Making Sense out of “Sense and Respond”

With so much focus across industry publications, analysts and conference sessions around “Sense and Respond” how do you separate the noise from the critical points you need to consider as you mature your supply chain operations to take advantage of these capabilities?I find it best to start with an analogy. The phrase “Sense and Respond” is used in several industries including one from my past: military aerospace industry. Here the term “Sense” means to identify a potential threat and “Respond” means to analyze the threat and take the appropriate actions. If these two capabilities operate independently of each other, for example where an aircraft may only be able to sense a threat and not respond accordingly, that aircraft won’t survive very long. It must have the ability to act based on the information it has gathered.

The Northrop Grumman E-2 Hawkeye is an American all-weather, carrier-capable tactical airborne early warning (AEW) aircraft that works in tandem with Navy attack aircraft like the F-14 Tomcat (made famous by the movie Top Gun), the F-18 Hornet, and the new F-35C Lightning. All of these have systems that can sense, evaluate and respond to a threat. The E-2’s ability to sense is far superior to that of other fleet aircraft. However, it is also able to direct other aircraft to respond to what it senses. Like your supply chain, aircraft need the ability to both “Sense” and “Respond” in order to survive.

We hear a lot of discussion around sensing and the need within organizations to improve these capabilities. At the same time, we need to ensure just as much thought goes into the responding side of the equation. Creating a sensing system for your supply chain is a worthwhile goal if you also have a means of utilizing the data it obtains. In other words, companies need to move beyond firefighting and take advantage of the visibility information for more strategic, forward-looking planning and optimization. The key ingredient is the ability to analyze the data to develop “What-If” scenarios in order to make better decisions by extrapolating the impact both up and down the supply chain. This deeper meaning for “Sense & Respond” allows you to go beyond reactive decisions to start making optimized, proactive decisions that deliver true positive impacts for your company.

While data collection is important, more critical to your operation is the ability to analyze and respond using an integrated supply chain planning, optimization and execution system that prioritizes data, clearly visualizes the supply chain impact, provides the capabilities to fully analyze the data, and allows you to conduct “What-If” scenario analysis to identify the optimal path forward. In fact, many pundits argue, and I agree, that a company should focus first on establishing efficient and effective integrated planning and execution processes and systems prior to investing in sensing / visibility capabilities. Why? A focus on sensing will allow you to collect vast amounts of data, data that can’t be used because the systems and processes in place to do so don’t exist. Your team will become frustrated. Instead, establish the right process, talent, technology, and culture to support capabilities like “Single View of Demand”, “Enhanced S&OP”, and “Enhanced Feedback Loops from Planning to Execution” before focusing on visibility.

Now, the next time you have a conversation around Sense and Respond I bet an image of Top Gun will pop into your mind. You too, with the right focus, systems and processes in place, can sense and respond like Maverick.

Where is your company in the Sense and Respond journey?  What challenges and opportunities have you encountered?

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