We were catching-up on reading this week and reviewed an article published in CSCMP’s Supply Chain Quarterly printed magazine. (paid subscription or CSCMP professional membership required). The article was titled, Tap into the power of analytics, and was jointly authored by Thomas H. Davenport, distinguished professor of IT and management at Babson College, and Jerry O’Dwyer, a principle and leader of analytics strategy for the strategy and operations practice at Deloitte Consulting LLP.
I remain a strong fan of professor Davenport’s research in the area of supply chain and business analytics.
The article itself explored new ways of applying supply chain analytics to business performance needs and where to find the best opportunities. One of the most important insights brought out in this article reflected on the need for improving analytical “literacy” across supply chain teams. We have heard and read of this same need coming-up more frequently among senior supply chain management teams and wanted to enhance this challenge through this commentary.
In their article, the authors make the observation that several companies have had to considerably upgrade their analytical capabilities of both their IT applications and in the skills of business planning teams. A quote from one supply chain manager observes that people have to be twice as smart in order to make best leverage of today’s more sophisticated technologies in analytics. Further noted is that individuals need to be either retrained or perhaps moved to other opportunities. Some companies are providing for in-house sponsored training while outside universities or training organizations are offering new opportunities for deeper analytical skills.
One other concept brought out by the authors to facilitate the understanding of supply chain analytical skills was simpler software applications with narrow functionality. The analogy brought forward is that of a “smartphone-like app” that would support a single decision, and further noted is that some software providers are now beginning to introduce such narrow applications. Examples mentioned are supplier evaluation, inventory performance analysis or transportation analytics. The authors point out that the way to guarantee the use of analytics in supply chain management is to embed them into supply chain-oriented processes and systems.
Supply Chain Matters would not necessarily agree with the first approach, namely because it places analytics and business intelligence data back into functional stovepipes, rather than into a supply-chain wide information and intelligence repository. These narrow scope analytics applications may also be the means of some software providers to hang on to customers while not necessarily supporting the broader and more extensive need. The latter, in our view, reflects the emerging concepts of supply chain control tower like applications or platforms, which we addressed in prediction five of our Supply Chain Matters 2012 Predictions for Global Supply Chains.
Regardless of the systems and technology approach, the reality remains that both supply chain management and planning teams need to consider realistic methods for deepening individual skills and literacy into leveraging advanced analytics within supply chain business decisions.
We encourage readers to share their own views regarding the growing need for supply chain analytical skills by either adding a Comment to this posting, or responding to our interactive poll question appearing in the right-hand panel. Depending on the volume of responses, we will share the results in an updated commentary.
Bob Ferrari
Bob – I enjoy reading your insights. Regarding this post I thought you might want to research the work of Elliott Jaques. In his Requisite Organization book, he identifies “four and only four ways” individuals process information,that this quartet of processes recurs within higher and higher orders of complexity of information, and each of these processes corresponds to a distinct step in potential capability of individuals.” Summary: there are discontinuous steps in the nature of human capability. What I find in working with clients is that most of us “know” this, but then we managers ask employees to perform work, especially analytical work, that requires higher order capability than they possess. RO is a total management system designed to ensure organizations place employees in the right roles with the right levels of personal capability. It’s a wonderful thing for all concerned.
Kevin Earnest
President
Earnest Consulting
Enjoyed this article and see both myself and my MPS planning team struggling with this very item today. What are the opportunities for rapid improvement in this area? Bring in a coach? Establish ongoing classes?
Almost all of the Supply Chainers I work with both in MPS and in SnOP and Demand Mgmt are really, really bright – they can get deeper analytics and problem solving – but they need some help leveraging a methodology and/or a technique to help us organize our thinking. Are there any tried and true methods to get there?
Jenny,
Thanks for sharing your comments. Your industry presents special challenges in analytics and decision-making because of its unique production processes.
I am a firm believer in organizational coaching and mentoring, allowing the planning organization to learn as a team. Define a plan that provides for incremental learning in specific, defined decision-making processes such as demand management and S&OP.
I would also recommend you leverage external specialists or technology vendors themselves to provide recommendations and assistance for shared learning.
Bob Ferrari
Bob, you scooped The New York Times. They ran a news analysis over the weekend called “The Age of Big Data” http://www.nytimes.com/2012/02/12/sunday-review/big-datas-impact-in-the-world.html?_r=1&ref=stevelohr that said a McKinsey study “projects that the United States needs 140,000 to 190,000 more workers with “deep analytical” expertise and 1.5 million more data-literate managers, whether retrained or hired.” Nicely done. Jeff
Hi Jeff,
Thanks for your comment and sharing the link to the New York Times article.
Anytime Supply Chain Matters can “scoop” the Times is great. I have often suspected that many reporters in traditional media surf blogs to get ideas on topics of interest.
In any case, the projection for the need of 140,000 – 190,000 more workers with analytical expertise should be motivation enough to springboard training and mentoring programs for these skills.
I hope more readers will share resources or organizations that can help in this effort.
Bob Ferrari