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Describing an Exponential Organizational and Supply Chain Capability

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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

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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.


Significant Announcement Between APICS and JD.com in Supply Chain Management Skills Development

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This week, supply chain management professional association APICS and China’s E-commerce company JD.com announced a strategic agreement to establish nationwide standards for the Omni-channel supply chain capability within China and to advance supply chain performance of the e-commerce industry in the region.  APICS logo Significant Announcement Between APICS and JD.com in Supply Chain Management Skills Development

Supply Chain Matters views this announcement as rather significant.

It represents an important outreach from APICS providing China’s business leaders, academia, and global enterprises with valuable insights, information, and actionable data necessary to succeed in supply chain management.JD logo 300x110 Significant Announcement Between APICS and JD.com in Supply Chain Management Skills Development

As our international Supply Chain Matters readers are acutely aware, China’s very large and fast-growing e-commerce sector surpasses that of the United States. At the same time, because of the inherent logistics and other customer fulfillment challenges unique to China with its high-density cities and large urban landscapes, the E-commerce providers within China often directly control the elements and logistics related to customer fulfillment. Likewise, suppliers of online merchandise come from a variety of supply chain management skill and business process experience dimensions.

JD.com describes itself as an online provider of high quality Chinese goods sourced in China, and delivered to customer’s location in a speedy manner. The company currently operates 7 fulfillment centers and 256 warehouses and a total of upwards of 6900 customer delivery and pickup stations across China, all staffed with its own employees. The firms stated corporate values include a customer-first perspective supported by continuous learning.

APICS Supply Chain Council has had active relationships with Chinese companies which culminated in the re-launch of a China Regional Advisory Council in August of last year which established initial educational priorities for this region. A source indicates that an executive forum held at the time drew upwards of 150 attendees including JD.com. These initial efforts led up to this week’s announcement.

APICS further announced the formation of a Chinese Corporate Advisory Board (CCAB), which will be designed to facilitate discussion between APICS and leading Chinese companies like JD.com. The CCAB will serve as a corporate sounding board on APICS products and how best to leverage these resources in China. The significance applies to joint efforts to prepare the next generation of Chinese supply chain talent more effectively.  APICS has committed to providing China’s business leaders, academia, and global enterprises with valuable insights, information, and actionable data necessary to succeed in supply chain management.

This professional organization will additionally help establish the JD Supply Chain Academy within JD University, a nationwide supply chain talent development center and e-commerce supply chain research center. Efforts will be directed toward developing course curriculum and research topics focused on the e-commerce industry in China. Initial activity will focus on educational needs for JD.com’s key supplier base as well as the online firm’s internal IT teams who continue to develop more advanced technology aides to support current processes such as drones, big data analytics and other systems applications. The goal for the supply chain academy is to provide teams with broader end-to-end supply chain knowledge and the interrelationships of supply chain processes with key performance indicators.

The announcement indicates that both organizations will also cross-reference the Supply Chain Operations Reference (SCOR) model with the JD.com database to develop a specific SCORmark Omni Channel Benchmark for China. Plans call for the performance improvement tool to eventually be made available to the major suppliers of JD.com and other stakeholders within the APICS corporate community worldwide.

APICS Executive Vice President for Corporate Development, Peter Bolstorff indicated to Supply Chain Matters that pilot deliverables among target groups could come as early as later this year.

This week’s announcement comes on the 3rd year anniversary of the merger of prior Supply Chain Council with APICS.

Bottom-line, this collaboration provides APICS with an important partner and advocate for broader supply chain management skills development in both supply chain business process mapping and individual skills development, including the growing dimensions of online E-commerce fulfillment.

Bob Ferrari

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


THOMASNET.com and ISM Honor This Year’s Complement of 30 Under 30 Rising Supply Chain Stars

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In several ongoing editorial commentaries, Supply Chain Matters, has amplified the growing talent gaps that are today impacting multiple industry supply chains. As more baby boomers reach retirement age, supply chain and procurement executives are looking with trepidation at a looming talent gap. The industry needs an influx of fresh faces. To help in this effort, our blog has helped to provide visibility to programs and initiatives from a number of organizations to attract younger professionals to careers in supply chain management.

We are therefore pleased to call reader attention to this year’s complement of the winners in the THOMASNET.com© and Institute of Supply Management© (ISM) 30 Under 30 Rising Supply Chain Stars Recognition Program that were jointly announced in a press release today.

In 2014, both organizations conceived and jointly sponsored this recognition program with the stated goal to advance the future of the supply chain profession thru recognition of up and coming professionals making significant contributions within multi-industry supply management roles. For each year of this program, we have been delighted to can provide individual recognition to annual honorees including the 2016 complement of rising stars, as well as to interview some individual stars. It has been extraordinary for us to ascertain the level of responsibility, passion, and overall leadership that such young professionals have already achieved in their careers, along with their ongoing enthusiasm for gaining job satisfaction in their roles in sourcing, procurement, and supply chain management.

This year’s Megawatt star is Daniel Kaskinen, 29, who was recognized for significant achievements as strategic sourcing manager with Sonic Automotive, Inc., of Charlotte North Carolina.

The listing of this year’s 2017 stars further includes:

  • Andrew Bagni, Procurement Manager, General Dynamics Mission Systems, Fairfax, VA
  • Andrew Boone, Manager of Finance, and Planning, Graphic Packaging International, Inc., Atlanta, GA
  • Gerardo Cabrera, Global Community Manager, Flex, Guadalajara, Mexico
  • Kiara Conde, Transformation Analyst, Wells, Shell Exploration and Production Company, Houston, TX
  • Abhishek “Abhi” Dahiya, Global Commodity Management, Senior Advisor, Dell Technologies, Round Rock, TX
  • Amanda DeCook, Sourcing Associate, T. Kearney, London, UK
  • Sarah DiPietro, Supply Chain Analyst, 3M Company, St. Paul, MN
  • John Fowler, Production Supervisor, Halliburton, Spring, TX
  • Jonathan “Jon” Futryk, Senior Sourcing Specialist, Crown Equipment Corporation, New Bremen, OH
  • Anthony Garwood, Lead Commodity Management Specialist, GE Aviation, Grand Rapids, MI
  • Corey Gustafson, Senior Buyer, Deluxe Corporation, Shoreview, MN
  • Nicholas “Nick” Imison, Subcontract Administrator 1, Northrop Grumman Systems Corp., San Diego, CA
  • Elaine Jolliff, Purchasing and Supply Management Specialist, Contracting Officer & Team Lead MTE CMT, S. Postal Service, Washington, D.C.
  • Teddy Lee Knox, Strategic Operations Manager, Zipline Logistics, Columbus, OH
  • Peter LaFave, Strategic Sourcing Consultant, Anthem, Inc., Thousand Oaks, CA
  • Lisa Marie, Manager, Transformation, Arconic (formerly Alcoa Inc.), Pittsburgh, PA
  • Brian Meyer, Sourcing Leader – Minerals and Global Components, Owens Corning, Toledo, OH
  • Matthew “Matt” Montana, Category Lead, Senior, Pacific Gas and Electric Company, San Ramon, CA
  • Barbara Noseda, Global Sourcing Associate, External Manufacturing Supply Integration, LifeScan, Johnson & Johnson, Chesterbrook, PA
  • Jeff Novak, Lead Commodity Manager, S. Steel Corporation, Pittsburgh, PA
  • Andrew Paulsen, Senior Buyer, SpaceX, Hawthorne, CA
  • Blake Pryor, Supply Chain Management Advisor, Chevron, Luanda, Angola
  • Bernadette Quiriconi, Fortive Business System Leader, Fluke Corporation, Everett, WA
  • Sara Robichaux, Strategic Sourcing Category Lead – Services, Apache Corporation, Houston, TX
  • Michaela Romanias, Asset Scheduler, DuPont, Wilmington, DE
  • Subhash Segireddy, Supply Chain Program Manager – Network Strategy & Analytics, Cisco Systems, San Jose, CA
  • Ruchir Sud, Finished Vehicle Logistics Operations NAFTA, FCA US LLC, Auburn Hills, MI
  • Jaime Todd, Business Analyst, Supply Management, American Red Cross, Charlotte, NC
  • Tianhou “Tian” Zhong, Senior Analyst, Global Strategic Sourcing, Coach, Inc., New York, NY

As our readers can well appreciate, this year’s nominees came from a wide variety of industry supply management settings. Detailed profiles and photos of all winners can be viewed by visiting this designated THOMASNET web site.

%name THOMASNET.com and ISM Honor This Years Complement of 30 Under 30 Rising Supply Chain StarsOnce again, Supply Chain Matters would like to extend our Tip of the Hat recognition to each of these latest star recipients along with our best wishes for continued achievements and recognition in the field of supply chain management.

Bob Ferrari

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


A Persistent Theme- Be Prepared for a Year of Continual Supply Chain Analysis

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If our readers have had the opportunity to review all of our 2017 Predictions for Industry and Global Supply Chains, you probably picked-up on a dominant theme, that being the election of Donald Trump as President of the United States, and what that could imply for U.S. global trade policies and consequent industry supply chain impacts.

We presume that some readers might ask why raise such concerns so early, after all, legislative actions take time, especially when a change involves a lot of special interests. Industry supply chains have established global value chain links and in theory, should be able to respond to many forms of external-driven changes. However, we continue to submit that the changes being contemplated for U.S. trade and tax policies are far more potentially impactful to industry supply chains, from both an inbound supply and outbound product demand lens. We reiterate that sales and operations planning teams need to be prepared for the various implications that may come along sooner than one would expect.

We pen this posting at roughly two months into the Trump presidency, and already, the dizzying pace of news, speculation and editorial regarding the potential effects of a U.S. anti-trade policy are enough to motivate many a supply chain practitioner to have a drink or two at a local pub. Mr. Trump’s personal attacks on traditional and social media based news outlets adds more fuel to polarization of viewpoints and constituencies, and his actions to utilize Twitter as a personal attack medium against the media, legislators, or specific corporations has everyone on-edge, ready to pounce on the offense.

In the United States, the atmosphere smacks of confrontational politics. The opposition political party is of the belief that the Trump Administration agenda leans far to the right on trade, tax policy, immigration, and climate change, ignoring the realities of a globally based economy, the forces of globally dependent markets and the stark signs of climate abnormalities. Political discourse now focuses on floated proposals regarding double-digit import tariffs or a border adjustment tax.  Recently, Warren Buffett termed such an approach as a “sales tax” on U.S. imports with consequent impacts for increased retail prices of imported goods.

Meanwhile, with major elections pending across Europe this year, right leaning candidates are now emboldened for change and attacking the status-quo of global trade, immigration, and economic growth.

If there is a benefit to the existing U.S. environment, it is that of broadened education on global supply chain flows and potential impacts.  In a prior blog posting, we shared highlights from a briefing with the American Apparel and Footwear Association who provided us data on that industry’s supply chain flows. A published New York Times report indicates how ‘America First” policies could harm the U.S. aerospace sector citing data indicating that “more than 13,000 U.S. companies’ make-up the Boeing supply chain nerve center”, and are dependent on Boeing’s revenue growth. Boeing represents the single largest U.S. exporter in dollar value. China and Mexico combined account for $21.5 billion in U.S. aircraft related exports, while aerospace related imports from Mexico alone account for $2.4 billion. Our news desk has featured other published reports citing supply chain U.S. import data related to retail and automotive supply chains as well.  The most pertinent data, however, is that related to various geographic sourced component costs contrasted to landed and customer cost to serve costs. In the end, supply chains need to best serve individual customers while meeting specific business or product margin goals.

The halls of the U.S. Congress are now congested with industry lobbyists. More than 25 major corporations have formed the Made in America Coalition which include pharmaceutical, chemical, and major equipment manufacturers. On the other hand, firms highly dependent on product imports such as major retailers and certain specific manufacturing companies are rallying to oppose forms of an import tax. Thus, there are industries currently pitted against other industries in a lobbying effort to educate lawmakers as to the real consequences of an American First trade and tax policy.

Once again, we reiterate that Supply Chain Matters is not a political focused blog.

Our role as a supply chain education blog compels us to alert industry supply chain teams to be prepared for continual analysis of potential supply chain impacts or revised product sourcing to better educate senior management on the cost and/or revenue impacts of different scenarios.

We are reiterating these messages because there may be some do nothing tendencies to let the political debates run their course, then, one can respond and act.

We would argue that such a strategy is ill-timed, essentially for two reasons. First, how up to date is your supply chain data related to component and landed costs? Do you have the capability to run multiple planning scenarios related to supply chain sourcing with the ability to update important data when needed? Hint- we are not referencing multiple spreadsheets passed along at various intervals. Do you have the trained people with the skills to perform such analysis on a continual basis, while multi-tasking on other job responsibilities as-well?

The other essential motivator is that an industry competitor or disruptor, who has amassed accurate data, and has completed and educated management as to all the analysis of different scenarios, already will have the head start on evaluating existing of new sources of qualified suppliers and supply chain services that can meet cost objectives, perhaps eliminating supply options from your organization’s consideration.

In today’s hyper competitive markets, one must be always prepared with the most accurate and insightful information relative to important decision-making. Preparedness and speed are the new table stakes.

If you have not already, be prepared for a year of constant supply chain network analysis and scenario-based planning.

The stakes are very high.

Bob Ferrari

© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.

 


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