Supply Chain Intelligence: Down the supply chain & back up the rabbit hole
Published: 01 May 2021
As every good schoolchild knows, Alice in Wonderland disappeared down the rabbit hole. For Alice, it was an adventure, but it was a somewhat unpleasant experience filled with the surreal and the almost macabre. A journey down the modern supply chain should of course never represent such unknowns.
A recent Vuealta webinar designed to keep us out of the rabbit hole and analyse the workings of contemporary supply chain intelligence discussed supply chain strategies in the context of demand, inventory and performance management. The session was officially titled Analytics for Supply Chain: Demand, Inventory and Performance Management.
Speakers included Michael Detampel, Sr. Director of Supply Chain Solutions, Anaplan; Antony Lovell, VP Supply Chain Applications, Anaplan; and Professor Emel Aktas, Professor of Supply Chain Analytics, Cranfield University School of Management.
The speakers agreed that in the world of supply chain management, there is a need to delineate and define the difference between trends and seasonality swings. In fact, customer trends and seasonality should be handled independently. We need to understand whether an increase in demand is due to a trend i.e. growth in sales, or due to seasonality and the time of the year.
Ice cream logic meltdown
Take ice cream as an example. Seasonality will have a bigger impact upon supply chain requirements in colder countries, where demand drops in the winter months. Buying trends may be influenced by product marketing and also by location-specific factors (vacation spots, seaside areas and so on). The mechanics of both factors operate independently of seasonality, but in a conjoined way.
Supply chain engineering gurus also need to think about data analytics can improve lead time.
The speakers noted that lead time is dependent on factors outside of the influence of analytics, such as the supplier’s production time and the distance over which products should be transported etc. With analytics, we can identify the variability in lead time, but to reduce the variability or reduce the lead time itself we need to work with the supplier.
Only by working with suppliers directly can we understand factors that contribute to lead time fluctuations and be able to understand whether these factors can be eliminated from the process. A proven real world application of analytics is the action to monitor and evaluate observed lead time vs. planned lead times on a regular basis.
A head for capacity ceilings
This conversation moved on to the area of capacity ceiling management. A technology platform used to support the supply chain should be able to exhibit capacity constraint intelligence in aspects of its supply chain optimization functions. In a real world scenario, this could cover warehouse capacity, production capacity, or distribution capacity.
An effective business planning management platform solution should incorporate these capacity constraints into the models it operates to inform operational, tactical and strategic supply chain decisions.
This insightful Vuealta webinar touched on a number of other core supply chain technology concerns. The speakers examined the need to integrate supply chain technologies with enterprise ERP systems, such as those associated with companies like SAP, Infor, IFS and Unit4.
An organic software cycle: introduction, growth & decline
Overall here, it is very clear that supply chain technologies and their analytics capabilities are becoming more powerful, complex and multi-faceted as they form an increasingly essential part of the contemporary business IT stack.
For the technologies tabled here – and the software connectors, dependencies and Application Programming Interfaces (APIs) that form their synaptic neural links – there is often a very clear start, middle and end period in terms of any single tool or function’s lifecycle.
To apply supply chain intelligence prudently, efficiently and profitably, an enterprise needs to think about the ‘introduction’ and ‘growth’ as well as ‘decline’ phases in the life software cycle differently. Only by taking this holistic approach can enterprise operate with full-blown software in its ‘maturity’ phase truly effectively.
With all this knowledge on board, even Alice would want to know more.