The following posting can be viewed and commented upon on the Kinaxis Supply Chain Expert Community web site.

At the recent Emptoris Empower conference, I had the opportunity to view an interesting presentation delivered by Kevin Keegan, Director at PRTM Management Consultants. The presentation really caught my interest because it included a recent PRTM survey of what’s on the mind of the Chief Operating Officer (COO) in positioning global supply chain process capabilities for the next two years.

The survey itself, titled Global Supply Chain Trends, Are Our Supply Chains Able to Support the Recovery, was rather timely and involved the views of 300 COO’s across multiple industry settings.  It took place in late spring and early summer of 2010, which would have placed the context of the COO agenda more toward moving beyond the effects of the global economic recession of 2008-2009.  The full report can be downloaded at this link.

The survey’s principal focus was to ascertain what supply chain capabilities will be capitalized upon in the coming months.  The summary conclusions were not at all surprising and fairly consistent to what I’ve been feeling and sensing:

  • Volatility and uncertainty have permanently increased in many industry settings, and the COO seeks a more market dynamic, demand sensing, cost-optimized supply chain configuration
  • Top-line revenue growth requires a global customer and supplier presence
  • The existing supply chain organization is not truly integrated or empowered
  • Managing supply chain risk involves the complete end-to-end supply chain

The most important conclusions drawn from the survey results point to three key enabling strategies that COO’s want by 2012:

Today              2012

Joint planning with key customers                   35%                  53%

Improved sensing of demand                         22%                  47%

VMI services provided by suppliers               25%                    44%

VMI services provided to customers                13%                    29%

Yet, in the category of exhibiting real-time planning and execution capabilities, the responses were flat at 44%, and data capture at point-of-sale showed some slight improvement, 25% today vs. 33% by 2012. The PRTM conclusion was that the emphasis in the slash and burn cost strategy seems to have subsided, and that is certainly the good news. Another key PRTM conclusion is that the supply chain process perspective now shifts toward improving customer access, increasing upstream and downstream flexibility and improving the overall accuracy of supply chain planning.

My reaction to this latest PRTM study is that we, as a community, are not educating the COO as to the most important capabilities needed to enable this agenda, namely more business intelligence and what-if analysis capabilities.  It just does not seem to show-up in this and other survey data I’ve been seeing.

There are also some other messages here about the continued importance of management education, and positioning an integrated sales and operations planning (S&OP) process as a key mechanism for facilitating improved access to both customer and supplier needs.  Managing senior management education includes an agenda of why previous investments in transaction centered supply chain planning automation fall short in added capabilities for supplier and customer engagement, synchronization and business intelligence.  It is not a question of why didn’t we get this from our ERP vendor, but rather how we get the process enabled with different, forward-looking analysis capabilities.  I’ll cite one powerful analogy I often heard from Jake Barr of Procter and Gamble.  If you are driving down the road, and storm clouds are threatening, do you drive by looking in the rear-view window to ascertain what landmarks just passed, or look through the windshield to ascertain what direction you are headed.  Today we can add yet another addition to that analogy.  With the advent of GPS in our cars, we let the system suggest the best routes for reaching our destination, given certain weather and traffic conditions.

The question however remains- are you educating your COO on what is really required to insure improved customer and supplier access as well as improved supply chain accuracy. Educating on the differences between transactional oriented vs. business intelligence, S&OP enabling and what-if analysis capabilities is the proper context to enable the 2012 agenda.

Bob Ferrari