I don’t really see my iPhone as a mobile phone anymore – it’s so much more than that, and judging by the number of people as attached to their phone as I am to mine, I’m far from alone. Every day I use it for a multitude of different applications that assist my life. Things like tracking times and distance whilst exercising, checking travel status, messages, watching the Rugby World Cup and occasionally tweeting about life thoughts.
At the excellent European Gartner Supply Chain Executive Conference last week, I was really surprised to see Kinaxis was the only vendor actively demonstrating a functional supply chain management product on a mobile device during the course of the two day event. Isn’t that a path we should all be headed down given society’s acceptance and reliance on mobile technology these days? Aren’t more and more businesses finding ways to allow their employees to work from where they are? Why should supply chain be any different?
Customers are driving the supply chain. There’s no question about that. The demands of consumers, in an age where information is king, are becoming ever more dynamic and the need to be responsive is paramount. If a sales person is on the road and he gets a call from one of his major customers asking if an order can be achieved – how long is reasonable to get back to them with a definitive answer? Well, it probably depends on the circumstances of the order, but I’d state that in nearly every single case, responding quickly with accuracy will always be better than either a slow response, an inaccurate one, or worst of all, a slow and inaccurate answer.
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As I was presenting at the European Supply Chain and Logistics Summit last week, the overriding memory I’ll take away was the number of people that were nodding and pointing at the screen when I talked about how unplanned supply chain events that occur need to be addressed immediately and that they cannot wait to be included as part of a new S&OP cycle.
Traditionally, an S&OP cycle is a process geared towards taking a medium/long-term forecast, balancing with aggregate level resources and generating questions/answers to establish preventative action. Usually it’s seen as a monthly process that follows this cycle:
- Collate actual data and perform performance analysis
- Start demand planning cycle
- Establish supply status
- Perform balancing and establish variances
- Agree on corrective action and present solutions
- Executive decision and commit to the business
However, this process makes several broad assumptions:
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If your 3PL supply chain problem was to deliver 400,000 items daily from supplier to customer and your on-time in full metric was a six-sigma target standard of 1 failure per million, how would you do it?
What If I was to also constrain the resources you had at your disposal and said you only had 5000 transportation vehicles and your delivery slot was just 1 hour and that your delivery window was always 12pm until 1pm? What if I was then to say that you had no technology at your disposal to manage it and your only transportation methods were bicycles, trains and feet and you had to do it on a budget of 33 cents per delivery?
Well, that’s what the Dabbawalas in India have been doing in Mumbai for over 100 years – delivering meals direct to workers and school desks from the family home with an OTIF of 99.99 %. They don’t use technology but what they do have is a tried and trusted set of highly efficient robust procedures that govern how they manage their work. It’s a methodology that has been established and passed down from generation to generation and has stood the test of time.
So, why don’t organisations with similar problems just invest time in improving their working procedures? Why do we even need technology? Well, the answer in reality is that we really do need both – not all of our problems are only 3PL issues with supply chains having such stable demand signals – same item, same quantity, to the same customer, pretty much every day. Not all of our supply chains have a zero inventory, stable sub-contracted supply – it’s a relatively quick production process to make an Indian meal (2-3 hours), freshly cooked every day often using Tandoor ovens. In addition, the majority of our distribution networks are geographically wider and much more complex.
Away from Mumbai we’re at the PIMS conference this week in London discussing Pharmaceutical supply chain problems with some key players in the market. The common themes we are hearing are:
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