subscribe: Posts | Comments | Email

Articulating Supply Chain Needs in the Language of the C-Suite

0 comments

Q1 economic data provides some important signposts for industry supply chain teams, especially in their increasing needs to boost agility and responsiveness to overall supply chain capabilities. By our lens, the data reflects that supply chain leaders must more than ever, be able to translate needs and requirements in the language of the C-suite and in the notions of desired business outcomes.  Boardroom 300x200 Articulating Supply Chain Needs in the Language of the C Suite

We have often admired Oracle CEO Mark Hurd’s ability to demonstrate how to effectively communicate in the language of the C-Suite. That includes his observations that in a global economic environment where economies grow 2-3 percent on average, and where investors expect or demand far higher returns, something must give. He describes CEO priorities as concurrently managing for growth as well as cost savings.  Companies must take market-share from competitors or out-innovate the competition in products, added services or business capabilities, or risk the peril of being out-innovated by an industry disruptor. Hurd then provides meaningful evidence of how Cloud-based technology and applications can address the needs of top-line growth with lower overall costs.

Latest Data

Last week, The Wall Street Journal reported (Paid subscription required) that in the first quarter of 2017, the largest U.S. companies have been booking their strongest quarterly profits in five years, mostly from keeping a lid on spending for new projects, plants, and headcount. According to the WSJ, data on capital expenditures suggest that companies remain somewhat cautious on large expenditures. The report observes: “Profits at S&P 500 companies jumped an estimated 13.9 percent in the first quarter, growing nearly twice as fast as revenue.” While there is some notable industry exception such as declining growth and profitability for food and consumer staples providers, business leaders have been generally pleasing investors with attractive returns while being rather stingy on investments other than stock buybacks and added dividends.
As noted in a prior blog commentary, data related to U.S. GDP growth in and PMI activity in the first quarter adds some uncertainties for businesses. The report indicates that some businesses have reluctantly increased select hiring because of overt needs to increase overall productivity as top line revenues grow in environments that are generally lean in their ability to support added business needs.

Turning to hiring, the Labor Department reported that the unemployment rate in the United States dropped to a ten-year low of 4.4 percent while hourly earnings are up a mere 2.5 percent, on average, from a year earlier. Likewise, our view of various global PMI indices among key global regions such as the Eurozone and Asia indicate that manufacturing and supply chain employment is on the rise, albeit a gradual rise.

Thus, the job market is tightening, particularly for skills that are in high demand such as automated manufacturing and analytics based supply-chain decision-making. Supply chain leaders are fully aware of existing cross-functional talent need shortfalls and that challenge is likely to increase in the coming months.

Our sense is that the U.S. economy, and perhaps certain Eurozone economies are once again reaching a tight job market where in-demand people skills will be even more difficult to acquire without boosting compensation and benefits. Skilled employees will quickly understand their added worth in a tightened labor market. For emerging and mid-market manufacturers and services providers who must always operate on lean budgets, the people impacts will be more magnified.

 

Existing Realities

Industry supply chains are literally caught in the middle of these forces.

Pressures to meet the needs of digital process transformation and the online Omni-channel environment remain unabated. The quest for added supply chain cost savings continues across many industry sectors. Those pressures are passed along to suppliers and services providers across multiple tiers of the supply chain with the result that agility or responsiveness to new business opportunities or for product and process innovation are hampered across the product value chain.

In many cases, legacy processes and backbone systems have not changed since the era of client-server computing and point-to-point integration of transactions and data. The result has been more augmented processes and added spreadsheets to support needs for quicker decision-making demanded by the business. IT is now under enormous pressure to reduce infrastructure and data integration costs, because of these same business forces. Supply chain teams are likewise losing resources that were supporting the various patchwork processes.

Something must give and we believe many supply chain leaders know it.

 

Communicating the Language of C-Suite

Communicating in the language of the C-Suite implies advocating plans for the supply chain to support business priorities and desired outcomes, including supporting top-line revenue growth while continuing to reduce costs and improve productivity and timely decision-making.

The forces of digital transformation are twofold. First, transformation leads to meeting changing customer needs and expectations as well as added areas to support top-line revenue growth. Second, digital transformation provides supply chains the ability to leverage advanced Cloud-based computing and technologies that avoid needs for major legacy system upgrades that risk major business disruption. Cloud adoption places the burden of any added or changed IT infrastructure, data security and systems growth needs on the Cloud services provider.  The result can be a more predictable recurring operational cost line on the budget with the ability to leverage needs for digital transformation along with needs to support required people productivity needs.

The IMF recently increased its forecast of global growth to 3.5 percent citing building momentum for the Eurozone, China, and the United States. If that occurs, businesses will be under the gun to again boost shareholder returns, take maximum advantage of added growth opportunities while continuing to boost productivity and cost savings.

Now is the time to advocate supply chain process, technology and people needs in the vernacular of the C-Suite. It requires a twofold agenda for helping the business to increase revenue and customer growth while better controlling costs and worker productivity. It is also about enabling smarter, more informed, and timely decision-making prediacted on anticipating market and customer needs.

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.


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

0 comments

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.


Rapidly Changing Skills and Requirements in Procurement- Consider Attending ISM 2017

0 comments

Included in our 2017 Predictions for Industry and Global Supply Chains (Available for complimentary downloading in our Supply Chain Matters Research Center), there are two specific predictions that will directly impact various industry supply chain sourcing and procurement professionals in the coming months.

We predict that the role of the Chief Procurement Officer (CPO) will continue to evolve in 2017, with an emphasis towards strategic advisor skills.  That will likely include analyzing the impacts to a rapidly changing global supply chain sourcing picture, added supply chain risk factors, and needs for higher levels of joint innovation from suppliers. A challenge for sourcing teams among U.S. based manufacturing, retail, or services firms will be educating senior management on the implications of any potential tariffs, import taxes or trade barriers brought about by the new Trump Administration and a Republican Party dominated U.S. Congress. In prior blog commentaries, we have advised teams to be prepared for a year of continual supply chain analysis and scenario-based planning exercises. We brought reinforcement to messages and advisory actions from strategic consulting firm KPMG and contract manufacturing services provider Flex indicating that planning scenarios are already underway among various industry sectors, all trying to more precisely determine impacts to business margins, product strategies, or existing and future component or finished goods manufacturing strategies.

We declared that one of the most significant challenges in 2017 will be in procurement skills development and filling-in skill gaps as procurement’s role moves deeper toward a strategic advisory role.  Increasingly, a fully integrated strategic sourcing and procurement process will become necessary and that will likely require augmented investments in technology and associated team skills beyond singular procurement business processes. The function will be called upon to broaden collaboration and decision analysis efforts with product management and key global and domestic suppliers.  Initiatives directed toward regulatory compliance changes, ongoing supply chain sustainability initiatives and changing contracted indirect services needs will require teams to increase collaboration efforts with other supply chain and business functions.

This challenge is not confined solely to procurement but across many other manufacturing, supply chain, IT, and product management areas. So much so that we have included Prediction Three- A Supply Chain Talent Perfect Storm within our ten 2017 predictions.

The Institute for Supply Management (ISM) serves as the principal professional organization for procurement. In March of 2016, we had the opportunity to interview Tom Derry, CEO of ISM.  Regarding the topic of skills development, the following was stated:

The responsibilities and scope of procurement are changing rather rapidly and there is a need to constantly stay current. To be effective, procurement professionals need to understand the broader capabilities of the supply chain such as planning, logistics and transportation. A procurement professional does not necessarily need to be an overall expert, but should be knowledgeable to the needed capabilities and impacts of decisions across the entire supply chain.”ISM2017 logo 002 Rapidly Changing Skills and Requirements in Procurement  Consider Attending ISM 2017

In just about two months, ISM will be conducting its annual 2017 conference which will be held May 21-24, 2017 at the Disney Coronado Resort in Orlando Florida.

Featured keynote speakers will include former UK Prime Minister David Cameron, and former Chairman of the Joint Chiefs of Staff, General Colin L. Powell, USA (Ret.).  The agenda notes that Mr. Cameron promises to deliver a riveting and eye-opening firsthand account of his own experiences during his tenure as Prime Minister, including lead-up to the Brexit decision. That will include his unique perspective on current geopolitical and public policy issues, many of which impact global business and the supply chain. He will further address a range of events in Europe and worldwide, and what they could mean to procurement professionals. General Powell will speak to armed conflict-the ultimate challenge to supply and logistics, as well as the leadership traits included in his recent book: It Worked for me In Life and Leadership.

A total of 73 sessions will be offered based on various skill development levels ranging from fundamental to mastery level. Learning tracts include Economic, Business and Professional segments along with various Experience segments including the very successful Emerging Professionals Experience sessions. This author and supply chain industry analyst had the opportunity to attend last year’s ISM 2016 annual conference and the sessions I sat in were very educational and insightful. Two subsequent prior Supply Chain Matters postings highlighted a fascinating session: What Private Equity Expects from Sourcing Leaders, and highlights of interviews with ISM CEO Dom Derry and others on changing procurement skill needs.

Please consider joining me in attending ISM 2017. The full agenda and registration information for the ISM 2017 Annual Conference can be obtained by clicking on this dedicated ISM 2017 conference web site link or by clicking on the conference logo appearing in our Upcoming Conferences panel to the right.

Supply Chain Matters readers should take note that ISM is currently offering a $400 registration discount if registration is completed by March 30, so consider acting sooner than later.

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

1 comment

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.


« Previous Entries