This Supply Chain Matters blog commentary is the third in a market education series developed in collaboration with Kinaxis on exploring the future of supply chain planning.
In our initial blog commentary of this series, we posed a baseline definition of concurrent supply chain planning, why this capability is becoming ever more important for supporting various needs for more integrated planning processes.
Our second commentary in this series amplified some industry specific examples of why concurrent planning has become increasingly important, perhaps essential. Both in automotive and pharmaceutical and drug environments, the notions of integrated supply chain now translate to connecting end-to-end supply chain information and unique planning requirements with constantly changing business needs for cross-functional and cross-business coordination.
In this commentary, this author and industry supply chain observer felt a need to dwell more on the organizational factors of people, process, and cooperation that sometime inhibit overall needs for fostering continuous planning and more informed decision-making capabilities that can keep pace with today’s faster clock speeds of business decisions across many industry environments.
At the Kinaxis 2017 customer conference held in late October, there were notable common threads from a number of the customer presentations that amplified the people, process and organizational challenges and interactions that ultimately lead each organization’s journey toward concurrent supply chain planning.
In some cases, compelling corporate and individual business decision-making shortcomings become the impetus for change. Some organizations addressed these challenges in the early stages of their transformative efforts while some candidly had to address such challenges in latter stages after project teams discovered or uncovered underlying issues related to processes and supporting data.
For pharmaceutical manufacturer’s Amgen and Merck, there were realizations of different business operating models required some form of central control or cohesion. A further realization was that business change is constant, parallel, and not sequential.
Some have been involved in the forces of time-based competition, where competitors make more timely decisions based on a continuous review of product demand and supply changes and where teams come together in more synergistic efforts working on the same common basis of the most-timely data related to the supply chain. Electronics contract manufacturing services provider Jabil exists in an industry that is dominated by time-based developments in continuous new product introduction and end-customer demand cycles. Their business model must support high-tech OEM customers with different product forecasting calendars and planning time fences related to contracted capacity. Jabil’s journey is articulated as moving beyond planning as a sequentially-based reporting mechanism to a process anchored in smarter analytics that provides more-timely response to customer’s ever-changing manufacturing and distribution requirements. The goal is the ability to generate multiple S&OP Executive Summary Dashboards associated with key customers that continually analyze material, inventory, allocated capacity, and financial trade-offs for various customer-focused teams.
Some have come to realize that the supply chain is a nerve center of overall business, and as-such, needs the ability to self-analyze potential process bottlenecks or pending disruption. Brian Tessier, Vice-President of Global Supply Chain Innovation at Schneider Electric, a globally-based energy products and services company with a supply chain that spans over 200 factories and 40,000 suppliers, launched CODI, a center for digital innovation across supply chain business processes. He described CODI as a learning lab that evaluates new processes and technologies and supports 90-180-day pilots of technology. Tessier observed that: “Supply chain is data-rich but insights poor.” To validate that observation, a proof-of-concept pilot analyzed 18 million records of planning data and was able to identify specific lead-time variances related to two specific suppliers that exhibited more than 10 days variance in actual lead-time performance. Such analysis is often overlooked in a sequentially-driven planning process. Tessier observed: “We are on the verge of realizing the promise of a self-healing supply chain,” leveraging what was described as continuously forecasting for all parts, suppliers and sites while leveraging cluster analysis, machine-learning, and data aggregation technologies in a continuous planning process.
Essentially, the clock speed of business has dramatically increased and gone are the days when planning happens in isolation or can sustain itself in rigid sequential timetables. Today’s supply chain environments increasingly require the need to breakdown information silos through enhanced cross-functional collaboration, make faster and more-informed decisions within a context of end-to-end supply chain visibility and required customer service and financial business outcomes.
Concurrency involves self-directed teams addressing constantly changing customer product demand needs related to time and performance parameters. As Lauren Avenius, Project Manager for DJO Global astutely observed, it is not a chain of steps, it is concurrency of controlled processes.
Today’s advanced planning and analytics technology provide the ability to identify, uncover or alert to bottleneck areas, unplanned deviation on a much more-timely basis, before they lead to dissatisfied customers and missed milestones.
The role of supply chain planner evolves to that of network planner, transforming from one of constantly changing the forecast to modifying algorithms and data sources to support more proactive decision-making involving a dynamic network of resources and capabilities.
Concurrent processes and supporting technology need to be nurtured in centers of excellence, managed-scope pilots, and learning labs available to multiple supply chain and business planning experts.
© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.