Technology Changes to Supply Chains Demand Good Leadership
Hidden Costs of Outsourcing and Offshoring for Financial Services...
Procurement Transformation - Be Careful What You Wish For
Cloud Computing Benefits Procurement in Two Ways
Balancing Customization and Business Process Change in an...
Benjamin Ho, Deputy Procurement Officer, City of Chicago Department of Procurement Services
High Performing SRM Cultures Require Technology
Ryan Nied, Executive Consultant, State of Flux
Partnering with Procurement to Increase Automation
Aaron G. Thum, Executive Director, Procurement and Vendor Management, GardaWorld Cash Services
Aligning Procurement Teams with Data
Jeff Stites, CIO, Diamond Foods
Thank you for Subscribing to CIO Applications Weekly Brief

As provocative as it might sound, the recent coronavirus pandemic forced most logistics and supply chain practitioners to change their focus from proactive management to reactive management. In this article, we will be first discussing the trends prior to the COVID-19 pandemic with a view on proactive and forward-looking supply chain processes. Then, we will discuss the recent changes triggered by the challenges related to the pandemic and impacting how supply chain professionals had to react to the drastic changes in their supply chains. Finally, we will be making some recommendations to integrate the two approaches for the best outcome. Pre-virus, most supply chain philosophies were focused on mid and long term horizons. For example, Sales and Operations planning techniques (S&OP) have proliferated in businesses with an emphasis on forecasting. Forecasting remains a crucial function (and not just for supply chain but for the entire business) with planning windows that usually go from 3 months to 18 months. We have also seen efforts to use IBP (Integrated Business Planning) across business units and companies. While the need for forwardlooking techniques remains strong, the reality of the current economic environment around the world leaves us with a lot of uncertainties. Spending excessive time on forecasting could bring diminishing returns. As a result, we do recommend keeping the forecasting work but making sure we do not spend time over-optimizing. Besides, the first rule of forecasting is that forecasts are always wrong, after all.
Once the virus started to disrupt the global business environment, supply chain practitioners had to react immediately to the situation. They looked at the current disruption and worked within days-weeks horizons. The mid to long term view started to be less important at that point since “knowing what will happen tomorrow” was already a challenge. It sounded like moving to a more reactive point of view, but ultimately ended up being more of a “sense and respond” supply chain activity. Sense-and-respond supply chains can monitor, manage and optimize business exceptions— anomalous events that occur within supply chains—with a limited need for human intervention. They rely on a cohesive model where data and insights are the keys.
All things considered, the virus reminded us to focus as much on the “now” as the “future”. As the pendulum makes a swing towards “sense and respond”, we believe that a fully integrated approach is the best way to handle the current environment.
It is based on a strong view of the future, balanced with an eye on what’s on the dashboard at this moment. Teams must be involved in forecasting, IBPs, S&OPs and Business Continuity/ Contingency to prepare the future with the limited information they have and considering the challenging tumultuous environment. Teams must focus on building a sense and respond engine based on key metrics that allow rapid adjustments to business cases. This can only be achieved with a birds-eye view on the end to end supply chain involving all partners (suppliers and customers as well as intermediaries - distribution network for example) and a state of the art data and insights model. Finally, we should be grateful for the opportunity to rethink our focus. When the sea is calm, it is time to reflect on the adventure and the new horizons. When the sea is turbulent, keeping the boat afloat becomes a priority, but should not distract the captain from focusing on its destination
I agree We use cookies on this website to enhance your user experience. By clicking any link on this page you are giving your consent for us to set cookies. More info
Featured Vendors
-
Jason Vogel, Senior Director of Product Strategy & Development, Silver Wealth Technologies
James Brown, CEO, Smart Communications
Deepak Dube, Founder and CEO, Datanomers
Tory Hazard, CEO, Institutional Cash Distributors
Jean Jacques Borno, CFP®, Founder & CEO, 1787fp
-
Andrew Rudd, CEO, Advisor Software
Douglas Jones, Vice President Operations, NETSOL Technologies
Matt McCormick, CEO, AddOn Networks
Jeff Peters, President, and Co-Founder, Focalized Networks
Tom Jordan, VP, Financial Software Solutions, Digital Check Corp
Tracey Dunlap, Chief Experience Officer, Zenmonics