The following is a recent Kinaxis Supply Chain Expert Community posting.
As a blogger and consultant on important matters related to global supply chains, I have to keep a constant eye toward business trends, particularly when mainstream business media begins to take note such trends. Over the last few weeks, there have been multiple stories noting critical supply shortages beginning to impact numerous industry supply chains.
Perhaps your organization is dealing with these same challenges related to supply shortages.
Earlier in the month, The Wall Street Journal published a story (paid subscription may be required) noting that sales of telecommunications equipment to wireless carriers who are expanding their networks has been constrained by critical parts shortages related to electronic components. Component supply shortages among Alcatel-Lucent SA and Telefon AB L.M. Ericsson have hampered AT&T Inc.’s abilities to expand its wireless network A recent posting on CNET notes that Apple Inc. is faced with a critical shortage of the single most costly component incorporated in both its recent iPad and iPhone4 products.
This week, the Journal featured a more in-depth article noting that many firms are grappling with supply chain ramp-up issues with demand surges for respective products. Many are uncertainas to whether current surges in customer demand are permanent or just a temporary re-stocking phase. Two examples noted include discrete manufacturer Timken Company, that is attempting to meet surges in the demand for its various bearings products without having to invest in additional resources in added capacity or labor, and Corning Inc., that has been caught off-guard when brisk sales of autos fueled demand for its emissions control filters and devices.
We have often noted on the Supply Chain Maters blog that in 2009, at the height of the global recession, companies were highly responsive in their efforts to rapidly cut inventories. Ramping-up is a whole new set of challenges. I’m sure many in our community are already aware and trying to overcome these challenges.
Interesting enough, industry analyst firm Gartner has raised some negativity regarding the value of previous investments in advanced supply chain planning or analytics. In our Supply Chain Matters Annual 2010 Predictions published in late 2009, we noted that business analytics and the ability to perform rapid scenario planning will become the key 2010 competency for aligning and responding to resource needs across global supply chains. Within that prediction was the following notation: “Sales and operations planning teams will find themselves in constant analysis or interchange among sales, marketing, supply chain and product management teams to assess multiple options for increasing revenue, promoting products or dealing with negative events. Tradeoffs will need to be analyzed and information will change constantly”.
As witnessed by the noted stories, these types of situations are indeed playing out in many settings. If there is any doubt as to value of supply chain advanced planning and analytical technology, it will surely come when the final results of 2010 manifest themselves in these industries. Now more than ever, advanced planning and analytical capabilities coupled with what-if decision making are indeed core capabilities.