Written by 1:14 pm Big data supply chains, Demand, demand driven, Global Supply Chains • 3 Comments

The Hill Supply Chain Leaders Climb

When you misappropriate something, you steal it, or otherwise use it, in a way its owner didn’t intend. Dictionary.com

Words matter. As I sat and listened to Amanda Gorman’s poetry at Joe Biden’s inauguration, I gasped. While there were great fireworks, singers, and speeches during the inauguration, Amanda’s contribution spoke to me.

The young daughter of a black single mother stole the show. I hung on to every word. I read her poem–The Hill We Climb–every day for a week. Mesmerized, I quickly became a groupie.

When Amanda spoke to Anderson Cooper of CNN on US politics’ current state, she stated her belief that today’s political struggle is a misappropriation of words. When Anderson asked her to elaborate, she explained, “We suffer from words stated and shared without an understanding of meaning.” It spoke to me and is the genesis of this post.

Word Misappropriation In Supply Chain

I struggle day-to-day with the misappropriation of words in the building of an effective supply chain. What do I mean?  Each day in my work with clients, I review strategy documents. Each document is peppered with words, but most lack meaning.

Let me give you an example. A recent client wanted an end-to-end supply chain redefinition with a control tower to improve visibility through integrated processes. The goal was a supply chain that was efficient, agile, and responsive. However, when I asked for the definition of end-to-end, there was silence. In the follow-up question on the control tower’s definition, he struggled to distill his words to clarity. There was none. When I asked why there is a need for improved visibility, the phone call was silent. I could go on and on, but you probably get the point. I strongly feel that one of the major reasons that nine out of ten supply chains are stuck is the lack of clarity of supply chain vision. The underlying issue is word clarity. My goal in this blog is to sensitize you to the issue.

Making The Case

In my interviews with business leaders during the pandemic, I find companies with the highest integration to ERP struggled to adapt. They were less flexible and less likely to tie S&OP planning to execution. The reason? My theory is rooted in the misappropriation of words. My observation is that when business leaders state the need for “integrated processes,” they ask for seamless data flows and insights across the organization. In contrast, when a technologist speaks of an “integrated process,” the focus is on data structures and open Application Programming Interfaces (APIs). The prior is not enabled by the latter. We have not aligned on a meaningful definition of integration to drive business value.

The failure in most organizations is that teams do not stop and ask people for definitions. Instead, we assume. In the typical meeting glob of pontification, the meanings of thoughts get kicked to the gutter. An opportunity in our remote and virtual work experience is to slow down and ask for clarity. And then ask for understanding.

Let me share another example. In my research, I define an agile supply chain as one with the same cost, quality, and customer service given the level of demand and supply volatility. In contrast, an efficient supply chain is designed to yield the lowest cost per case. These are two very different designs. A supply chain will never be agile and efficient.

Organizations do not have one supply chain. There are multiple. The secret to success is typing the supply chains based on demand and supply variability (segmentation) and applying the right tactics. High performers make a conscious choice to drive resilience. (Resilience is the organizational capability to deliver consistent balance sheet results year-over-year in the face of changing business conditions.)

In Figure 1, I share an example from a data analytics workshop given recently. Today’s technologies offer great promise. My struggle is that while I rate some of the newer analytics an “8” on the ability to drive value, I rate the technologists’ teams a “2” on how to implement the technologies with business leaders. The central struggle lies with words. For example, if a client sticks to the known/known, they will never create a learning organization.

Figure 1. Word Activity In Analytics

The right questions are not simple. I know that there are many maturity models in the market, but here I share mine to help you understand my perspective; mature companies sense market shifts in both demand and supply and orchestrate trade-offs.

Companies’ historical order patterns–shipments and orders–are no substitute for market data.  Processes for capturing market data–channel consumption, event data, weather pattern intelligence, market intelligence, rating, and review data–are not available in conventional supply chain architectures.

During the pandemic, I completed interviews with twenty-one business leaders. The first interviews were in March-April, and the last was in October-November. Due to the market shifts, no company in the interviews could use their current demand planning technologies to drive a satisfactory plan. The way forward requires a redefinition of demand.

Figure 2. Market-driven Maturity Model

 

 

 

 

The Answer Does Not Lie In Traditional Functional Definitions

I work with a company that uses the term supply chain, but the leaders are from manufacturing and lack an understanding of how to make, source, and deliver managed together add value. The company has an over-exuberant CIO selling an agenda for artificial intelligence to the board.  When they call and say, “AI this.” I say, “Not so fast.” The reason? The organization is not clear on what good looks like. They are stuck in functional measurement chaos.

Similarly, I work with another organization that grew exponentially through acquisition over the past decade. The processes that worked when they were regional do not now. The supply chain leader struggles with why teams cannot align and drive progress. I tell him that the answer starts with him. He must define “What good looks like” and “then clarify how to make decisions best.”  Planning is a form of decision support. In planning technologies, technologies drive insights, but organizations must define how teams will use them to make decisions. Unfortunately, our historical focus was on installing technologies, not building the human systems.

When I asked the business leader to give me insights on the global team’s role, the regional team, and the businesses, he replied, “You make my head hurt.” I laughed but then cautioned that unless we help organizations use technologies, we will always be stuck. I left him with the homework of defining planning governance. If we can drive greater power and insights from new technologies, how should the organization use them to make decisions. My caution to the reader is that this is not an easy activity with one right answer. Each organization is rooted in cultural and organizational nuances.

Figure 3. Designing How Organizations Should Use Technologies to Drive Better Decisions

 

A lack of definition clarity is a stumbling block in working with technologists to drive innovation. To discuss meaning, the business leader must invest in an understanding of the “Art of the Possible,” and the technologist must learn “The Business Impact.” Neither is an easy journey.

This is the hill that we climb.

On a side note, I am kicking off a project next week with fifteen business leaders, four academics, and a SCOR master from ASCM to define outside-in planning processes. I named the project ZEBRA. While speaking to many technologists on these gaps, O9 is partnering with me to drive this project to a conclusion. The goal is an open-source model that can be used by all technologists and consultants.

Why the name Project Zebra? Early in the study of Zebras, naturalists did not believe that Zebra could change their stripes. There is a new discovery. Now, it is known that Zebras, when they move from region-to-region in Africa, actually change their patterns.

I like the analogy. Today’s planning processes are stuck in most organizations in hard and fast black and white patterns. My goal is to define an outside-in process clearly and then challenge others to change their stripes based on the outcomes of the testing of the use of outside-in signals.

I think that this is the hill we climb. I will be sharing the journey with my readers as we move through a series of structured activities. The efforts will culminate at my conference, The Supply Chain Insights Global Summit, in Franklin, TN, in September.

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