The days of preparing for new trade policies are over. For decades, companies were given advance notice of coming tariff announcements, with time to adapt to the upcoming changes. But that has changed in today’s “tweet today, implement tomorrow” pace of business. That speed and volatility have opened the door for a new style of global trade management to emerge. A recent Aberdeen Group survey of 126 companies identified the organizations that excel at global trade management and the key factors that drive their success.
Posts categorized as 'General News'
I’m happy to share that the following recorded webcast is now available: Concurrency: The new era of supply chain planning with Kevin O’Marah, Chief Content Officer, SCM World and Trevor Miles, Vice President of Thought Leadership, Kinaxis.
Future supply chain leaders will look back at 2016 as the end of an era. Spurred by unprecedented disruption, volatility and technology evolution, leading organizations are abandoning outdated, overly rigid supply chain planning processes and moving towards the future of planning: concurrency.
Innovate to survive. That’s the key message I took away from this year’s Gartner Supply Chain Executive Conference. While that may not be exactly what Gartner had in mind—the official theme was The Bimodal Supply Chain: Tackling Today, Preparing for Tomorrow—it was a running dialogue across all the sessions I sat in on.
Their idea of the bimodal supply chain in essence breaks things down into two ‘modes.’ Mode one focuses on tackling the issues your supply chain is facing today. Mode two is about innovation and growth, and the point was made in a number of sessions that you need to do both if you want to excel. If you’re someone who looks forward to change, who seeks it out because it’s inspiring and exciting, then mode two may seem obvious. You’ve likely already embraced this era where innovation across all facets of life has exploded and become ordinary.
To me, innovation, aka what’s driving mode two of Gartner’s bimodal supply chain model, is already intertwined in our day-to-day lives. Hasn’t it always been to some capacity? Innovation is what has taken us from the birth of the internet to this growing concept of the Internet of Things and now beyond.
We know innovation is important, it’s what moves us forward. History has proven that notion over, and over, and over again. Just look at the advancements in supply chain courtesy of innovation like MRP I, MRP II, and APS. Without them, we likely wouldn’t have been able to keep pace with the widespread globalization that has led to extensive supply chains and an explosion in product portfolios. I do agree strongly with Gartner that while we may all know how critical innovation is, we have to face the reality that actually achieving it is hard. Very hard. And in most cases true innovation isn’t just going to happen on its own. At least not in the type of siloed and conservative organizations that are quite prevalent across supply chains today.
In Aesop’s Fables there is a very famous story about a tortoise and a hare. For those of you unfamiliar with this children’s classic, the moral of it is this—slow and steady wins the race. Except of course, if you work in supply chain.
While turtles and tortoises have many wonderful qualities that should be celebrated as part of World Turtle Day, their characteristically slow pace and unhurried nature can prove detrimental to any business trying to keep up in this digital age, and the rapidly changing consumer demands that go along with it.
Now that’s not to say I’m advocating rushing headlong into anything without some thought. Your supply chain does need to be at least part tortoise in that aspect. There’s value and protection in stability. But if you spend all your time planning, are you really going to be prepared when the course unexpectedly changes direction? If your first thought is to go back to the planning stage to factor in this new variable, you may soon find yourself left in the dust of a much faster paced and agile competitor.
My colleague CJ Wehlage has described speed as the true innovation in supply chain. He talks about the ability to act on change in minutes, bringing your suppliers, distributors, shippers, etc. together and getting everyone on the same page as quickly as possible. Digital technology has enabled your customers to make decisions more rapidly and confidently, making the process that much more efficient and effective. Shouldn’t your supply chain be able to do the same?
Two years ago, I made some very bold predictions on the 2014 Top 25 Supply Chains, and about 80% of them were true. Last year, I made the not-so bold predictions, as the Gartner 2015 Top 25 Supply Chain rankings were pretty much unchanged. That is, except for the new “Masters” category. I sure hope the Gartner gang will keep a focus on the Masters (Apple and P&G), as these two supply chains continue provide best practice learnings. Which leads me to my first Bold Prediction…
Bold Prediction #1: The Master’s category will be, more or less, forgotten this year.
Apple and P&G were put in a Master’s category in 2015. I’m still a bit confused about this move as I’m not sure if this was a way to clear these two perennials out and make room for others, or a means to focus on their unique capabilities. Having worked at AMR Research, I understand the need to showcase other companies – helps readership. But, like Ric Flair would say, “if you want to be the man, you gotta beat the man….”
Next year (2017), by the rules of “those companies that have consistently had top five composite scores for at least seven out of the last 10 years”, Amazon will be moved into the Master’s. However, I predict in next month’s Top 25 Gala, that both Apple and P&G will not have much airtime. Unfortunate, as I believe Apple and P&G can still share some significant strategies on supply chain. So, I will state one thing each of the Master’s can teach us.
Apple = Leverage
This starts with product simplification. Supply chain leaders talk about SKU rationalization, but rarely achieve it. Apple has. With a succinct variety, you can leverage common parts, and more precisely optimize the supply chain network. Apple’s supply chain also has a small amount of suppliers, allowing them to leverage relationships, price and volumes. The result being higher profit margins, something Apple could use to leverage exclusivity agreements (such as booking out UPS and DHL shipment capacities).
When talking about exciting new advancements that are coming to the supply chain, the discussion will always usually end up focused around 3D printing. Rightly so, as the 3D printer has opened up new opportunities never before possible in the supply chain. Rather than having to wait for a specialized part, companies can now print the part they need right on site. This can be a huge time and cost saver for companies involved in projects, but when looking at the overall supply chain worldwide, 3D printing is a pretty niche example. Even with 3D printers popping up everywhere, changing the way companies rely on the supply chain, there will always be limitations.
Sure, 3D printers might be able to print space habitats on Mars, but they can’t print everything and there will always be a need to transport an item(s) from one destination to another. 3D printing is revolutionary, but there is another absolute game changer about to deploy in the supply side that is an evolution; self-driving trucks. When looking at the amount of freight moved just in America alone, there was 9.2 billion tons (primary shipment only) moved by truck representing 67% of the total tonnage moved in 2011.
We’ve all heard about Google (to be correct, Alphabet since Google Inc re-organized itself into its new hierarchy structure) and Tesla in their efforts to create self-driving cars for the mass car buying public, but other companies, especially trucking companies, have not been standing idly by in this field either. As reported by The Guardian a number of European truck manufactures recently collaborated on creating a convoy of more than six semi-autonomous (semi-autonomous because there was still a back-up human driver) trucks that drove from Sweden and south Germany to a port in Rotterdam, Netherlands. Although not ready for complete autonomous driving yet, we can certainly see in the very near future (2018?) a convoy of trucks, completely unmanned driving across the highways of the world.
If you’re a supply chain nerd like me, you’ve probably noticed that Tesla’s been making some pretty big waves in the auto industry. It seems Tesla is poised to be the first company to truly take advantage of a new market segment. People are looking for vehicles that are environmentally responsible, technologically advanced, safe, sexy, and affordable to the average Joe. Their new Model 3 meets all of this criteria, and has a range about double that of comparable vehicles. They’ve nailed the customer requirements so well that they’ve received over 320,000 pre-orders in the first week, even though deliveries aren’t slated to begin until the end of 2017.
To meet this demand, Tesla hopes to reach a production rate of 500,000 vehicles per year by 2020. Wait… what? 500K per year, but not until 2020? Even if they managed to accelerate their production schedule to achieve 500K per year at the end of 2017, they still have at least an 8 month backlog before they even deliver their first car. On the surface, this seems like an unprecedented supply chain challenge. Their level of success at building this new supply chain will make or break their business. To make it even harder, due to the incredible amount of money involved and the sex-appeal of the product, they’ll be undergoing their supply chain revolution with a level of public scrutiny normally limited to the latest iPhones!
How are companies meeting the challenge of big data, the Internet of Things and the need for change management? How does the big trends affect supply chain management?
In this video, hear a wide-ranging roundtable discussion with industry leaders about how companies are meeting the challenge of big data, the Internet of Things and the need for change management — all with the goal of improving the planning function and achieving end-to-end supply-chain visibility. This discussion features Mark Ramirez, chief technology officer with Trinity Rail; Josh Greenbaum, principal of Enterprise Applications Consulting, Trevor Miles, vice president of product innovation with Kinaxis; and Bob Bowman, managing editor of SupplyChainBrain.