By Andrew Dunbar. Originally published on the Kinaxis industry blog, 21st Century Supply Chain.
Google “Top 10 supply chain challenges” and you’ll find 44 million different opinions on the biggest issues our industry faces today. Many are filled with our favourite industry buzzwords: visibility, risk management, cost pressure, the Internet of Things, security threats… and the list goes on. These are all interesting and catchy concepts but they don’t necessarily address the fundamental challenges faced by your supply chain organization. A common mistake when developing a supply chain strategy is to select some key initiatives or technology platforms and a list of best practices, and work backwards to highlight the business problems you’ll solve with your plan. If this is your approach then the Boston Bruins aren’t the only one’s putting the cart before the horse (go Sens!).
I like the approach recommended by Peter Bolstorff, Supply Chain Council Executive Director with APICS. He recommends a fundamentals-first approach to strategic planning and suggests focusing on three basic challenges:
- Rate of supply chain planning
- Resource management in a global organization
- Real time transformation of data into competitive insight.
The engineer in me loves the idea of designing a strategy beginning with first-principles and the business analyst in me is glad to see the challenges worded as business problems, instead of technology platforms. In the end, you may come up with the same plan you had when working from the solution backwards, but if you start with your business’s key challenges you can make sure nothing gets lost in translation.
Here’s my take on Peter’s three supply chain challenges:
- Rate of planning – This is a big one if you’re going to survive in today’s environment. If you’re still using MRP to make your supply chain planning decisions you’re in serious danger of getting edged out by your competition. Think your MRP system is working just fine? Check out this video from the Demand Driven Institute and ask yourself if this case sounds familiar: The Conventional Planning Puzzle – Just How Crazy Does MRP Make Your Life?
- Resource Management – Do the people you employ have the training to make the right decisions and to understand the impact of their decisions on the rest of your organization? It can get pretty ugly if your supply chain personnel doesn’t have the training to even identify the deficiencies in your organization. Supply chain planning systems are incredibly complex and if you’re not ensuring your team are experts with the tools you give them, then you can’t possibly get the most out of your investments.
- Competitive Insight – Do you have the ability to perform real-time simulations and clearly define the impact your planning decisions have throughout your organization? Taking that one step further, do you have the ability to act on that insight? Dashboards, metrics, scorecards, alerts, and collaboration tools are a must-have if your supply chain is going to give you a competitive advantage.
Do you have fundamental supply chain challenges that aren’t mentioned here? Let us know in the comments.