The Future of the Supply Chain

The Future of the Supply Chain
June 18, 2019

Read our latest research report to find out what businesses need to be aware of when managing supply chains in the modern era.

Uncertainty over Brexit is said to have caused more disruption to supply chains in the last five years than natural disasters and cyber-attacks combined. That’s one of the key findings of a new report launched today by connected planning specialist Vuealta, which found that 50% of UK business decision makers felt that Brexit uncertainty had negatively impacted their supply chain in the last 5 years.

In comparison, just over a fifth (22%) had suffered from supply chain disruption due to a cyber-attack, and 19% from a natural disaster. This was despite the fact that studies suggest extreme weather events have increased in the last six years, and a major cyber attack cost a global logistics business hundreds of millions of dollars as recently as 2017.

Other factors said to have caused a negative impact were through the failure of a single supplier (30%) and spikes in demand overstretching supply chain capacity (28%). The report also found that a fifth of respondents thought customers would feel the impact of a supply chain failure within a day, giving them little time to fix issues when they arise.

Despite the potential risks to disruption, many UK businesses were looking to grow, with 67% looking to expand into new markets. However, they were also conscious of improvements they needed to make to do that – 64% admitted that they needed to improve the efficiency of their supply chain. Real time information across their supply networks (45%) and collaborative planning with suppliers (41%) were two of the key steps to achieving that goal.

“UK businesses want to grow, yet they’re at risk of seeing critical supply chains and logistics disrupted by events outside of their control. They know they can’t control the weather for example, or what may or may not happen over Brexit, so it’s clear they need to focus on what they can manage. That means planning for all eventualities and being able to respond in real time” says Ian Stone, CEO, Vuealta. “This requires a connected supply chain ecosystem with transparency and collaboration between partners.  Those that achieve this will create sustainable and significant competitive advantage and will lead the race in the search of new markets and profit streams.”

The report also revealed that almost a fifth of respondent’s businesses (19%) have a supply chain that encompasses more than 30 suppliers, reflecting an often complex network to manage, particularly in times of disruption or change. The findings also demonstrate that business leadership often does not understand the potential impact on their supply chain, whether disruption be caused by a cyber-attack (42%), political or market uncertainty (47%) or a natural disaster (43%).

Ian Stone, CEO, Vuealta added, “With connected planning tools, organisations no longer need to be in the dark when it comes to the ‘what-ifs’ of supply chain disruption. Through taking control of their supply chain and giving themselves the visibility they need, UK businesses can find opportunities to succeed and ensure they’re protected against disruption, in whatever form that takes.”

The full report, The Future of the Supply Chain  can be downloaded HERE

Ian Stone

Written by: Ian Stone

Natural or unnatural: the science of planning for any disruption

June 5, 2019

From hurricanes and floods, to earthquakes and tsunamis, the world is experiencing a rapidly increasing number of adverse weather events. The Tohaku earthquake, tsunami and Thailand floods in 2011 are a prime example of how an apparently localised event can bring global supply chains, and ultimately the entire organisation, to their knees.

But it’s not just natural disasters that supply chains have to contend with – businesses also face a plethora of unnatural disruptive forces, from political uncertainty and new regulations, to evolving technologies and a growing cyber-threat landscape.

Planning can be the silver bullet in responding to natural and unnatural threats. It sounds simple, we all do it, sometimes without even thinking about it. But there are a number of building blocks involved, which many businesses often forget about: integrated technology, common data, shared processes, and cross-team collaboration. These form the foundation on which a successful planning strategy is built.

When organisations get this right and achieve true connectivity across the business, the potential benefits are endless. But we need to move beyond traditional approaches in order to plan more effectively for today’s challenges.

Working on a consensus

The most common planning process in industry today, and the one recommended by many leading experts, is the consensus process. Groups, such as demand, sales and marketing teams are kept siloed and create their own plans before they are unified to create one final, or consensus, plan.

The problem with this approach is that it often leads to diluted accountability for the final result because, by definition, no single role, department or business unit can be held 100% accountable for the final plan. The process is also inefficient: by generating three plans that ultimately input into only one, businesses are effectively disregarding 75% of the output from each business units’ provisional proposals. What’s more, the process is slow to respond because, in order to accurately model the impact of unexpected events, you have to rerun it from start to finish.

Collaborating on planning

More and more businesses are beginning to realise that keeping the organisation and its supply chain siloed simply isn’t going to work. Companies need to collaborate across teams and connect every part of the business, from finance and sales, to marketing and the supply chain, because when something changes in one area, it will ripple across the business, and you have to be able to respond at speed.

Collaborative planning helps to solve the problems presented by a consensus strategy by allowing different functions to own different inputs to just one plan. A truly joined up approach.

For example, with a collaborative strategy, one team may input a baseline forecast, followed by a team who input an organic growth uplift, and finally another team who make an input for a promotion. This means that there is only one plan, yet three teams have collaborated to achieve it. As a result, all three teams can be fully accountable for the accuracy of their individual inputs and assumptions because we can individually measure each of their contributions to the plan.

In addition to a 75% reduction in workload and increased response times, a hidden benefit of collaborative planning is that the process is particularly well suited to event-based inputs, which are truly the planning panacea.

Moving beyond traditional budgets: letting events drive the process

Traditionally, when organisations create multiple plans as part of the consensus process, they do so in a budget type format – something that is often remarkably similar to a household budget. But there are many common complaints with entering forecasts (and budgets) in this format. To name a few: there are a lot of input cells to review, there’s sparsity in the plan, granularity is lost, it’s not easy to change or move events and there isn’t a lot of context.

But if we break the plan down into the events that it is built on, rather than entering and analysing hundreds and thousands of cells of information, organisations can just record the key events that generate the output.

In addition to building out a story from the headlines of the overall plan, event-driven planning has additional benefits including workload reduction, the ability to quickly iterate plans just by changing any assumption, increased responsiveness, and the ability to assess scenarios and different options in real-time. In this way, you can create a living plan.

Ultimately, organisations and supply chains that take a collaborative, event driven approach to planning can not only reduce their teams’ workloads, but equally increase the impact of the work they are doing and the efficiency at which it can be done. And that planning has never been more vital to the wider business as unexpected natural and unnatural disasters are thrown at companies from every direction. Planning isn’t about making life harder; it’s about working together to make it easier. Whether businesses decide to exploit the change or avoid it, the key is to be prepared for whatever comes their way.

Antony Lovell

Written by: Antony Lovell

Antony leads the solutions division at Vuealta where he is charged with creating world class industry applications on the Anaplan platform. He has 20 years international experience of supply chain strategy and design spanning multiple industries including CPG and Consumer Electronics as a consultant and industry leader. Antony’s key areas of expertise include supply chain strategy, supply chain segmentation, network design, demand and supply planning, and business process re-engineering.