The Trifecta of Supply Chain Success: Outsourcing, Data and Learning – Part III

As part of our Expert Insight series, Supply Chain Nation recently sat down with Gordon Wade, chief executive officer and director of best practices for the Category Management Association.

In Part I of our conversation with Gordon, he discussed the key markets shifts that are increasing complexity in the supply chain – and that retailers and manufacturers must address in 2014. In Part II, Gordon discussed how supply chain personnel issues can be solved using cloud-based pods.

In Part III, Gordon discusses the benefits of a cloud-based pod solution to personnel challenges in supply chain solutions and the importance of handling the increasing data supply chains and consumers are creating, all while continuing to learn and grow your team and company.

SCN: Gordon, in last week’s blog interview you introduced a solution to the personnel challenges many companies face with their supply chain teams – the idea of a cloud-based pod. Can you tell us more about the benefits of a cloud-based pod as you see it?

Wade: A cloud-based pod tends to be scalable because of the nature of the pod, the nature of what the people are doing and how they do it. It’s stable. It’s scalable. It’s fault-tolerant. In most instances, highly fault-tolerant. Things don’t break. The Pod team is there to find solutions to challenges. With a pod team, knowledge cascades down to both organizations, both the provider of the information and the recipient of the information, increasing the speed of learning.

The biggest single advantage of this is that it saves everybody time, especially the internal managers at the manufacturer or the retailer. The most precious commodity that we have in life is time. It’s the irreducible asset. When it’s gone, it’s gone. You can’t get back the last 15 minutes, and everyone is time starved in our society today.

Now, the cloud-based pod is just there to solve problems. That’s one of their basic advantages. And because they solve problems, they give you back some time to think about solving your business challenges rather than having to worry about a problem with your software or finding out that your truck is lost and you don’t know where it is, or there’s something wrong with next month’s forecast due to an input or output glitch that you ought to be able to overcome without suddenly turning yourself into a software expert. So it gives you more time to do what your paid to do: create solutions to solve business problems.

SCN: How are these cloud-based pods organized, what makes up a pod team?

Wade: In your cloud pod, there are analysts who serve various functions such as, in-store planogramming or forecasting. They interface with the internal team from the manufacturer or the retailer. They then serve the respective in-house teams— whether it’s the factory or the warehouse or the store—take care of a set of tasks and address any problems that may come up.

So these are real and extremely smart people who have the capability to optimize the functionality of the software. In many cases, people just don’t know how to use the full breath or depth of the software. So the cloud pod functions with your team to achieve your goals.

SCN: Bringing in a team of experts sounds like a great solution, why aren’t more companies getting outside help with their supply chain functionality?

Wade: Whenever I have this discussion, I realize I’m dealing with another problem, and that is the natural human tendency for companies to want to do it themselves. I think we’re all prideful people, certainly I am and I like to do things myself, and there’s a natural tendency for manufacturers and retailers to say, “I can do this myself.”

This natural human insistence on wanting to do it yourself has to be overcome. If you need a rationalization for getting a third party to do something like this, consider that this is an old and honored tradition and practice, certainly in consumer packaged goods and, I believe, in retailing and manufacturing in general.

Take co-packaging as an example— that is to say another company making my products —it used to be fairly rare, but it happens all the time now. Retailers are developing private labels. Virtually all the U.S. retailers have sold their manufacturing capabilities or spun them off and the co-packaging is done by third parties, just like package design work. Years ago, package design was done in-house. Today, they’re gone. That’s all done by outside contractors.

Another example is sales brokers — brokers can be a very effective, and highly efficient low cost way to cover specific classes of trade. If your product is sold in a convenience store in the U.S., you have no prayer of covering all of the diverse convenience store sites or owners in the U.S. You have to go to a sales broker. Using sales brokers is just a more efficient way to operate.

SCN: Gordon– outsourcing really is an integral part of the industry. What about staying on top of all the data that is now being generated in Supply Chains?

Wade: I believe in the concept of what I call data Darwinism, which means that to survive and thrive you must do the best job of learning how to handle data. I think that speed of learning is the only truly sustainable competitive advantage. The faster you learn, the faster you deploy and apply what you’ve learned; the better off that you are, so everyone needs to try to accelerate speed of learning. So speed of learning is a critical issue, and the cloud-based pod system, the pod approach that JDA has developed, is a competitive advantage to achieve greater learning

I’ll leave you with a parting thought from the great Englishman, Charles Darwin, certainly one of the five most important people who’s ever lived on earth. “It’s not the strongest of the species that survives, or the most intelligent. It’s the one that is the most adaptable to change.”

And my message to you is this: If you want to survive, you need to think about getting third-party help in managing your data. If you don’t do that, you’re going to be more stressed, and you probably will not get the quick results your business and your customers need. It’s clearly something that you’re going to have to confront. So just go get the help.

Would love to have you share any results you’ve experienced using cloud-based pods to overcome business or customer challenges. I’m always interested to hear how businesses are adapting to new technologies and approaches to support their strategic objectives.

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