This is our third posting regarding activities at the 2010 Supply Chain Council Executive Summit being held here in Houston.
This afternoon’s sessions of day one dived deeper into current challenges of supply chain management in the new normal of volatile and unpredictable business.
The afternoon highlight for me was a presentation delivered by Karl Braitberg, Vice President of Demand Management, Planning and Customer Operations at Cisco Systems. His presentation included acknowledgement that this past 18 months have been rather challenging for the high tech industry sector, probably the most challenging that supply chain professionals have had in their careers. He also provided a rather practical template for managing the new realities of business, namely a focus on both the structural and equivalent environmental changes that are impacting the supply chain. Structural factors are those driven by strategic and tactical priorities of the business. These structural changes can sometimes be competitive differentiators, or drawbacks, and teams need to place practical context to such changes. The important take away is to focus on those which you as a manager can influence and initiate change. Environmental changes on the other hand are the realities of business which many in your industry must deal with.
Karl also provided four basic principles for managing in the new reality which include simplification of operational processes, new metrics focused on the end-to-end value chain, segmentation of supply chain capabilities and tight collaboration with suppliers and customers. His summary take-aways hit a home run; we are at an historical inflection point in supply chain management, both structural and environmental “mega-drivers’ are firing simultaneously, and increased demand and supply volatility is here to stay.
I also attended an afternoon breakout session discussing the topic of supply chain risk management. In every supply chain conference I’ve attended of late, there seems to be a wide disparity on the scope of this topic, and this afternoon’s breakout was no exception. Some organizations have a rather tactical perspective on risk, a focus primarily on supplier or operational risk dimensions. Some organizations take a broader, more business strategic perspective. Matt Davis, an industry analyst for AMR/Gartner noted a recent AMR survey on supply chain risk where respondents indicated that overall perceptions of risk actually went down by 7%. That was a complete mind blower, especially given the litany of non-stop supply chain disruptions that have occurred this year. An informal polling of the room indicated that a good majority felt that their organization had some formal group focused on managing risk. The roundtable discussion also uncovered a need for analytical tools that better quantify supply chain risks for senior management.
The afternoon also featured an informative and knowledgeable panel discussion on supply chain sustainability strategies. Panelists concluded that sustainability strategies can provide new business as well as cost savings opportunities, while still adhering to an overall set of corporate sustainability objectives. I also noted yet another acknowledgement that global based consumers remain focused on buying sustainable products, even in a recessionary environment.
Mark Lynch, Supply Chain Capability Director at Coca-Cola concluded a very knowledge intensive day with a presentation on Coke’s Demand, Operations and Inventory Planning Process (DOIP). This is an extension of traditional S&OP that incorporates demand sensing and inventory management strategies as a part of the planning process. The process acknowledges that inventory can be either good, bad, or ugly and that team processes that leverage the good to enhance customer demand can bring additional benefits.
It has been a long and informative day and I’m looking forward to recharging the batteries for day two.