So I’ve been doing a bit of traveling and talking to a bunch of supply chain folks along the way. I attended a conference the other week and it was interesting how many conversations ran a similar course, coming down to the same topic of Response.
So much meaning in a simple word. When talking to someone, the right response can bring a smile, the wrong response can bring a frown. In an emergency, the right response done quickly can literally mean the difference between life and death. In supply chain, response often isn’t a matter of life and death, but responding quickly and correctly can result in millions of dollars of savings or additional earnings. In most cases, we are not talking about single responses having huge financial impacts; instead, it’s the cumulative effect of many decisions, many opportunities where a person had to make a call. Each small decision when added up can mean the difference between profit and loss.
So who are the people making these decisions? Who are these arbiters of the supply chain? Obviously they must be highly paid executives, right? Nope! These are the doers of the supply chain. The planners, buyers, master schedulers and analysts. These people need to make the right decisions, quickly every day of the week. They have the right knowledge, but from my conversations, what I see is that their challenge has been that the supply chain tools that are given to them are letting them down. Here’s been my response in talking with them…
That ERP installation that you spent millions on? It’s fine for tracking transactions. It works ok to create THE PLAN (the daily or weekly batch run which creates a plan that’s valid until the first change occurs…usually at 7:05 the next morning). It doesn’t help when your planners need to make a fast decision. Why?
- The analytics takes hours to run.
- The results are very difficult to analyze.
- You can’t do a quick simulation and if you could, you can’t easily see if the simulated approach is the right approach.
So when your people need to make a fast decision, what do they do? They will try to work around the limitations of the system; dump data to Excel or Access and try to model the problem there. Maybe they take a guess, or my favorite approach…load and pray. What is the result? Bad decisions. The kind of bad decisions that when taken cumulatively result in significant losses over time.
So what’s the answer? You have the right people. You have the data. You simply need the tools to allow your people to make the right decisions and to make those decisions in time to make a difference. Where will you find this? Hint: you won’t find it at your ERP vendor.
A rapid decision support solution will have the following characteristics;
- Your entire supply chain data in a single environment; all sites, suppliers, forecasts regardless of the originating system, all available as a single view of the business. This allows you to make decisions based on all available data.
- The analytics of all of your different ERP systems modeled in a single system and run in-memory, which means that calculations that take your ERP system hours can be done in seconds at will.
- The ability to do “what-if” analysis. There is seldom only one possible answer to a supply chain problem. Being able to try different approaches allows you to explore different aspects of complex solutions.
- The ability to understand what the data means. This requires a powerful interface that allows you to view summarized information and also to drill down to the details to understand what is behind the numbers you are seeing.
- Once you have some possible response alternatives, you need to be able to compare these resolutions to determine which response best meets the needs of your company.
It all comes back around to making the right decision in time to make a difference.
By properly equipping those people in your company that make critical decisions every day, you will ensure that those decisions are made quickly and with confidence. This means, more of these decisions will be the right decision and cumulatively, they will result in higher customer satisfaction and higher profits.
How do you respond today? Comment back and let us know.