BCG: is your supply chain planning ready for digital?
With the introduction of technology accelerating at an ever-increasing rate, BCG lists eight no-regret moves for a successful supply chain.
Obtain senior leadership commitment
It is important to create a common level of understanding on the executive team around the most crucial commercial and supply chain issues, their root causes as well as the available and appropriate planning solutions. As a direct result, sales and supply chain planning organisations pursue what they believe to be the right actions but don’t coordinate those actions with the leadership. Companies should ensure that senior management, including the CEO, country or divisional managers, heads of sales, finance and the supply chain is committed to excellence in the supply chain planning process.
Instill process discipline
Organisations should consistently adhere to their planning process, even if that process is imperfect, with employees understanding its importance and working to solve any problems. It is also important to invest sufficient time in explaining the value the process delivers and the contribution needed from each employee. This should clearly define roles and responsibilities and set expectations. For example, attendance and review meetings should be required for all levels of staff and attendees should come prepared. Participants should focus on decisions made during meetings and help to drive the process forward. By enforcing these requirements, it will allow the business to develop individuals who trust the process and believe it will deliver results.
Break down silos
Cross-functional engagement is crucial, particularly among the commercial, finance and supply chain teams. Each function must contribute to and be engaged in the process, adjusting its own actions to the agreed-upon goals. This is in addition to defining all roles and responsibilities as organisations should align functional metrics with overall process outcomes, which links individual pay to supply chain performance. They should also determine transparency across systems and locations by providing access to data on plant performance, line-level product assignments, the availability of materials, inventory levels and other KPIs.
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4. Make high-quality data available
A robust planning process requires access to accurate, consistent and timely data. While cleaning up master data is hardly a new topic, the ways in which to approach this cleanup have changed over the past few years. Instead of manually going through thousands of data points, companies can utilise automated data-cleaning tools to accelerate the process significantly. They should combine their chosen approaches through a clearly defined master-data governance plan to ensure data consistency and quality.
Engage with IT
Companies should carefully consider the way the supply chain and corporate IT works together, from both a business and a technology perspective. While IT objectives primarily focus on maintaining cost-effective operations and managing system complexity, lots of today’s digital supply chain planning technologies require specific solutions that are outside of organisations’ more traditional enterprise resource planning systems. Due to this, these technologies require a more open and flexible IT architecture - one that allows new software to connect to existing ERP systems in a simple, flexible way.
Thoughtfully select and implement digital tools
Digital can introduce significant opportunities but only when the right tools are applied in the correct way. Companies should focus on digital tools that address obvious gaps in the current setup, as well as being conscious of any existing prerequisites to success. For example, introducing an enhanced forecasting tool can enhance the accuracy of demand planning and efficiency of supply planning. However, if the tool requires sales representatives to change the way they interact with supply change planners, this issue should be addressed beforehand.
Establish a talent pipeline
With the future in mind, high-functioning and digital supply chain planning will require a new kind of talent. These employees will be familiar with new ways of working, including agile development processes and the requirement of being adaptable and analytical.
Prepare for a new way of working
Before deciding on the introduction of any new digital technologies, companies should prepare the organisation. For example, this could be developing a pilot-refine-repeat approach to change that will generate a comprehensive understanding of how well each solution is going to work and enable companies to gain a good understanding of where digital payoffs lie.
Check out the May edition of Supply Chain Digital to read our exclusive interview with Stefan Gstettner, Partner & Associate Director in the Frankfurt office of BCG.
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