In my first blog I wrote about the first step to reaching a Stage Five Supply Chain Planning System of Record (SCP SOR) which was securing the right talent.
Step Two is about achieving functional excellence (or is it?).
SCP SOR Building Blocks What is the necessary foundational planning layer required to support demand/supply planning for your industry? There are specific functional requirements necessary for supply chain planning. The short list includes:
In more detail this can include:
- Statistical Forecasting
- Demand Management
- Capacity Planning
- Inventory Planning
- Production Planning
- Customer Co-planning
- Supplier Collaboration
- Order Promising
Over the years, you have likely evaluated multiple vendors on their functional capability. However is this enough? Is it really about evaluating and optimizing each individual process? And if everyone has the same building blocks what makes you unique? The maturity of your supply planning processes will differentiate you. From my experience, the more mature supply chain organizations are focused on the integration of the functional capabilities, rather than solely on the individual function itself. They recognize that the whole is greater than the sum of the parts. They often have differentiated and cohesive processes that they incorporate into their planning platform. This requires a SCP SOR that is configurable. The Technology vendors all sound the same! Finding the right SCP SOR technology solution is not easy especially when numerous vendors claim to provide all of the functional capabilities. Having been in management positions in supply chain in my former life, I encourage you to ask vendors to prove it. Proof of concept workshops provide you the confidence you need to make the right decision. I have always believed that it isn't WHAT these vendors can do but rather HOW they do it. The complexity, volatility and global nature of the supply chain require unique approaches to the HOW.
- HOW will I make collaborative decisions?
- HOW will I evaluate business tradeoffs?
- HOW will I respond effectively to change?
- HOW will I continuously monitor my supply chain?
A wise man once told me that the supply chain is the bank of the company. I agree! Supply chain leaders can drive breakthroughs in corporate performance – growth, productivity, profitability and overall shareholder value. Choosing the right SCP SOR can transform your company. I also encourage you to consider every individual contributor in your organization. What do they personally need to be successful? If you provide your people with what they need when they need it and in a format that they can easily work with, good things will happen. Empower the many, not just the few. I recall a Site Director once asking me how I was reducing inventory so quickly. What new initiative had I implemented? My reply was simple. I empowered my team with the right information to effectively do their job. They were able to make decisions quickly and effectively. People inherently want to do good work and are often crippled with technology. Call to Action Much of what I am writing is common sense. Unfortunately for many years I have seen executives bow to political pressure or take the ‘follower’ approach with the big name vendors. Today’s supply chain challenges require disruptive leaders selecting disruptive (but proven) technology. Lora Cecere wrote a great article ‘Reflections on Integrated Supply Chain Planning’ where she has collected data validating that companies are deploying solutions from industry leaders and they are not delivering results. Perception is not reality. It is a great read.
In the next blog I will elaborate on the point I made above ‘The whole is greater than the sum of the parts’. Look for Step Three to Stage Five SCP SOR ‘Connecting the dots’.
Looking for more information about Supply Chain Planning System of Record? Check out the rest of the series!