Last Year’s Black Swan Event Felt Like a Flock of Black Swans
Supply chain professionals are wrestling with many questions as we emerge from the year of the pandemic. Among them: What can we do to prepare for such extreme demand variability? How can we engage executives and drive home — once and for all perhaps — the importance of bold action, process improvement and enabling technologies?
Fortunately, a pair of industry experts recently weighed in on these topics and more, and you can watch the webcast on demand here. In part one of our two-part series, Logility’s executive vice president Mac McGary and Supply Chain Insights founder Lora Cecere discuss what it means to ‘deliver better business outcomes’ in 2021. Supply chain gurus Mac and Lora share insights into the main drivers of demand variability in today’s markets and offer ways to address this variability.
Of primary importance is “learning to unlearn,” discarding or at least reframing tired, didactic arguments. We need to “build better,” which includes sensing market signals instead of gazing in the rearview mirror at order and shipment data. It is possible to drive accuracy at the speed of the market, but it takes courage.
In addition, Lora and Mac emphasize the importance of the following:
- Driving market value through S&OP. Start with assessment. How balanced are you across the S and the OP? And don’t forget the ampersand — remember to focus on markets, not just products.
- Don’t settle for simple and vague. Example: despite plentiful data and modern tools, everyone says they want more supply chain visibility. Visibility of what? There are many things to see and understand in a global supply chain. Make a list. But be ready to USE that new-found visibility to make data-driven decisions.
- Achieving organizational alignment. Many organizations still exhibit some form of tribalism. Create KPIs focused on company strength rather than traditional departmental/functional goals. Respect the tension between commercial teams and operational teams and create feasible plans.
It took a Black Swan event and the resulting unprecedented demand roller coaster to provide the urgency needed for an invitation to the top floor. Never waste a crisis. It’s time to show the value of clear guidance codified in playbooks, modeling, constraint-based analyses, clear metrics, inventory strategy, and designing the supply chain. The very best practitioners know they are on a journey, and they’re continually learning.
“I want to get us out of buzzword bingo and really focus on capabilities and help people to understand that the supply chain is a complex non-linear system, which means that if I move something like asset utilization, it is not a simple trade-off. There are many cause and effect relationships in play, and you can’t see that in an Excel spreadsheet.”
Lora Cecere, Founder and CEO, Supply Chain Insights