraphrasing the presentation, companies continue to spend on the technologies they already have in place; they are investing in what they know, instead of what’s new.
There is a disproportional amount of money going to just “keep the lights on”. Less than 20% of budgets are spent on technologies intended to transform the business, whereas upwards of 50-70% is spent on technologies that run the business.
Make no mistake, technology is a resource issue. Technology is what can enable efficiencies that require less people. Technology is what can arm supply chain decision makers with the advanced analytical capabilities that today’s supply chain complexity necessitates. Technology is what can satisfy the millennial’s appetite for effective and “cool” ways to work.
Ultimately, technology is what will enable the supply chain to lead in the next decade.
There is one trend that is going in the right direction I believe… the increasing quantity and prominence of women in supply chain.
I know this topic has been talked to at length, even on this blog (and we have an upcoming webcast on this topic as well – get more details here), but it hit home again for me at the Gartner conference. It was satisfying and inspiring to say the least, to see that women represented the majority of the main-stage sessions – 5 out of 8 speakers in fact. And they were informative and engaging speakers on top of that, leaving no doubt to anyone their credibility and effectiveness…not that this was something they needed to prove. These were not women supply chain leaders; they were simply supply chain leaders. And to me, that should be the goal as we look towards defining the next decade. It shouldn’t be about categories of people, but about their skills, experience and success.
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Next week, June 5, 2014, we are excited to host a webcast on women in supply chain management.
We have a fantastic panel of accomplished female supply chain practitioners as well as industry expert Lora Cecere serving as the moderator. Register for the webcast to hear them discuss the thorny issues of mentoring, sponsorship, and quotas as mechanisms to get more women into supply chain, and the relative merits and drawbacks of these approaches.
Mentoring, Sponsorship, & Quotas: What are their relative merits in bringing more women into supply chain management?
Date: Thursday, June 5, 2014
Time: 2:00 PM to 3:00 PM ET
There is a consensus that since women constitute over half of the workforce but just 10% of top supply chain executive positions in Fortune Global 500 companies that something needs to be done to address this imbalance. While a great deal of attention gets placed on the ‘glass ceiling’ concept, there are a lot of women who face barriers and discrimination at mid and entry level positions too. There is a clear social responsibility need and this panel will focus on the practical advantages to having more women in supply chain including:
- Do women and men make decisions differently? If so, why does this matter to supply chain?
- Has supply chain become more relevant to women as a career option?
- What does a career path look like for women in supply chain?
Reserve your spot!
P A N E L I S T S :
Verda Blythe, Director, Grainger Center for Supply Chain Management, Wisconsin School of Business
Laura Dionne, Director, Worldwide Operations Planning, TriQuint
Elisabeth Kaszas, Director, Supply Chain, Amgen Inc.
Shellie Molina, VP, Global Supply Chain, First Solar
M O D E R A T O R :
Lora Cecere, Founder, Supply Chain Insights
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It has been said that the business book that most influenced Steve Jobs was ‘The Innovator’s Dilemma’. Considering the success Jobs experienced in his lifetime, I’m intrigued as to what he learned from it. We all know Jobs was a highly successful businessman, for example, Apple stock increased nearly 7,000% during the time Steve returned to Apple in August 1997 until passing the reins over to Tim Cook in August 2011. It made me wonder what this book means to the supply chain business. So I decided to read ‘The Innovator’s Dilemma’. But when I read it, I inserted the word “Supply Chain” where “Product” was mentioned.
I’d like to share some insights I gleaned from the book:
Clayton Christensen, author of “The Innovator’s Dilemma’ said,
“The reason why successful companies fail is they invest in things that provide the most immediate and tangible evidence of achievement.”
In ‘supply chain speak’, that means the inability to link strategy with execution. Most of us get caught in the day–to-day challenge of running the business. For example, planners spend endless hours on finding and resolving exceptions. There’s just not enough time in the day to focus on strategy and innovation.
A very good method I have used when leading supply chain strategies, is to focus on the decisions, rather than the information. Asking, “What margin do I need this network to have for the first three months of NPI?” is better than asking “How can we get safety stock data to match between systems?”
Why is this better? I say because of…
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I like to think of myself as a champion for women in all walks of life. And in terms of the supply chain, I believe there are female characteristics that we can and should leverage a lot more, specifically their more collaborative and consensual approach to solving problems. Of course I understand that these are generalizations. Prejudice is devaluing characteristics particular to one group, and assuming that a particular member of a group conforms to the broad generalizations about that group. I hope I do neither.
Why do I write about this topic now? Well, it is International Women’s Day for one, but it is also a topic I have written about before when commenting on the HSBC ‘Thank Heaven for Little Girls’ campaign and on a panel about women in supply chain at a John Gattorna conference in Singapore.
Here are some links to other resources for International Women’s Day:
If we understood and valued more the right skills needed in today’s environment, would that naturally translate to more women in the supply chain?
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I’m fortunate to work with a group whose primarily objective is to learn about your business, in particular about your supply chain. As a group we’ve conducted discovery sessions for literally hundreds of companies. In many cases the discovery sessions ultimately lead to supply chain improvements that resulted in millions of dollars’ worth of value, new business, excited customers, reduced costs and even promotions among the supply chain group.
These discovery sessions can be challenging. Many times it feels like a war as there are barrages of questions launched at the participants. Much like a doctor you have to ensure you’re asking the right questions and hope your audience can articulate their complex problems in a manner that you can digest them. It may or may not include all stakeholders. Multiple sessions sometimes have to happen to ensure all inputs are gathered. The struggle then becomes making sense of the pages of notes and then confirming that you’ve got it right. Often when confirming you’re findings you’ve missed something in the translation so getting it right can often take some time. Recently a colleague of mine, Carol, took a different approach to discovery. Let’s call it the “Post-It Note Revolution”. Calling it “Value Stream Mapping” was already taken.
Before I continue, many Lean-Six Sigma practitioners will say this is nothing new and I’ll be the first to agree. The Lean folks have been doing this for years. Unfortunately, at least in Supply Chain, what we’ve observed in the hundreds of discovery sessions we’ve conducted is that lean tools for process improvement aren’t as widely used as one would hope or expect. So for approximately $2.99, the price of a package of post it notes, Carol lead a collaborative session involving all stakeholders where they were able to easily map out the current state of key supply chain processes. A highlight was the visual of the finished “post-it note” process which leant itself to consensus on the current state. Process owners used the post-it notes to document each step along with identifying obvious opportunities for improvement. Every single person in the room had their say and an opportunity to provide input. Carol used some specific “lean brainstorming” techniques to ensure that happened. The visual representation made it easier for the owners to map the processes and much easier for Carol to learn about their business and understand where to take them in the next steps of improving their supply chain.
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I just recently saw Bill DuBois’ blog post ‘Is Your Supply Chain Glass Half Full?’ It tickled my fancy and a few additional one-liners came to mind:
- Project manager – I know you want to add cranberry juice to your martini glass, but I’ll need to write a change request for that.
- Potential customer – I’ll order that drink if I can talk to 3 other customers who’ll tell me how good it is
- Supply chain consultant– Tell me about your requirements for filling that glass, and I’ll transform your glass-filling process!
- Research analysts/Thought leaders – You’re at stage 4 of the maturity curve when you can segment all the glasses by fullness (or emptiness), sense how full each glass is with your eyes closed, and collaborate with the bartender to get a refill in real-time.
Hope you enjoyed that!
Let us know if you have any other supply chain, “is the glass half full” one liners!
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Recently, we had the privileged of recording three interviews with Jake Barr. In our first video, The evolution of CPG companies and their supply chains, Jake discusses industry dynamics and how supply chains (and the respective technologies to support the supply chain) have changed over the past 10 years. He describes it as “the perfect storm”. As a result, the need for speed and depth of decision making has dramatically increased. There has been a drastic time compression in having to react to the marketplace, and that requires a different technology architecture.
In Part 1: An executive’s perspective: The evolution of CPG companies and their supply chains, Jake Barr explores the following questions:
- How have consumer packaged goods companies changed in the last ten years?
- How has supply chain management changed for consumer packaged goods companies?
- How has supply chain management technology changed for consumer packaged goods companies?
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