Supply Chain Performance Index

A Thorny Topic

by Lora Cecere on April 10, 2012 · 0 comments

As I wing my way west for a couple of conferences, I am sitting in seat 2C with a bright pink notebook sitting on my lap. I am SO excited about my pink binder.  It contains my manuscript for the book Bricks Matter that will be submitted to Wiley this week.   I have written the book with Charlie Chase from SAS, and we are both excited to get it finished.  It is now too heavy to carry in my shoulder bag.  As I near the finish line for an August publication date, I give a sigh of relief….  It will be good to get it done.  Starting a new company and writing a book at the same time has been quite a challenge. <This is a blog post all within itself.>  I appreciate all of the people that have supported me in this effort.

I did not blog last week because I was too busy with book edits (sorry), but I think that I will be more prolific this week. I feel it coming on. I will be tweeting from the Ariba conference in Vegas tomorrow and on Big Data Analytics at the Teradata Influencer conference on Thursday/Friday. I have a couple of blog posts dancing in my head right now.  Let’s see what finds its way through my fingers to the keyboard onto the page.

I also had a great meeting with 7Summits to discuss the Supply Chain Insights Community.  As many of you know, I am launching a Supply Chain Community using Jive software that will feature user-based ratings and reviews of software providers and consultants, benchmarking data, job postings, discussion groups and training materials.  My goal for the community is for it to be the first stop for your supply chain team to learn, share and evolve.  The community will be free for all, and I hope that each of you will start to spread the word.  When we push out the link to join, we want to see you and hear your voice.

Here I finish the post that I started at the end of the IBP IE event in Miami two weeks ago. The presentation can be accessed at http://www.slideshare.net/loracecere/presentation-given-at-ibp-presentation-miami-march29.  I am currently preparing for an upcoming presentation at their San Francisco event (http://operations.theiegroup.com/sop-hightech) next week (April 17-19th).  I have finished analysis of the high-tech industry over the last ten years for this event and will share the insights next week.

In Miami and in San Francisco, my presentation has the same title.  It is called a “A Rose is but a Rose.”  It is an industry twist on the same theme.  <I give Shakespeare credit for the inspiration for the title.> In the presentation, I focus on the fact that you can call S&OP any name you want, but you cannot avoid the thorns.  While there are lots of names for S&OP processes, there are no thornless roses.  Each process carries the same issues. They are largely change management. So, in this blog post, I thought that I would continue the discussion with insights from the conference on the theme. In this post, I discuss the five thorns that I see in S&OP processes regardless of the name:

Thorn #1. It takes Time.  Build Patience. Perseverance. Tenacity.

To prepare for the book Bricks Matter, I interviewed 75 supply chain pioneers.  These were experienced supply chain professionals reflecting on the last thirty years of the evolution of practice.  One of my favorite quotes came from Marty Kisliuk from FMC.  For those of you that know Marty, you know that he is always pushing the envelope.  Marty spoke about the need for patience and how to build a guiding coalition within the organization to let change happen.  He spoke about how change does not happen quickly.  In his words:

“No real impact can be made in a supply chain in less than three years.  It takes time.”

Marty Kisliuk, Director of Global Operations and Business Development, FMC Corporation Agricultural Products Group

As I listened to the presentations at the Miami event, Marty’s words rang in my head.  At the conference, presentation after presentation had a start date from the 1995-2002 period.  So, if you are preparing to start working on a S&OP journey, prepare for a long road.  Build the expectation early with your management team.

Thorn #2.  The Lack of Clarity of Supply Chain Strategy.  I have just pulled the first Supply Chain Insights quantitative study from the field.  As I review the write-in answers on the question “What is your largest barrier to supply chain excellence this year?”,  I see more responses of companies feeling the pain of not having a clear supply chain strategy than I expected. At the IBP conference, as I reviewed the presentations, this was also a common theme.  One of the thorny issues of S&OP is the lack of definition by organizations on what defines supply chain excellence. This is not trivial. While it is becoming clear to companies that the most efficient supply chain is not the most effective supply chain, companies do not know how to align cross-functionally to make trade-offs in S&OP without a clear supply chain strategy.

Thorn #3. Alignment to a Common Goal.  Over and over again, I see teams struggling to build a road map on S&OP.  For me, it is simple.  It is a continuing evolution of building progressive capabilities on what I feel are the three key questions to answer on S&OP:

  • What is your goal?
  • How do you make decisions?
  • What do you measure?

This thorn is prevalent.  No presentation at the Miami event had clarity on these three questions. All were struggling with governance, measurement and goal attainment.  My advice is to answer these critical questions first, before you start the journey.

Thorn #4.  A Forecast is not a Forecast is not a Forecast. I wrote extensively on this topic last week, but as I sat in the audience in Miami, it was clear to me just how big of a problem this is.  I am convinced that the translation of volume to revenue, and the translation of the impact of product mix, cannot be handled effectively through tight integration.  (http://www.supplychainshaman.com/sales-and-operations-planning-2/rock-scisssors-paper-pitfalls-and-potholes-of-integrated-business-planning/)

Thorn #5. Global is not Global.  Many companies have a global supply chain, but they have defined GLOBAL very differently.  In the evolution of S&OP, one of the thorns is the governance model between regional and corporate teams.  How will regional input be used and what is the role of the global team?  Answer this first before starting the journey.  The right answer is different by industry.

As founder of Supply Chain Insights, I am SO excited to be pulling two surveys out of the field. The first is the VOICE of the Supply Chain Leader.  We were successful in getting 61 completes from 48 supply chain companies/leaders that we know (and love).  It is SO great to be cross-tabbing data again.

The second is a quantitative study on How S&OP Improves Supply Chain Agility.  In this second survey, we were able to collect input from 120 respondents.

I don’t want to give away the results, but I am excited about them.  While we will publish them on our website, and on our SlideShare, you can hear me talk through them at several upcoming sponsored webinars:

Plan4Demand has sponsored the Voice of Supply Chain survey.  These results will be shared on a webinar on April 25th at 10:00 AM PST (1:00 EST). Register for the webinar by visiting the sign-up page at:  https://plan4demand.webex.com/plan4demand/onstage/g.php?
t=a&d=719765874

We are also presenting the Agility S&OP results with SteelWedge Software on May 15th at 10:00 AM PST (1:00 PM EST). Sign up for this webinar by visiting their registration page at http://www.steelwedge.com/resources/webinars.

You can also see some of the preliminary results in the GenPact Webinar that combines some of the research that we are doing on rising commodity prices and the need for consumer products companies to become market-driven.  This will be co-presented with CFO Magazine on April 16th.  You can sign up for this webinar by visiting their registration site at http://www.cfo.com/webcasts/index.cfm/l_eventdetail?webcast=14626332&pcode=GEN041812.

Also, if you get a chance, check out my recent presentations on SlideShare.  I am committed to continuing the push for open research.  I think that it is time to free the analysts from behind that black curtain (or pay wall) to access research.  Here are links to the presentations:

http://www.slideshare.net/loracecere/presentation-given-at-ibp-presentation-miami-march29

http://www.slideshare.net/loracecere/presentation-at-the-terra-technology-conference-march-27

I welcome your thoughts!  Until then, the Supply Chain Shaman will be scouring the world in search of cool to share with you and your teams.  Please let me know what you think of the presentations and the webinars.