Kinaxis

Consumer Products Industry Webinar

bweigand@kinaxis.com — Tue, 11 Jun 2019 12:48:19 +0000

Consumer Products Industry Webinar

bweigand@kinaxis.com Tue, 06/11/2019 - 08:48

Ferrari Group April 2019 Research Report

bweigand@kinaxis.com — Tue, 23 Apr 2019 12:42:28 +0000

Ferrari Group April 2019 Research Report

bweigand@kinaxis.com Tue, 04/23/2019 - 08:42

Predicting ChatGPT's impact on the future of supply chain

larnseth — Mon, 05 Jun 2023 15:27:52 +0000

Predicting ChatGPT's impact on the future of supply chain

larnseth Mon, 06/05/2023 - 11:27

Amidst a sea of generative AI applications, ChatGPT has been a standout thanks to its breadth of knowledge and simplistic interface.

While ChatGPT isn’t the first generative application of its kind, it has set itself apart by possessing a human-like quality when you chat with it – and as a result, many C-level executives are energized by the positive potential AI could have within their organizations.

When it comes to solving issues within the supply chain, Mike Watson, faculty member at Northwestern University, and Polly Mitchell-Guthrie, VP, Industry Outreach & Thought Leadership at Kinaxis, speculate that it may be able to solve complex issues that require ideation and decision-making. Could AI be a game-changer in the industry?

In our latest Big Ideas in Supply Chain podcast, Mike and Polly explore how generative AI models have the potential to refine data, impact productivity, and empower people to develop more efficient supply chains.

Here are some takeaways from their conversation.

Why C-level executives are paying attention to ChatGPT

ChatGPT has captured millions of users’ imaginations despite some of its shortcomings. Even though the application lacks robustness and accuracy, the potential of generative AI programs isn’t lost on the public, or C-level executives.

At its core, ChatGPT uses text to formulate a response when you ask it questions. It does this by predicting what the next word should be based on previous prompts its seen.

Thanks to the program’s success, Mike says its popularity has convinced many organizations to start thinking seriously about AI and what value it can add in terms of increasing productivity. Mike explains, “ChatGPT just took [generative AI] to another level. […] And this gives us another excuse to talk to leadership teams about what this means and how it might impact their organizations and supply chain.”

Right now, ChatGPT is regarded as a personal productivity tool capable of responding to sophisticated search questions. For organizations interested in adopting this type of technology, the application holds a lot of promise in terms of increasing efficiency. Many companies are already exploring building versions designed to meet their unique needs.

For example, Bloomberg released BloombergGPT, which uses its own wealth of data to create a large language model similar to ChatGPT but for finance. “This is our opportunity for supply chain. How can we take all our supply chain data, all our information, […] feed it all in and then we have this natural language interface that I can start to ask questions related to my supply chain,” says Mike. “And then ChatGPT, or whatever equivalent tool, will start to be able to query that database in a very interesting way and bring back data that's very specific to my business, my industry, the kinds of questions that I'm asking. I think that to me feels like the big unlock of all this.”

How generative AI may affect supply chain roles

Many people are still hesitant to embrace AI and automation for fear of losing their jobs, but Mike feels optimistic about AI assisting, rather than replacing, many roles in the industry.

For supply chain practitioners, he views generative AI and automation as tools that can be used to improve ideation and decision-making. “I think what feels to be one obvious use of ChatGPT and similar technology is that the non-coder can now write code,” he says. “In supply chain, there's hundreds and hundreds of decisions that we make, and you can think of each of those decisions, ‘can I write an algorithm to do that?’ and an algorithm needs some code if I want to help automate that. And so, this could unlock the potential for supply chain companies to really start to apply lots of different algorithms in lots of places.”

This ability would help non-coders dive into new opportunities within their roles without losing a significant amount of time or effort. For example, if a code takes 20 minutes to produce through generative AI that can automate a certain task or help form a decision, then the results of the exercise would be positive. Even if the automation fails, there still isn’t a significant loss for the time spent on it.

Despite AI’s ability to potentially help accelerate ideation and decision-making processes in the supply chain, Mike and Polly agree that we aren’t anywhere near a point where human intelligence will become obsolete within supply chain roles. “AI still lacks the three C's, Context, Collaboration, and Conscience,” explains Polly. “It’s indifferent. It doesn't know right from wrong. We have to bring it from right from wrong.”

Generative AI is a fast-developing technology that is still in its early stages of evolution. At this time, supply chain leaders have the exciting opportunity to mold it, so the next generation of ChatGPT-based applications are equipped to resolve supply chain’s most pressing problems.

To hear more about generative AI and its future impact on supply chain from Mike and Polly, watch the full video podcast here:

Be sure to check out other recent Big Ideas in Supply Chain podcasts for additional insights and best practices to take your supply chain planning strategies to the next level:

Display option

Main

Supply chain best practices to mitigate risk and inflationary pressure

larnseth — Mon, 05 Jun 2023 14:49:13 +0000

Supply chain best practices to mitigate risk and inflationary pressure

larnseth Mon, 06/05/2023 - 10:49

By definition, the concept of risk involves uncertainty and brings with it the potential for negative consequences. As every supply chain planner knows, risk is a constant in global supply chains, and can take many different forms. Everything from sudden demand spikes and unexpected regulatory changes to geopolitical conflicts and natural disasters can create significant risks. And if these risks are not dealt with effectively, the fallout can be costly, including delays, shortages, lost revenue, and dissatisfied customers.

In a new on-demand webinar, Bob Ferrari, Managing Director of The Ferrari Consulting and Research Group, sits down for an in-depth discussion on supply chain risk with Kourosh Samini, Senior Industry Principal at Kinaxis and Jim Bralsford, Kinaxis Senior Director, Industry and Solutions Marketing. They discuss the nature of supply chain risk in the post-pandemic era and examine the mitigation strategies and best practices used by leading companies to ensure they’re equipped to thrive in this current period of economic uncertainty and inflationary pressure.

The evolving supply chain risk mitigation mindset

In his extensive work with supply chain professionals around the globe, Bob has seen a significant evolution over the last few years in the way companies approach risks to their supply chains. Before the pandemic made supply chains an everyday topic of conversation among consumers, companies tended to focus their attention on technical and operational supply chain risks. Time to delivery, customer fulfillment, supplier performance and other tactical issues were typically the biggest areas of concern for supply chain practitioners and the targets of their mitigation efforts.

While a tactical approach is still necessary, companies have begun to consider supply chain risks in another context: how they impact the overall performance of the business. Experiences and painful lessons learned during and after the pandemic were key contributing factors to this shift in mindset.

Bob cites the example of Reckitt Benckiser, which experienced a 20x demand spike over a two-quarter period for its Lysol products during the early months of the pandemic. The company relied on a manufacturing plant in Hubei province in China to produce these products. And while it was able to successfully ramp up production from 40 to 400 tons per day, extensive disruptions to global transportation meant that the company experienced severe challenges getting its products to market.

Being able to successfully address one issue (increased demand) didn’t help the company foresee its logistics problems following production. It’s become increasingly clear that considering overall impact of risks is now critical, which is an evolution from the traditional tactical-focused mindset.

Along with this evolution, Bob identifies two specific risks to supply chains that stand above all the others: climate-related risks and cyber security risks. The latter he considers to be the single biggest threat to supply chains going forward, not just from an IT perspective but in terms of the overall risk to the business.

Despite growing awareness of these and other risks among supply chain professionals and members of the C-suite, many organizations still lack effective risk mitigation strategies and tools.

Kourosh cites the recent worldwide chip shortage as a prime example of a disruption that has had far-reaching consequences across a wide variety of sectors. The automotive sector has been hit particularly hard hit by the shortage, and yet many leading companies in the industry are still struggling to mitigate its most damaging business impacts.

As Kourosh notes, “Many companies are still out there, still unable to respond quickly enough to the changing environment. Technically, it means they’re always behind the problem, instead of being ahead of the problem.”

Best practices for risk mitigation

Fortunately, there are proven best practices that supply chain professionals can adopt to help them anticipate risks, assess their exposure to each and take specific actions to mitigate them. In the webinar, the panelists talk about key best practices they’re seeing in the market, such as the importance of running risk-mitigating scenarios at all levels of the supply chain, taking into account all the relevant variables, including potential constraints, financial impacts, and customer promises.

Bob also points to the growing trend among companies in every sector of getting their executives more involved in strategic supply chain issues to help them better understand how these issues may impact key business metrics such as customer service levels, product margins, and profitability.

When companies get risk mitigation right, the benefits are clear, especially as they face inflationary pressure and the prospect of a recession. The right approach means you can make quick, data-driven decisions to minimize the impact of various types of risks, while also driving better performance against the competition.

Watch the on-demand webinar now to get the full story, along with exclusive insights including:

How to define what risk means for the supply chain practitioner, the C-suite and Board
When they get it right, what results are successful companies achieving?
Is risk all about financial performance?

For more on how to manage supply chain disruption no matter what happens, click here.

Display option

Main

Demand as a data science problem

larnseth — Thu, 01 Jun 2023 21:14:58 +0000

Demand as a data science problem

larnseth Thu, 06/01/2023 - 17:14

What is demand? While many have heard of the concept of demand, if you were to ask a random set of people to define it, answers would vary greatly. Those whose knowledge on the topic exceeds no further than a high-school economics course may tell you that demand is the general need for a product among a population.

Someone else who’s taken a microeconomics course at the university level will go into a bit more detail, describing demand as the need for a product among a population, which increases or decreases based on price, if all other factors are held equal. A third person, one who devoted their entire life to the field of economics, will dig deeper into the numerous factors impacting demand, the differences in the definition of demand, and how that can change based on why we’re calculating it in the first place.

In theory, the definition of demand is well established and does not change. Practitioners looking to forecast demand, however, can’t rely on such definitions. Why? It’s simple. Take for example Investopedia’s definition of demand:

Demand is an economic principle referring to a consumer's desire to purchase goods and services and willingness to pay a price for a specific good or service.

Let's talk about that word desire. How do you measure a person’s desire? How do you measure their lack of desire? Perhaps it's a willingness to pay a price. Is this willingness shared across all people for all products? What impacts this willingness? The answers to these questions will determine how accurate your forecasts are.

As a forecasting team, it’s important to have a consistent philosophy regarding how you perceive demand. In this article, we’ll walk through the philosophy we’ve developed throughout the entire machine learning team at Kinaxis, and how this philosophy helps separate us from our competitors.

Is quantity sold a good measure of demand?

What makes the forecasting of demand so difficult is the fact that it isn’t directly measurable. That is, there’s no one function D, where if given inputs {P, X¹, X²,…, X^m}, will give you the value of demand for some product P. Instead, you’ll need to forecast for what you think is the best estimate of demand. Most tend to use a measurable proxy as that best estimate, let’s call this proxy quantity sold (Q) for now.

But how good of an estimator is Q? Is it valid to conclude that the demand of an item is solely determined by the number of people who have bought said item? To answer this question, I like to think of people who sign up for raffles of a limited release. If 1,000 people sign up for the raffle, but only 10 get the product, does that mean the demand for the product was 10, or 1,000? Similarly, if you go to the grocery store with the intention to buy milk, but there’s no milk available, does that reduce the demand for milk on that day by one? Not necessarily. You still had the desire to buy milk, there just wasn’t any left.

This brings us to a conclusion: Quantity sold is limited by inventory, while demand isn’t. To best explain this, consider figure one, where we compare Q, price, and inventory. If we were to assume unlimited inventory, our demand would be different than if we had limited inventory. This is a key point when estimating demand. Considering these cases, where the demand is there but it can’t be fulfilled, is crucial for an accurate forecasting tool.

Figure 1: Difference in Q when inventory is limited versus when it isn’t.

But it isn’t the only limiting factor. Another thing to consider is the stage of the “product lifecycle” an item is at. If the product has yet to be introduced to the market, and sellers want to get an understanding of what the demand for such an item will be, then maybe you don’t even need a machine learning model. Your demand can be estimated via a simple survey. Once that item is introduced to the market, you don’t even have historical data to train your model on; hence, no sense of the change in quantity sold throughout the years.

Note that we’ve been using quantity sold as the proxy for demand. This assumes a specific customer for whom we’re forecasting: retailers. If instead, for example, we were to forecast for a manufacturer, we would no longer use quantity sold as a proxy for demand, but instead, quantity shipped. The difference? There are many. One example is the amount of data. A retailer’s data is significantly larger than that of a manufacturer. Also, there are a lot fewer zeros in a manufacturer’s data. How do you ship zero items? Doesn’t quite make sense.

The conclusion: forecasting demand for one vertical comes with a complete new set of nuances when compared to some other vertical. A “one size fits all” solution is practically impossible to achieve, hence your forecasting solution will have to adapt.

Best estimate of demand

So then, if quantity sold has all these problems, what do we do to forecast demand? We use quantity sold (or quantity shipped, or whatever proxy suits your vertical best). It may not be demand, but it’s the next best thing. And as the old saying goes, all models are wrong, but some are useful. The idea then becomes to try to alleviate all these problems to the best of our ability. And here’s how.

We see demand as a function of three variables:

Opportunity cost: The potential benefits that an individual, investor, or business misses out on when choosing one alternative over another.
Utility: The total satisfaction received from consuming a good or service.
Hidden variables (an error term if you’d like): Any external event causing a shift in demand (for example, a supply chain disruption, or bad weather).

Just as demand isn’t directly measurable, neither is opportunity cost, nor utility, nor these hidden variables. So, we end up with the same problem: nothing is measurable. But we can continue dissecting the three until we get to a bunch of variables that are measurable. Things like the price of an item, the price of an item’s substitutes, the promotions on an item. All of these are features that’ll either increase or decrease the desire and willingness of a person to buy an item, leaving us with a pretty good estimate of demand.

Figure two illustrates this idea and shows how we can end up with an equation for demand (quantity sold) that provides a not-so-rough prediction.

Figure 2: Demand as a function of opportunity cost, utility and hidden variables

Conclusion

Demand is theoretically a well-defined concept. We all have demands. Every time we go to the grocery store or sign up for emails about a brands latest promotions and releases, we’re expressing a certain interest in what someone is selling. We understand our own demands, and what aspects influence our desires.

Things get difficult when we try to predict other people’s demands. We don’t know what others like, what others dislike, what aspects influence other people’s opinions, and how to measure these aspects. That’s what makes demand forecasting so difficult. And in this article, we dove deep into this notion.

We discussed the differences between quantity sold and demand, and how the best forecasting model will understand these disadvantages and make up for them. One point we didn’t touch on in this article is the differences in our forecasting method based on why we’re forecasting demand. Are we forecasting to determine the best promotion to apply on a product? Or are we looking to optimize our inventory management?

Understanding the reason behind a forecast will change the way in which we determine demand, but this deserves an article of its own, so we’ll leave it for next time.

Display option

Main

The role of social media in supply chain management

larnseth — Thu, 01 Jun 2023 13:48:33 +0000

The role of social media in supply chain management

larnseth Thu, 06/01/2023 - 09:48

In recent years, social media has become a potent tool in the business world. Sites like LinkedIn, Twitter, Facebook, Instagram, and others, which have millions of users worldwide, present a special opportunity to connect with suppliers, customers, and partners while also offering vital information on market trends and customer preferences. In supply chain management, social media can be a key tool for fostering collaboration, cutting costs, and raising customer satisfaction.

One of the most significant benefits of social media in supply chain management is its ability to connect businesses with suppliers and partners. Social media operates regardless of location or time zone, which can enable businesses to find and interact with new partners and suppliers outside of traditional business hour restrictions. As a result, lead times could be significantly shortened, so businesses can more easily adjust to fluctuations in demand. For instance, businesses might use social media to find and connect with new suppliers able to quickly deliver essential components, materials, or services.

Social media also provides strong insights into client preferences, which can help businesses improve the efficiency of their supply chains. Businesses can learn about trends, new markets, and client preferences across various demographic groups by examining social media interactions. Supply chain managers can use this data to estimate demand, enhance marketing initiatives, and customize goods and services to cater to the demands of their clients.

Powerful benefits of real-time partner and customer insights

It’s clear that social media can facilitate the network-wide sharing of data and information, which can lower supply chain costs. Also, b exchanging real-time data, feedback, and suggestions, supply chain partners may interact more effectively on social media sites. Supply chain managers can use this to pinpoint areas where they can save money and streamline their processes for improved effectiveness.

Partners can also spot possible supply chain bottlenecks through social media and collaborate to find solutions.

Finally, social media can raise customer satisfaction by increasing supply chain operational visibility. Consumers can follow their orders on social media, connect with providers directly, and provide reviews of their experiences. Supply chain managers can more easily handle consumer concerns and boost general satisfaction by keeping an eye on social media platforms and responding to questions and complaints as they arise.

To summarize, social media has a plethora of advantages for improving supply chain management. Businesses may connect with new suppliers and partners, learn about client preferences, cut expenses, and improve customer satisfaction by using the power of social media platforms. Social media is therefore set to become a more crucial tool for companies looking to build strong and long-lasting supply chains in the years to come.

Display option

Main

LogiPharma 2023: Operationalizing sustainability and resiliency in pharma supply chains

larnseth — Thu, 25 May 2023 18:44:08 +0000

LogiPharma 2023: Operationalizing sustainability and resiliency in pharma supply chains

larnseth Thu, 05/25/2023 - 14:44

In late April, hundreds of pharmaceutical and supply chain leaders from around the world converged in beautiful Lyon, France for the annual LogiPharma conference. Resilience, agility, and digitalization of supply chain operations continued to be top-of-mind and prolific topics throughout the conference. Rather than spend time on lofty hypotheticals, speakers and attendees were focused on real-world goals to operationalize forward-thinking approaches to the industry’s biggest supply chain challenges (and opportunities).

Here are a few highlights from this insightful gathering of pharma and supply chain leaders.

The human element of supply chain management

Kinaxis CEO John Sicard joined a panel with customer Brian Thornley of MSD about utilizing supply chain digital twins to achieve resilience. John shared that the key to achieving supply chain agility and resiliency doesn’t sit with the right technology alone – but rather requires coupling the right technology with more efficient and widely-accepted processes.

Instead of throwing technology at an issue, organizations should ask supply chain professionals, “why are you experiencing this pain?” According to the panel, the most likely answer will be, “because someone ran out of time.” To combat this, John noted the importance of speed in risk detection, saying, “If you can accelerate the time to detect it, you can accelerate the speed to correct it.”

He also shared that supply chains are inherently human, but by automating the obvious, planners are empowered to focus on more complex, value-add work.

EQRx’s RapidStart approach to digital transformation

Ian Howard, Head of Supply Chain and OpEx for EQRx and Director of Supply Chain Planning for EQRx, Lou Lozanov shared a session on how they jumpstarted their supply chain digital transformation with the Kinaxis RapidStart approach. They talked about how their digital transformation eliminated the guesswork needed to manage their supply chain. Now, they can “understand the root cause of a risk and then figure out how to mitigate it.”

Lou Lozanov, Director of Supply Chain Planning at EQRx, onstage during his supply chain transformation session.

EQRx is a start-up in the midst of bringing its products to market, so the company is necessarily cash conscious. That’s why concurrent planning has been a strong fit for the company’s needs, according to Lou. “We can pinpoint millions in cost avoidance due to our S&OP cadence with Kinaxis and can escalate issues more efficiently to our executive leadership.”

Trend throughlines at the conference

Supply chain sustainability was a recurring, key topic at the conference, as attendees sought insights regarding how to balance the necessity of good patient outcomes with environmental impact.

Fortunately, some innovative ideas to tackle the issue were discussed by panelists. During a logistics panel, there was talk about utilizing cargo shipping for pharma transport. While pharma hasn’t traditionally been considered a good lane for transport due to container volume requirements and slow-moving nature, organizations are starting to consider cargo transport more seriously. After all, it could potentially be a way to cut costs and decrease the heavy environmental impact of air freight. Panelists agreed that, in general, this option is better for high volume, low risks products, but there was also an interesting conversation about partnering in container splitting to optimize the space utilized in the container and still meet delivery targets.

I think this speaks to a broader trend of companies seeking to expand partnerships in areas that may be viewed as a competitive disadvantage; but doing so is a creative way to address the sustainability requirements of governments, organizations and consumers.

Another intriguing sustainability topic was shifting away from printed leaflets with drug shipments, which is currently a requirement of most drug ministries. Moving to a QR code approach on a bottle could not only decrease paper waste but also help decrease the jurisdictional control requirements – for instance, if a single QR code could redirect to drug information in multiple languages.

Kinaxis CEO John Sicard joins other executives on a supply chain digital twins panel discussion at LogiPharma 2023.

Personalized medicine delivery was another popular point of conversation, especially regarding cell and gene therapy. In a panel, an audience poll showed a likely move toward a personalized approach, but the percentage of the audience’s business expected to be dedicated to this model varied. The panel also acknowledged the low volume, high costs of personalized medicine as prohibitive toward adopting a broader effort in this area, at least in the near term. That said, it will be interesting to follow how the model works out over time for the pharma manufacturers already delivering personalized medicine, including for rare disease treatments.

Overall, LogiPharma 2023 was an outstanding event. It was packed with thought-provoking content regarding supply chain planning in this complex industry, and it was a fantastic opportunity to meet so many of our Kinaxis pharma customers.

If you’d like to read further on supply chain management’s largest challenges this year, be sure to check out 12 supply chain trends to watch out for in 2023 by Matt Spooner.

Display option

Main

Trace

hdiniz — Wed, 24 May 2023 19:16:13 +0000

Trace

hdiniz Wed, 05/24/2023 - 15:16

Contact Trace

Reach out to learn more, ask questions or request a meeting.

GET IN TOUCH

Partner Type

System Integrator

trace. is a new firm with a long history. As a boutique supply chain consulting firm, we help our clients build operational excellence, leverage technology, and improve sustainability throughout their supply chains. Practical & results oriented, we have experience across many industry verticals, including health and aged care, Defence & MRO, retail, FMCG and manufacturing, and events, property, and hospitality. Our services cover the end-to-end supply chain, including strategy and network design, planning and operations, warehousing and distribution, advanced systems implementation, performance management, supply chain resilience and sustainability, and project management and governance.

www.traceconsultants.com.au

Partner Region

Asia Pacific

Avalon

hdiniz — Wed, 24 May 2023 17:47:35 +0000

Avalon

hdiniz Wed, 05/24/2023 - 13:47

Contact Avalon

Reach out to learn more, ask questions or request a meeting.

GET IN TOUCH

Partner Type

System Integrator

Avalon specializes in delivering supply chain consulting services across all industries and business functions. Composed of industry experts, we deliver supply chain solutions to accommodate present and future challenges of our clients.

With a comprehensive set of partners, Avalon strives to be a leader in delivering quality supply chain solutions that create exceptional value for our clients. Our services offerings are designed to assist our clients generate revenue, reduce costs and access the information necessary to operate their business on a timely basis.

As an extension to your team, Avalon can assist you in:

Supply Chain Strategy
Planning & Inventory
Warehouse Operations
Manufacturing & Maintenance

www.avaloncsc.com

Partner Region

North America

Build resilience into all supply chain decisions

larnseth — Tue, 23 May 2023 14:36:41 +0000

Build resilience into all supply chain decisions

larnseth Tue, 05/23/2023 - 10:36

Disruptions caused by COVID drew more attention to supply chains than ever before. But even before the pandemic, supply chain planning practices were changing toward leaner models in a quest for more efficient supply chains.

However, decisions that were made to create leaner supply chains came at the cost of resiliency. It wasn’t long before these new supply chain planning practices led to instability and ultimately higher costs as companies around the globe reacted to disruption. So, how do you create supply chain stability and still be successful when the world is unstable?

To discuss why and how to build resiliency into supply chain decisions, Mike Corbo, former Chief Supply Chain Officer of Colgate-Palmolive, joins Board Member and Supply Chain Innovator Angel Mendez and Kinaxis Chief Strategy Officer, Dr. Anne Robinson, in part two of their Big Ideas in Supply Chain podcast conversation. (Watch part one of this series hosted by Angel and Anne.)

Here are some of the takeaways from their discussion.

Lessons from COVID

COVID was a learning experience for supply chain practitioners. Previously, if there was a disruption like an earthquake or fire, supply chain practitioners would ask, “What is the expected duration? How impactful is it? How wide of an impact is it?” With COVID, there was no idea of duration, it had worldwide impact, and it affected every part of people’s lives.

To an experienced supply chain practitioner like Mike, the key to weathering this major disruption happened over a decade before the pandemic began. He says, “We had spent a good decade on risk management. Having back-up supplies. We started changing suppliers and validating people in record time.” Mike, who has over 40 years of supply chain experience, notes that it was part of a playbook the company developed to manage disruption. Being able to quickly add and change suppliers helped Colgate-Palmolive succeed in the short term.

The other shift that took place at Colgate-Palmolive had to do with decision-making. With multiple breakdowns occurring at the same time, the company couldn’t wait for all decisions to be made by the Chief Supply Chain Officer. Early in the pandemic this hierarchy of decisions was changed, empowering other practitioners to make decisions so one individual wouldn’t bottleneck the process. This drastically improved efficiency which helped Colgate-Palmolive reduce reaction time from 60 - 90 days to only 7 - 8 days.

Not only did this approach allow for Colgate-Palmolive to grow revenue during this time, it increased C-suite focus on the supply chain. This allowed Mike to reinforce his message of stability to shareholders and the Board of Directors. “Costs aren’t going to come down anytime soon, but if I can procure things in a stable way, we could start to stabilize the outcomes,” he says.

Balancing resiliency with efficiency

Creating supply chain stability in an unstable world is no easy task, but the great news is it’s possible with the right planning.

Mike says the key lies in balancing efficiency and resiliency. Previously, companies tried to make their supplies chains too lean to maximize efficiency. By trying to make things cheaper and cheaper, companies began to let cracks form, reducing how resilient their supply chains were. And when disruption happens, that kind of foundation can fall apart.

To create supply chain stability, Mike suggests you need to have resiliency built into all your decisions. This will result in certain losses of efficiency — building in redundancies and planning for multiple variations of something may increase costs. But it also can prevent major disruption. Mike recalls Colgate-Palmolive’s shift from single-source suppliers and the impact it had: “Sometime around a decade ago we started to unravel that and said we have too many single-source suppliers, started to get redundant suppliers, (so we) moved the business to multiple sources. That really served us well, because the people that were stuck with one supplier out of China for their supply chain were dead.”

Preparing for tomorrow

Supply chain leaders of tomorrow will need to perform their own balancing act, Mike suggests. For supply chain planners, a balanced approach between cost and service must be accompanied by having their voice heard on the revenue side. They must suggest innovative ways to drive revenue on a consistent basis and create opportunities to drive more revenue. “We can’t just be put in a cost basket and kept to the side. And there’s where it came from, but I’m very hopeful that’s not where it’s going.”

To hear more from Mike, Angel and Anne about building resilience in supply chain decisions, watch the full podcast now:

Don't forget to check out more of our insightful Big Ideas in Supply Chain podcast episodes here!

Display option

Main

Kinaxis

Consumer Products Industry Webinar

Consumer Products Industry Webinar

Ferrari Group April 2019 Research Report

Ferrari Group April 2019 Research Report

Predicting ChatGPT's impact on the future of supply chain

Predicting ChatGPT's impact on the future of supply chain

Why C-level executives are paying attention to ChatGPT

How generative AI may affect supply chain roles

Leave a Reply

Supply chain best practices to mitigate risk and inflationary pressure

Supply chain best practices to mitigate risk and inflationary pressure

The evolving supply chain risk mitigation mindset

Best practices for risk mitigation

Leave a Reply

Demand as a data science problem

Demand as a data science problem

Is quantity sold a good measure of demand?

Best estimate of demand

Conclusion

Leave a Reply

The role of social media in supply chain management

The role of social media in supply chain management

Powerful benefits of real-time partner and customer insights

Leave a Reply

LogiPharma 2023: Operationalizing sustainability and resiliency in pharma supply chains

LogiPharma 2023: Operationalizing sustainability and resiliency in pharma supply chains

The human element of supply chain management

EQRx’s RapidStart approach to digital transformation

Trend throughlines at the conference

Leave a Reply

Trace

Trace

Contact Trace

Avalon

Avalon

Contact Avalon

Build resilience into all supply chain decisions

Build resilience into all supply chain decisions

Lessons from COVID

Balancing resiliency with efficiency

Preparing for tomorrow

Leave a Reply