Here is a “Selfie” of Your Supply Chain – Is it Time for a Makeover? JDA Vision 2015 Supply Chain Market Study

JDA just released its first JDA Vision Supply Chain Market Study based on a third party global survey of supply chain executives like you. Responses came from 17 countries across a broad range of industries and company sizes. There are many thought-provoking insights in the report concerning business issues affecting production planning, demand management, supply chain integration and transportation management. No doubt it reflects many of the challenges you are facing today—a sort of supply chain “Selfie,” if you will. I encourage you to read this report to learn what initiatives your peers are working on over the next 12 months.

One of the findings that struck me as significant was the large gap between the aspirational goals of supply chain executives and the technology they have available to support those initiatives. For example, 62 percent of responding companies still use spreadsheets for production planning and scheduling, and consequently, a like percentage selected as their top challenge the amount of re-planning they have to do to respond to volatile market demand. Even close to 50 percent of large companies (those with greater than $5 billion in revenue) are still using spreadsheets.

A similar finding that surprised me was that across virtually all functional areas—demand planning, production scheduling, inventory management— the lack of integration between an effective S&OP process and function-supporting technology was both a top concern and a top reported initiative for the next 12 months.  And I know if you’re a retailer, you don’t think in terms of S&OP, but your struggles matching volatile consumer demand to replenishment processes amounts to the same thing. Clearly, more accurately matching supply and demand is a major focus for companies in 2015.

Two more findings from the report—that 74 percent of companies have not yet established a centralized shared services model or control tower approach for transportation, and that only 43 percent of companies use a commercially available transportation management system—indicate that you may be fighting today’s much more complex supply chain battles with yesterday’s processes and systems. However, the executives polled recognize this fact and are investing in new processes and technology this year.

I think one of the culprits that have slowed the necessary transformation is the LEAN culture that has permeated business over the past decade. Don’t get me wrong, I fully support LEAN processes such as eliminating waste and continuous improvement, and JDA systems help customers achieve these goals. But the world has changed too dramatically over the past decade for continuous improvement alone to enable companies to address today’s supply chain challenges.

For example, omni-channel commerce wasn’t even a concept a decade ago. Now no retailer or CPG company can survive without supporting omni-channel commerce and fulfillment. A decade ago China was thought of as just the world’s low-cost outsourced manufacturer. Today China is the world’s biggest marketplace. A decade ago supply chain was solely focused on delivering products at the lowest possible cost. Today it is a strategic weapon for increasing growth through its focus on delivering the best possible user experience across all channels.

Therefore, if there is one thing the Vision report makes clear, it is that continuous improvement alone in processes or systems will not be enough to become or remain a leader in today’s much more complex and volatile marketplace. It will require a complete makeover in supply chain models and technologies.

To achieve this makeover, you must reorganize your thinking, processes and systems around the customer instead of around products and channels. Demand sensing at the point of consumption will replace historical, shipment-based forecasting. Single, real-time visibility to all inventory will replace separate inventories by channel. Siloed operations will be replaced by seamless, integrated, and constraint-aware omni-channel fulfillment that provides a superior shopping experience profitably.

This makeover will not be easy, but leading supply chain executives are starting the process now. Shouldn’t you? Read the JDA Vision 2015 Supply Chain Market Study to find out what specific initiatives other executives are taking.

  1 Comment   Comment

  1. Michael Jackson

    I still advocate the use of creating simple spreadsheet in certain environments. In retail, a spreadsheet can produce data that one can sort and see what is selling the most. It’s probably due to my age (late 50’s). I get more out of the numbers than I do pretty charts that most software produces.

    Reply

Leave a Comment