Back To Basics: Building The New Normal Through Supply Chain Efficiency

August 20, 2021

Author: Vuealta

Back to Basics

The Supply Chain Management Association of the Philippines (SCMAP) has been working to build, share and enhance best practices across the technology industry and business landscape for 30-years.

As SCMAP now works to help local and international partners on their journey towards digital transformation and the cloud, the organization has hosted its most recent SCMAP Live event. This year it was presented in partnership with Anaplan and Vuealta, on 29 July 2021.

SCMAP works by advocating policy, initiatives and best practices from the boardroom to the warehouse floor. The organization recognizes that a strong supply chain builds a strong economy and helps to build a better quality of life for everybody. The SCMAP team’s focus is not just in the Philippines, but it extends its interest around the world through a culture of collaboration.

As global supply chains continue to deal with the impact of the Covid-19 (Coronavirus) pandemic, this event helped examine the processes through which supply chain systems are currently reengineering and looking to further innovate.

An online gathering this year, SCMAP Live was staged to ask important questions such as whether basics functions such as Integrated Business Planning (IBP) and Sales & Operations (S&OP) are still relevant to today’s most progressive supply chain management practices.

Speakers and insights

This year’s SCMAP Live was chaired by Ana Rose “Ochie” Ochoa, SCMAP’s Program Director and Unit Manager at Philamlife Del Mundo Premier Agency. Ochie was joined by Dr Deborah Pike, Senior Solutions Architect for Supply Chain at Anaplan from her office headquarters in Sydney, Australia.

Also speaking this year were Joost Driessen, Managing Director for Vuealta Singapore, Dada Salud Senior Demand Planning Manager for sauces and food manufacturer NutriAsia , based in Manilla. Last but never least was Aamir Mehdi, Supply Chain Director for Asia-Pacific region for one of the world’s largest dairy manufacturers Fonterra, based in Singapore.

Looking at the fact that S&OP has been around for some 35 years, Dr Pike spoke about the fact that organizations have yet to really move to use this practice in an agile manner aligned to modern cloud platforms.

As organizations look to try and resolve their ‘last mile challenge’ in the post-pandemic era, the speakers agreed that businesses need to align processes with an operating plan that really helps them know they should be doing on the next mile.

A key factor for demand planners throughout the pandemic has, of course, been the fact that we have never had access to any datasets that describe the shape of the way business has functioned throughout this period.

“What this uncovered are the realities that we have all faced over the last 18-months through this disruptive period. We have all been through disruption before, but what happened this time was disruption on a ‘scale’ that we had neither experienced and – in many cases – probably never envisaged,” said Fonterra’s Mehdi.

Proven core methods & techniques

The panel agreed that the core principles for operating supply chain management throughout the changes driven by the pandemic had and have not changed i.e. it is important to stick to proven methods and techniques.

Vuealta’s Joost Driessen explained that inventory planning is always challenging, often because it’s hard to track the changing cost of raw materials needed for any product or service.

“But it’s a question of working with the old (or basics) and the new. Companies now need to think about integrating IoT data into their central supply chain management function. They also working with AI to help combine external data and further optimize the way the business works and get better views on external demand levels,” said Driessen.

Fonterra’s Mehdi underlined Driessen’s comments by highlighting the fact that the companies who had found Covid-19 disruption change comparatively easier to handle were the ones who had already started digital transformation initiatives, even if initiatives were still relatively early stage.

No silver bullets

“When you have to attempt to transform extremely fast, you often find that you’re chasing the wrong technologies. We often look at technology as a silver bullet, but it isn’t, it’s an enabler. Because of this, organizations need to do the fundamentals right first, before they attempt to change,” said Mehdi.

Many companies have of course had to shorten their planning horizons through the last 18-months. This has meant that systems and processes have been compacted into shorter time windows. At the same time, they have needed to achieve a more detailed and granular level of information to help increase demand planning accuracy.

Salud and Mehdi explained how the demand patterns shifted overnight during the pandemic for both businesses. The panelists said that their organization’s first priority was to make sure that where operations did continue, they only did so once the company could ensure that people could work safely.

Thinking about how companies are realizing that they need to move their demand planning onwards from the now-archaic spreadsheet era, the panelists looked at how firms now need to be able to respond far more quickly. As ecommerce now plays an important role in demand planning, systems need to be updated in order to be able to ingest sales information from ecommerce systems.

Companies need to collaborate across the supply chain in real time and far more broadly than at any time in the past. As Vuealta’s Driessen noted, it’s no longer just a question of working with your customers; today it’s a question of working with your customers’ customers in order to build up a holistic view of the whole economy’s supply chain.

A wider, external and collaborative view

Anaplan’s Dr Deborah Pike dug into collaboration and the fact that many organizations are still using Excel spreadsheets for their S&OP reporting. She explained that it’s very important for us now to see organizations moving to an S&OP process so that its five core steps are now more intelligently executed.

“It’s time to look at forecasting methods differently so that the process itself gravitates less towards looking backwards and more towards looking forward. This involves the company looking at how far it can go to look outside its organization to start using other data. It also involves the use of Machine Learning (ML) so that the company can start to integrate new information sources (perhaps data relating to weather patterns for example) that have disrupted the organization’s supply chain in the past,” said Dr Pike.

As the panel discussion entered its final phases, the panelists talked about how their supply chains were set up in real world terms.

“As a global dairy company, about 90% of our ‘milk pool’ comes from New Zealand. Obviously, we know that geographically, New Zealand is pretty far from most other places in the world. We also work with a fairly seasonal supply base i.e. the supply of milk does not stay static throughout the year. So what those challenges have taught us how to adapt around the world in a number of different ways,” said Fonterra’s Mehdi.

Whether it’s a channel vertical, a product vertical or a geographical vertical, Mehdi and his team have learned how to adapt to changing circumstances by leveraging its total system synergy.

“Ultimately, the real resilience in any business comes down to the strength of its people, there’s almost always a creative way of making a market pivot happen, it’s just a question of having the determination and tools at hand to find it,” said Mehdi.

Ensuring future sustainability

What the panelists agreed the whole pandemic period will have taught us – other than the importance of sanitizing and covering our mouths – is to more directly identify, track, manage and augment our approach to supply chain and wider business sustainability.

We know that so many parts of commercial trade were forced online throughout the pandemic. As what we hope are the latter stages of the global contagion at the time of writing, businesses will need to think about supply networks that are more functionally capable of working to work with multi-channel ecommerce and deliver products and services in a multi-channel way.

The 2021 SCMAP Live event reminded us clearly that without a plan, no business can execute and perform. But plans need to be inherently flexible. As the uncommon philosopher Mike Tyson once said, “Everybody has a plan until they get punched in the face.” It’s time to embrace uncertainty and bring it front and center into the business plans of the future.

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