subscribe: Posts | Comments | Email

Describing an Exponential Organizational and Supply Chain Capability

0 comments

In February, this supply chain industry analyst attended the Oracle Modern Supply Chain Experience Conference held in San Jose California.  Through Supply Chain Matters, I have shared several prior observations and takeaways from this conference. We noted the extraordinary attendance, upwards of 2800 attendees at a supply chain management information technology focused conference. We further highlighted the momentum of Cloud-based technology deployments in the many different business process areas that today come under the umbrella of supply chain management along with the building interest levels surrounding Internet of Things (IoT) technology being applied to future supply chain management processes.

There was one keynote that I initially did not share in prior conference highlights, principally because I needed time to absorb the many compelling messages that were delivered. The title was Exponential Organizations and the presenter was Yuri van Geest, Co-Founder of Singularity University. Yuri Exponential Organizations sized 207x300 Describing an Exponential Organizational and Supply Chain Capabilityhas a background in organizational design and is noted as a keen observer of exponential technologies and trends.  He is a co-author of the book- Exponential Organizations- Why new organizations are ten times better, faster, and cheaper than yours (and what to do about it).

The keynote opened with van Geest recounting the dizzying exponential developments that have occurred in artificial intelligence, alternative energy, biotechnology and medicine, robotics, additive manufacturing, sensors, and drones. His primary message was that most of these exponential technology developments will eventually impact supply chains and the organizations and people that makeup this community. His takeaway message was that the best vision of the future is happening at the peripherals of such technology development.

My initial presumption was that many of the conference attendees would have a difficult time absorbing the stark nature of the messages or would dismiss this talk as that of a technology genius speaking far above an ability to absorb the real implications.  Frankly, the conference organizers should have allowed additional time to accommodate all the content as well as to allow for further audience interaction.

Since the conference, I have had the opportunity to read the book and revisit my notes from the keynote. My goal in this blog is help distill what I perceive to be some other key takeaway messages related to future supply chain management organizational purpose, design, and work activities, at least from my perspective after having time to really absorb the content.

Geest did a suberb job of translating today’s far more exponential technology trends to what he viewed as direct impacts on industry supply chains. As an example, he stated that over the next ten years, the exponential developments in 3D printing capabilities will foster the ability to print nearly everything in materials including molecular assembly. The implication is the ability for products to be produced within primary areas of consumption, with the model of contract manufacturing being one of virtual capabilities to receive electronic design information and print on-demand products. A further implication is a more localized supply chain or regional network.

The notions of machine learning or cognitive acquired deep learning technology capabilities will at some point in the future lead to autonomous supply chain planning and customer fulfillment, where algorithms and physical sensing manage supply chain needs. While on the subject of planning, the book declares traditional five-year planning as obsolete, and that in exponential organizations, there should never be more than a one-year planning cycle supplemented by continuous just-in-time learning and events.

Regarding the physical, Geest further spoke to the compelling impacts that IoT focused developments would have on supply chains.  In the book, there is a passage that is worth sharing:

In the same way that today we can no longer handle the complexities of air traffic control or supply chain management without algorithms, almost all the business insights and decisions of tomorrow will be data-driven.”

Obviously, the messages are profound and perhaps threatening to many. None the less, van Geest’s message is that we cannot ignore compelling events and individually, people need to be trained and prepared with new individual and team-based skills.

To better understand the implications, I turned back to book to ascertain what were described as the key competencies of the future Chief Operating Officer, Chief Human Resources Officer and either Chief Data or Chief Innovation Officers.

Here are just a few excerpts to ponder:

  • Digital based production and the unbundling of production steps will free the company to focus on its core competencies (customer relationships, R&D, design, and marketing)
  • The notion of a recycled materials supply chain where production materials recycled and reused multiple times.
  • Internet of Things sensors used to monitor the entire supply chain.
  • The need for long-distance transport to drop over time due to the rise of localized production and a closed-loop material supply chain.
  • Universal Cloud access to social technologies, data, and services, independent of physical location.
  • Data management systems that use methodologies, processes, architectures, and technologies to transform raw data into meaningful and useful business information, available to all teams.
  • The need for Big Data security practices.
  • The hiring of employees based on overall potential, not just past record of accomplishment, and on the premise of who can ask the right questions.
  • New notions of peer-based and continuous learning.
  • Reputation measured by contributions in communities and work teams.

 

The book addresses the obvious question regarding the impact on future jobs. The premise is that the democratization of technology will allow individuals and teams to follow their passions and create new economic opportunities and businesses, far different than work being performed today.

These are heady messages, and will cause some pause or skeptics. We applaud Oracle’s supply chain management  conference organizers for hosting such a thought-provoking presentation.

From our lens, there is no denying that the exponential changes occurring in technology and business will eventually impact how supply chains are manifested and managed. The question is in what time frames.

The other obvious question, will teams and individuals be prepared?

We encourage readers to share further thoughts and comments.

Bob Ferrari

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


Supply Chain Matters Shares Our Top Ten Blog Postings in 2016

0 comments

An annual tradition for the Supply Chain Matters blog has been to look back to the prior year’s readership uptake and share with our readers the top ten blog postings of the prior year.

Admittedly, we are a bit late in compilating all of our 2016 readership data but we did want to publish this for readers, clients and sponsors.

The list provides a sense of what particular topics were of the most interest in our over 300 blog postings published in 2016.  SCM 250 76 Supply Chain Matters Shares Our Top Ten Blog Postings in 2016

In the Dave Letterman style, we start with number ten and work our way down to the number one topic of readership uptake.

Number 10:

Observations on the Rankings for Supply Chain Planning Technology (February 5, 2016)

After industry analyst firm Gartner published its Magic Quadrant Rankings for Supply Chain Planning System of Record applications in mid-January, this commentary shared observations regarding the rankings of vendors. Our takeaway was that the current landscape of supply chain planning, sales and operations planning (SO&P) and B2B supply chain network planning technology was far more influenced by line-of-business and supply chain leadership input needs and requirements. Hence many other sources of information support the buying decision beyond industry analyst rankings.

Number 9:

The Value Proposition for Cloud Computing is Broader in Scope and in Business Implications (January 22, 2016)

This Supply Chain Matters commentary explored the implications of a full Cloud-based technology suite in supporting broad supply chain business process needs after industry analyst Bob Ferrari completed nearly two days of briefings and conference presentations related to Oracle’s Cloud based technology offerings. One takeaway provided was to view Cloud from the perspective of a broader focus on an engineered suite of pre-integrated software applications that are continually updated to reflect changing business needs. Why settle for business application innovation every 1-2 years when every 6 months is an option, and with lower capital and overhead costs.

Number 8:

Sports Authority- A Disturbing Twist to Consignment Inventory Management Practices (March 17, 2016)

Characterized as one of the largest sporting-goods retailers, Sports Authority was weighted down with debt from a prior leveraged buyout a decade ago. We called attention to a disturbing development in the ongoing bankruptcy process, as the retail chain filed lawsuits with more than 160 suppliers challenging supplier claims to consigned inventories. We opined that this development had significant ramifications for supplier collaboration practices within retail as well as other consumer goods focused supply chains.

Number 7:

A Disruptor is About to Enter the Heavy Truck Equipment Market (June 20, 2016)

Supply Chain Matters has continuously provided our readers visibility to emerging industry disruptors who are leveraging advanced technology and platforms directed at supply chain related business process and asset needs.  Such visibility included the entry of Uber and Lyft and their potential to move beyond people transportation. In this posting we provided visibility to start-up Nikola Motor Company and its ongoing development of a Class 8, 2000 horsepower electric powered semi-tractor truck that will be named the Nicola One.  The actual unveiling occurred in early December.

Number 6:

Chipotle’s Consumer Trust Crisis Enters a New Critical Phase (February 9, 2016)

One of our early blogs in a series of ongoing commentaries we outlined from a supply chain lens regarding the business, brand and supply chain crisis that impacted Chipotle Mexican Grill after hundreds of consumers were sickened by a series of varying incidents ranging from E-coli outbreaks to norovirus that date back to the summer of 2015. We opined that too much attention was being applied to corporate marketing vs. supply chain and restaurant risk mitigation efforts. It is now April 2017 and the challenges to restore brand trust remain.

Number 5:

Look to the Cloud to Support the Modern B2B Network (September 1, 2016)

This blog commentary addressed an organization’s journey toward mature B2B information integration and how this is made possible by today’s advanced cloud-based platforms, applications and infrastructure. We opined that there is no question that analytics and broader, more predictive business insight capabilities are opportunities to transform B2B business and supply chain business networks. The opportunity — and indeed the necessity — is to leverage an end-to-end business network to synchronize planning, execution, customer fulfillment and more predictive decision-making needs.

Number 4:

Gartner 2016 Top 25 Supply Chain Rankings- Supply Chain Matters Initial Impressions (May 19, 2016)

Our annual commentary related to analyst firm Gartner’s Top 25 Supply Chain Rankings.  Our annual commentaries reflect our beliefs that ranking criteria can be misconstrued, especially when it tends to favor supply chains that avoid major ownership of assets and inventory, or tend to weight other criteria lower, such as sustainability and social responsibility practices.

Number 3:

A Tour of Healthcare Supply Chain Innovation in Action (February 4, 2016)

Executive Editor Bob Ferrari shared impressions and insights regarding a November 2015 visit to the Cardinal Health Healthcare Supply Chain Innovation Lab located in Concord Massachusetts.  The lab served as a hub to explore innovative technology approaches such as smart sensors and near-field communications (NFC) in addressing healthcare supply chain product demand and supply inefficiencies.

Number 2:

What are Specific Skill Needs and Gaps in Supply Chain Management? (February 26, 2016)

Supply Chain Matters highlights results and an infographic from a supply chain skills survey conducted by Canadian based Argentus Supply Chain Recruiting outlining what specific hard and soft skills are organizations looking for in their hiring and recruiting efforts. Supply chain skills and talent development content has consistently drawn reader interest.

 

And now, a drum-roll for our most read 2016 blog:

 

Airbus and Boeing Continue to Experience Supply Chain Scale-Up Challenges (May 2, 2016)

After announcing Q1 financial and operational performance results, both Airbus and Boeing addressed ongoing challenges related to their supply chains and expected performance for 2016 total aircraft delivery commitments. We shared candid comments from Airbus’s CEO as to the global producer’s most critical new product introductions and clear signs of concerns related to various supply chain challenges. We also called attention to comments from United Technologies regarding the new Pratt and Whitney geared turbofan engine, which turned out to be the weakest link in the Airbus supply chain. Finally we concluded that for the two dominant manufacturers of commercial aircraft, supply chain challenges have once again come back as concerns amid an environment of robust order backlogs. Each has different manifestations and supplier challenges, and each reflects on internal operational scale-up as well. We opined our belief that challenging product design among the most critical supply components, including aircraft engines would continue to be the linchpin towards achieving required production scale-up milestones.

 

Thanks again to all globally located Supply Chain Matters readers for your continued readership and frequent visits.

Thanks as well to our sponsors, clients, and network contacts for their continued support. We will no doubt, have yet another set of different topics of reader interest throughout 2017.

A final thought, why not consider having your company’s brand appearing as a designated sponsor or advertiser on this blog. Send us an email at info <at> supply-chain-matters <dot> com and we will respond with all of the information.

Bob Ferrari

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


Another Sobering Warning for Retail Industry- This Time from a Major Industry Supply Chain Influencer

0 comments

In a 2013 article, the New York Times had described Li & Fung as follows:

Li& Fung– the most important company that most American shoppers have never heard of- has long been on the forefront of globalization, chasing cheap labor to garment factories first in China, then elsewhere in Asia including Bangladesh.”

A lot has changed in four years but indeed, Supply Chain Matters has often referenced Li & Fung as the most influential player among global-based apparel supply chains and in supporting many major branded retailers in their apparel and other goods sourcing, merchandise selection and inventory procurement needs.

This week, the Asian based company reported a 47 percent decline in 2016 net profits, coupled with an 11 percent decline in annual total revenues. Further communicated was an indication that ongoing challenging conditions across the global retail industry would place additional challenges on its own business operations.

What caught our eye was these statements from the firm’s CEO as reported by Reuters:

I expect an unprecedented number of bankruptcies and store closures in the years to come. I remain cautious as (the) operating environment is deteriorating.

Li & Fung, being the largest influencer of apparel sourcing offering retailers access to tens of thousands of global suppliers in over 60 countries implies a large purview of business intelligence as to retailer buying practices, supplier payments and order volumes.

This is what makes the above Li & Fung statement so significant and rather sobering.

Our specific 2017 predictions and other research advisories specifically focused on the global retail industry continues to echo the unprecedented business challenges confronting retailers, driven from the implications of permanent consumer shifts to online shopping practices. These permanent forces will continue to present ongoing challenges, and retailers, and their respective supply chains, must adapt or suffer the consequences.

The casualties of retailers that have succumbed is building and so are the reports of bankruptcies and significant reorganizations in this year alone. Wal-Mart, one of the largest global retailers recently enacted job cuts and executive realignment directed at integrated online and physical store customer fulfillment. Last week, a sobering warning from Sears Holdings evoked added concerns and actions among retail suppliers and partners.

Now, one of the most influential players in merchandise and supply chain sourcing is communicating a similar sobering message.

The industry is already experiencing higher turnover and shorter tenures of CEO’s and C-suite executives, all trying to sort out different strategies to compete in an online and Omni-channel driven retail industry environment. The changes impacting retail continue to be described as unprecedented.

Supply chain leaders must get on board with fostering integrated online and physical store planning and customer fulfillment. Once again, the retail supply chain is not a collection of cost center activities to essentially support inventory procurement, warehousing and store replenishment. In today’s online fulfillment-driven retail model, the supply chain is a collection of capabilities directed at Omni-channel customer fulfillment and customer services capabilities. In 2017 and beyond, the alternatives are in-house, outsourced or hybrid supply chains.

Bob Ferrari

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


A Conversation with Tata Consultancy Services Global Supply Chain Practice and Center of Excellence

0 comments

While attending the Oracle Modern Supply Chain Experience conference a few weeks ago, this Editor had the opportunity to once again catch-up with Rich Sherman, a long friend. Rich has been a guest contributor of thought leadership content on Supply Chain Matters and is author of the book: Supply Chain Transformation- Practical Roadmap to Best Practice Results. Rich now serves as a Senior Fellow, Global Supply Chain Practice & Centre of Excellence (GSCP&CoE) at Tata Consultancy Services (TCS).

Some of our readers may be familiar with TCS’s efforts in supply chain management. Practice areas include:

  • Supply chain strategy including strategic assessments (data driven for both maturity and digital), and supply chain segmentation strategy support.
  • Planning as-a-Service including Integrated Business Planning strategy and technology deployment.
  • Source to Pay and Logistics and Fulfillment business process support.
  • Digital Supply Chain and Factory of the Future process support.
  • Service Management operational support.
  • Supply Chain Applications – of course, at OMSCE TCS touted its platinum partnership with Oracle for cloud and supply chain applications. However, TSC has partnerships for implementation and support for all of the major supply chain application vendors.

 

I was surprised to learn that the TCS GSCP&CoE now includes over 350 supply chain management domain experts supported by upwards of 3000 IT strategy, applications, and solutions implementation staff resources. Rich informed me that the TCS GSCP&CoE has been engaged in over 150 consulting engagements over the past two years, and further has become a generator of supply chain thought leadership for clients.

In our conversation, Rich and I touched upon a few of the current burning topics and current initiatives that are common across various industry supply chains. They include:

  • Omnichannel Fulfilment and end to end Supply Chain Control Towers
  • Integrated Business Planning beyond traditional S&OP with integration into execution
  • The Digital Supply Network and advanced manufacturing methodologies such as additive manufacturing (3D Printing assessments) for the Factory of the Future
  • as a service” and cloud based operations
  • Advanced Analytics including assessments, Artificial Intelligence, and Cognitive Analytics for analytics maturity lifecycle management

While the GSCP&CoE focuses on supply chain management consulting, they also tap into other business units for even deeper specialization. As an example, each of TCS’ industry business units have industry supply chain domain experts. TCS’ Analytics & Insights unit has more than 5000 data scientists (including Ph.D’s and even M.D.’s) using all of the available business intelligence tools to provide clients with highly advanced analytics including predictive and prescriptive analytics and insights. TCS’ Engineering and Industrial Services supports customized engineering services such as 3D printing assessments, design, and implementation as well as robotics and advanced manufacturing and material handling systems. Business Process Services provides outsourced operations across the enterprise and supply chain.

As always, it was intriguing to speak with Rich on the transformation of the supply chain into the “connected commerce” age and the maturing of digital technologies. It was also interesting to hear about the TCS that I didn’t know about and hope that now you also know.

Bob Ferrari

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


Supply Chain Matters Attendance at Oracle Modern Supply Chain Experience Conference- Part Four

Comments Off on Supply Chain Matters Attendance at Oracle Modern Supply Chain Experience Conference- Part Four

This week, Supply Chain Matters has been attending the Oracle Modern Supply Chain Experience conference being held in San Jose California, drawing over 2800 attendees. Oracle MSCE Jan 16 178x300 Supply Chain Matters Attendance at Oracle Modern Supply Chain Experience Conference  Part Four

In our Part One posting, we provided some highlights from the first’s day’s keynotes.

On our Part Two posting, we shared impressions of the Oracle S&OP Cloud application currently in-development.

Our Part Three posting provided highlights of the second day’s keynotes that were focused on future dimensions of transformation.

My goal in this update is to share my updated impressions related to current needs for supply chain related transformation.

As our Supply Chain Matters readers are probably aware, this industry analyst and Editor has be afforded the opportunity to attend many supply chain management focused conferences, either industry or technology focused. This week’s Oracle Modern Supply Chain Experience conference is no exception.

At many of such conferences, supply chain team leaders often describe various key learning derived from transformation or business change initiatives. Many exhibit very consistent and all-important themes such as insuring top-management sponsorship, a strong emphasis on change management or addressing process and data before layering advanced technology.

Of late, I have noticed a further learning, one that I can best describe as external or outside-in forces that compel the need for change at a far different pace of change.

Let me further explain.

A number of supply chain industry analysts often communicate the notions of supply chain transformation from people-process-technology dimensions at various levels of defined maturity. The so-termed phases of supply chain maturity charts are what I reference. Four or five phased, they all have common purpose. They often serve as a meaningful way for helping industry supply chain teams chart their transformation end-goal visions as well as benchmark a current state of organizational maturity. While such maturity charting can serve as a tool for change, it can sometimes transmit a message that continuous improvement is ok, or that taking pause at a given phase is acceptable. I worry aloud about such notions since some analysts, are not addressing the building external pressures within many industry settings that are now being communicated.

What’s different about today’s needs for transformation?

Read any business journal of late and the words economic and business uncertainty are stark and all too common. The global economy struggles to grow 3 percent annually, the U.S. and Europe a mere 2 percent. The Economist recently questioned whether global wide market presence and consequent global stretched supply chains may be faltering due to increased complexities and cost.

Individual businesses have shareholders demanding near-term returns and profitability for their investment and it seems that no business is immune from the force of activist investors. CEO’s have no choice but to prioritize efforts at growing top-line revenue growth, adopting new, more profitable digitally based business models while continuing to reduce business costs.  Growth is often translated to acquisition. Oracle senior executive Mark Hurd has been masterful in communicating such trends to CEO audiences.

Cost reduction motivates needs for restructuring or the flattening of organizational layers. If readers have had the opportunity to review our 2017 Predictions for Industry and Global Supply Chains, you are now aware that a whole new dimension of geopolitical uncertainty and business risk are prominent in the coming months.

What I hear of late is a new consistent theme of an external force for change. Our business has a new CEO with a mandate for transformation. Our business executed a merger and acquisition that introduced even more supply chain process and technology complexity. Regarding the latter, complexity is leading to more inefficiency and added costs. We are lacking the right data and information and our S&OP and operational decision-making processes are not keeping up with the current pace of business change.

The bottom-line is that the pace of transformation may no longer be as optional as it once was. Organizations may have little choice but to increase the pace of transformational change and supply chain leaders are expected to lead such efforts at a quicker cadence, albeit sometimes at an uncomfortable pace. That is why the notions of Cloud based applications and more leveraged use of digital advanced technologies such as analytics and IoT are gaining increased interest and senior management sponsorship. Consider that 2800 attendees are gathering at this supply chain management technology focused conference, often with needs to gain more learning and education as to new software and information management technologies.

We as analysts need to communicate supply chain transformative process maturity measures in dimensions of internal or external forces of change. The former having some timing discretion, the latter not so much. We need to remind teams that crisis is often the best motivator and mandate for an organization’s need for change. Industry supply chain teams face a building talent crisis yet beg for training resources. Our supply chain leaders of tomorrow are less tolerant for complexity and far more-savvy in the leveraged use of technology in their everyday lives and in conducting work. They embrace teamwork and team based problem solving. If your organization is laggard in talent development, your industry competitor will seize the opportunity with trained talent.

Finally, a message to technology providers. Some our communicating that now is the time for fostering innovation and new business models.  Some, such as Oracle, communicate the implications of millennial workers in their interaction with technology and decision-making. All of this is fine, but do not at all, dilute the reality that industry supply chains must continue efforts in reducing costs and complexity while increasing productivity.

External forces of change surround, and supply chain teams are now communicating those forces of external change.

Bob Ferrari

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.

 

 


« Previous Entries