I had the opportunity to review a recent study, High Performance through Supply Chain Planning, produced and made available by Accenture. This quantitative study focused on supply chain panning competencies and provided more evidence that the existence of dynamic and integrated supply chain planning processes will indeed differentiate industry leaders from laggards.
This global based study assimilated responses from 240 individual companies, and included 70 questions related to the aspects of supply chain planning. Readers should take note of this since a study of this breadth is not one that you typically see featured by industry analyst firms today. The demographics seem to be well balanced in terms of balance across Americas, Asia Pacific, and Europe, as well as mix of manufacturing and service-related industry make-up.
I found some of the study findings to be reinforcement for what many supply chain planning professionals already may know:
- – The median forecast accuracy at the SKU level across all products turned out to be just 75 percent. Yes, the forecast is never accurate no matter how hard you try. This provides yet more evidence for investing in abilities to support more agility and responsiveness to overall planning processes.
- – The median customer order fill rate (percent of orders filled completely) was reported as 95 percent, but I did not see data relative to line-item fill rate. It reinforces that supply chain planning processes are positively impacting accuracy in order fill rate, but more work remains.
Of more interest is the data reflecting rather large performance gaps of “masters”, which was defined as those who finished in the top 10 percent of cost effectiveness and customer service measures, vs. “laggards”, respondents in the bottom 10 percent. Accenture reports nearly twice as many masters as laggards tailor their planning processes by product segment. Three-quarters of masters include suppliers in their planning efforts, while only half the laggards do so.
The most interesting finding was that the masters are more likely to plan for and rapidly respond to disruptive events or new market opportunities. According to the report, “three times as many masters used up-to-date information and dynamic planning models to respond rapidly to supply chain disruptions and mute their operational impact.”
I recommend you review this and similar reports if you manage or perform supply chain planning for your company. You may well find some interesting insights for evaluating what defines dynamic supply chain capability.
Having sponsored and reviewed many of these supply chain planning studies, I am constantly grounded to the fact that dynamic and integrated planning does make a difference. This is especially important since companies now need to make preparations for post-recession recovery.
What about your supply chain planning organization? How would you rate your capabilities to dynamically plan? Is the target constantly moving?