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My Take: The 6 Fundamental Supply Chain Disciplines

By Mike Detampel  July 24, 2015

I recently saw a report from LEGACY Supply Chain Services, CSCMP and Adelante SCM on the “6 Fundamental Supply Chain Disciplines that Retail Leaders of Tomorrow Must Master.” While this particular piece of research speaks about key elements and how they apply to retailers, I think the message applies more broadly to a number of industries. The research calls out six main disciplines that will be essential for supply chain success. I largely agree with many of the key factors, but there are some additional considerations for each of these, especially as they relate to supply chain design.

 

Supply chain visibility.

Visibility into what is going on in your supply chain is absolutely essential for any business to operate efficiently. And while real time visibility is critical to operational decision-making, the same underlying data serves as a foundation to performing supply chain design and what-if analysis. Without an accurate picture of your current-state supply chain, companies could be leaving thousands if not millions in cost savings on the table simply as they aren’t sure where to find the information they need to conduct those analyses. As the report notes, this is easier said than done. Disparate systems, lack of accountability, and little to no technology supporting these activities can all play a role.

  • What should you do about this? Invest in collecting, validating and structuring data so it is readily accessible for your supply chain design activities
  • Automate data blending and model building for simplified analytics and optimization

 

Supply chain mapping and visualization.

An accurate and detailed visualization of your supply chain can not only help your team make correlations between different pieces, but it’s also a key piece in securing buy-in from your leadership. The C-Suite doesn’t have the time to spend analyzing spreadsheets and assessing businesses cases. You may have unlocked the key to millions in savings, but unless you can secure buy in from the executive team the status quo may hold. Visualization can provide a quick, resonate and accurate depiction of the impact of your proposed strategy.

What should you do about this?

  • Establish “baseline” supply chain models and metrics that allow you to monitor supply chain performance and evaluate alternative strategies
  • Complement your supply chain database with a strong analytics toolset that can quickly generate location- and flow-based maps and visualizations

 

Supply chain risk management.

Natural disasters, strikes, capacity shortages, legislative changes – there seems to be a new challenge around the bend every month for supply chain professionals. By utilizing supply chain simulation and running a variety of what-if scenarios, companies can test out strategies that will help them mitigate risks within the safe confines of the modelling environment. Also, by doing that leg-work up front, when faced with one of those challenges, these savvy organizations can sail through and thrive.

What should you do about this?

  • Develop current state models of your supply chain along with automated model builders that allow you to quickly refresh and restructure your models to quickly analyze the impact of unplanned events
  • Use scenario planning to “war game” known risks to assess their impact on your supply chain, and your options to respond to them

 

Supply chain design.

While in the past the practice of supply chain design was viewed as a once-a-year network optimization project, more and more organizations are seeing its value on a continuous basis. Smart companies are not only utilizing the technology for large strategic initiatives but also to increase efficiency in their day-to-day tactical operations.

What should you do about this?

  • Establish a Shared Service Center/center of Excellence for supply chain design
  • Focus on supply chain design as a repeatable/continuous process
  • Get involved in the supply chain design community – Seek advice from companies at different stages of COE development

 

Supply chain business intelligence.

The research notes that this is about empowering people across the organization to make faster and smarter decisions. This is absolutely true, but many of those decisions hinge upon the quality of data you are using. Finding that data can sometimes seem nearly impossible. Data analytics tools can help cleanse your data and automate processes to help your team work more efficiently while also maintaining accuracy.

What should you do about this?

  • Ensure that supply chain design and analytics requirements are explicitly considered in the implementation of your BI projects
  • Invest in talent that combines analytics and business knowledge
  • Implement supply chain design tools that enable you to translate supply chain data into actionable results

 

Talent retention and workplace culture development.

We’ve discussed the race for talent in the supply chain industry. Organizations can’t just hire anyone to work as a supply chain analyst. The global market is making today’s supply chains increasingly complex and there are new philosophies, technologies and challenges entering the fray every day. So not only do companies need to appeal to attract the top talent, they need to develop a sound company culture, career advancement and coaching policies to retain the best of the best.

What should you do about this?

  • Develop a career path that fosters and rewards analytical talent
  • Invest and training and coaching to develop supply chain design mastery
  • Encourage your team to actively engage in the broader supply chain design community

 

This covers the six disciplines mentioned in the research, however, I would add one more: supply chain collaboration.

It can be easy for teams within an organization to operate in silos. This can happen for a variety of reasons: geographic distance, disparate management styles, differences in organizational priorities and a whole host of other factors. However, one thing that we hear from our customers time and time again is the added value they can drive when they collaborate with other teams, other geos, even their suppliers when making both strategic and operational supply chain decisions. Collaborative modeling can enable organizations to find connections that result in benefits, discrepancies between processes and define best practices. Additionally, as the field is advancing and changing every day, collaborative modeling teams serve as a great sounding board for challenges and idea-sharing for push the industry forward.