THE SUPPLY CHAIN BLOG
Most Important Supply Chain Analytics Skills
The demand for data analysis skills by supply chain organizations is growing. What are the most important skills needed for performing effective supply chain analytics? “In addition to the technical skills required, supply chain analytics practitioners and supply chain consultants need deep domain knowledge in the industry as well as excellent communication skills.
The demand for data analysis skills by supply chain organizations is growing. What are the most important skills needed for performing effective supply chain analytics? “In addition to the technical skills required, supply chain analytics practitioners and supply chain consultants need deep domain knowledge in the industry as well as excellent communication skills.
Business Analytics Among IT Skills Expected to Be in High Demand in 2014
“Computerworld cited analytics expertise as the second-hardest IT skill to find, hinting that the six-figure salaries these professionals command may be worth every penny. Eighteen percent of survey respondents reported that they intend to hire for this critical need in the next year.” Original Source: http://midsizeinsider.com/en-us/article/business-analytics-among-it-skills-expec
Analytics Driven Business Decisions
“Many of the organizations engaged in big data analytics programs report that their programs are increasingly adding advanced capabilities to find patterns in the inherent complexity of multiple data sets and structures. In order to accomplish this, respondents are applying optimization models and advanced analytics towards business process improvement”
In Big Data Endeavors, Don’t Neglect Softer Business Skills
“But the ability to communicate, relate and navigate throughout an organization—so called “softer skills”—are especially needed to propagate analysis and communicate the impact of data-driven decision-making.”
Original Source:http://www.customerthink.com/blog/in_big_data_endeavors_don_t_neglect_softer_business_skills
Conclusion
Supply Chain Analytics practitioners and supply chain consultants need to have the ability to see the big picture, they must have the technical expertise as well as the operational knowledge and communications skills.
3 Ways to Use Supply Chain Analytics to Drive Profitability
Supply Chain Analytics are not only used for realizing cost savings opportunities. Supply Chain Analytics also offer great untapped potential for increasing operational performance. Three important applications that will drive profitability and growth include: 1. Building supply chain models that provide actionable insight, 2. Connect demand and supply in real-time and 3. Analyze supplier risk.
Supply Chain Analytics are not only used for realizing cost savings opportunities. Supply Chain Analytics also offer great untapped potential for increasing operational performance. Three important applications that will drive profitability and growth include: 1. Building supply chain models that provide actionable insight, 2. Connect demand and supply in real-time and 3. Analyze supplier risk.
Build Supply Chain Models that Provide Actionable Insight
According to Edith Simchi-Levi, Supply Chain Analytics requires a deep understanding of supply chain management and operations—as well as the modeling and mathematical techniques that will provide true, actionable insight into how to improve operations. “This involves first building a model of the current system, what’s called a baseline, and then validating by comparing the model with results, the details of the business. This is actually a pretty complicated process.”
“…sometimes the models are just something new and surprising that you probably wouldn’t have been able to come up with without the model, but sometimes the surprise indicates some sort of a problem with the data or the assumptions, and it would require reviewing any discrepancies to see, to really understand them and make sure that the model is reflecting reality correctly.” Original Source
Check out this video on The Role of Analytics in Supply Chain and Operations Strategy:
Connect Demand and Supply in Real Time
“One of the most important attributes of next-generation supply chain analytics is that they will address issues beyond the supply chain. To optimize operations, companies need to link their supply chains with metrics and analytics on the demand side. For example, at the simplest level, price changes or promotions for products will change demand and hence the required supply of those products. Similarly, changes in the availability of products and components should be reflected in marketing and sales processes.” Original Source
Analyze Supplier Risk
“Many companies recognize that the success of their operations is highly dependent upon their suppliers. Yet supplier risk analytics have hardly moved beyond simple metrics and reports in most organizations. The most sophisticated approaches to supplier risk monitoring and management—used by companies that heavily depend on external suppliers and contract manufacturers, such as Cisco Systems—are only somewhat more analytical.” Original Source
Conclusion
There are many opportunities for applying supply chain analytics to your business. Facts matter when they are collected from the source and handled close to the reality with the right expertise and tools. Facts can improve efficiency, drive profitability and growth.
The Biggest Obstacle to Successful Supply Chain Analytics
Supply Chain Analytics tools and methods open up the opportunity to drill deeper into supply chain data for finding more ways to save money. However, the biggest obstacle to success are organizational silos and the silo mentality. This is because coordination across departments is where the greatest opportunities lie to create efficiency. Data democratization is the solution to this problem of silos in the organization.
Supply Chain Analytics tools and methods open up the opportunity to drill deeper into supply chain data for finding more ways to save money. However, the biggest obstacle to success are organizational silos and the silo mentality. This is because coordination across departments is where the greatest opportunities lie to create efficiency. Data democratization is the solution to this problem of silos in the organization.
Most large companies still work with siloed departments. Each department has little to no idea what another is doing. They usually each drive their own programs without communicating with each other, and they are rarely aligned.
Hadoop success requires avoidance of past data mistakes
“An organizational silo, like a data silo, has lots of inputs but few outputs: it’s a people bottleneck. Too often if a business analyst wanted data they had to go to a central analytics team, wait in line, get the analytics team to understand their need, wait a few days for the results, realize that the results weren’t what they thought they’d asked for, and repeat the process until one side gave up. Then when business analysts complain and ask why on earth it could take so long, analytics just says, “There’s a lot of math involved. You wouldn’t understand.””
Original Source: http://www.techrepublic.com/blog/big-data-analytics/hadoop-success-requires-avoidance-of-past-data-mistakes/
Why CIOs Should Care About Supply Chains, Procurement
“To achieve real-time analytics, companies will need to change that by opening the black box silo and integrating the data with other enterprise systems. Of course, this is the sweet spot for middleware companies like Software AG, whose solutions can open up that data.
This is something enterprise technology journalists typically have not covered because B2B systems have operated in a silo, separated both by technology and by responsibility from other enterprise systems.”
Silos in the Supply Chain
“The silo problem that Nagaraja observes in the technical architecture of companies can normally be found across the spectrum of activities in which companies engage. Catherine Bolgar advises that companies must avoid “the gaps in corporate performance” created by silos [“Silos,” Zurich Financial Supply Chain Risk Insights, 24 May 2010]. She writes: “It takes a lot more for a company to succeed than for each employee to do his part. A company is composed of many opposing interests. Product designers want the best materials, but purchasing managers want the cheapest. The finance department wants the leanest possible inventories, but the sales department wants large stocks in order to sell big orders with a promise of quick delivery. The competing departments are like the proverbial blind men exploring an elephant, each perceiving the animal from a narrow perspective. These management silos can undermine the best business resiliency plans and pose problems for supply-chain and risk management.” “
Good companies break down silos by implementing cross-functional teams. They get the teams working together on supply chain analytics projects. They share data and make it easy to send and receive information. Successful supply chain analytics requires analytic tools and the systems mentality to apply them across silos.
3 Reasons Why You Should Do Supply Chain Analytics
Supply Chain Analytics is used to help companies gain a competitive advantage. We look at the information collected from a host of supply chain measures and then draw conclusions. We can do “what-if” analysis as well as assess where profitability will be impacted.
Supply Chain Analytics is used to help companies gain a competitive advantage. We look at the information collected from a host of supply chain measures and then draw conclusions. We can do “what-if” analysis as well as assess where profitability will be impacted.
The 3 reasons why we should do supply chain analytics:
Make better supply chain decisions while reducing waste
Model profitability impacts
Gain competitive advantage
Supply Chain Analytics: What is it and Why is it so Important?
Supply chain analytics is an art and science to looking at raw data with the aim of drawing conclusions about information. The goal is to help a company make better supply chain decisions while reducing waste and increasing supply chain performance.
Rising fuel costs, off-shoring, and increased competition from low-cost outsources are some of the driving forces for doing supply chain analytics.
Original Source: http://www.industryweek.com/blog/supply-chain-analytics-what-it-and-why-it-so-important
The Role of Analytics in the Race for the Supply Chain of the Future
We need to both understand the supply chain as a complex system and have the ability to perform effective use of data. According to Lora Cecere, “only 11% of companies have the capabilities that they need to evaluate a “what-if analysis” and only 24% of companies are able to model profitability impacts of changing conditions in their complex systems.”
Original Source: http://data-informed.com/role-analytics-race-supply-chain-future/#sthash.pwYV2cwR.dpuf
The What, Why & How of Supply Chain Analytics
We need to match not only knowledge of mathematical techniques but also knowledge of the supply chain. Supply chain analytics is an area of investment and competitive advantage for many companies. Supply chain analytics helps companies understand what their business is doing as well as come up with new solutions and ideas for where they are going.
Original Source: http://www.opsrules.com/supply-chain-optimization-blog/bid/297730/The-What-Why-How-of-Supply-Chain-Analytics
Establish Davis Database Presentation at CSCMP
Establish Davis Logistics Cost and Service Database is an ongoing annual survey that manufacturers, distributors and retailers participate in to receive a customized logistics benchmarking report of logistics cost and service. The benchmarking database is the longest running, since 1976, and with most entries in the logistics industry.
Establish’s consultants Conrad Ross and Piotr Pregner will be presenting the 2013 Establish Davis Logistics Cost and Service Database at the CSCMP annual global conference in Denver 22 October.
Establish Davis Logistics Cost and Service Database is an ongoing annual survey that manufacturers, distributors and retailers participate in to receive a customized logistics benchmarking report of logistics cost and service. The benchmarking database is the longest running, since 1976, and with most entries in the logistics industry. The findings are presented annually at the Council of Supply Chain Management Professionals (cscmp.org) Annual Global Conference. Participation in the Database is free and confidential. It’s easy to participate on-line and our logistics consultants are ready to help you, should you have any questions.
Internal Business Partnering in Procurement
Dustin Mattison interviewed Bill Young. Bill discussed Internal Business Partnering in Procurement.
Dustin Mattison interviewed Bill Young. Bill discussed Internal Business Partnering in Procurement.
Internal Business Partnering
Bill believes Internal Business Partnering is important because category management has been mainly about cost reduction and a lot of companies have been through at least one, two, sometimes three phases of category management. The result is that they have plowed the fields and saved a lot of cash. Now purchasing is starting to look at how it can create value, as well as just reducing costs. In order to do that, they need to be much, much closer to their internal clients, but some of those internal clients are suspicious of purchasing because they have some experiences of having their budgets raided. Bill says that purchasing has perhaps a little bit of ground to catch up on before it’s fully trusted as a business partner.
Internal Business Partnering is really a form of consultancy. It’s being the expert on how supply markets work; what you can get out of supply markets; how you can manage them better; how you can improve their efficiency and effectiveness; how you can extend the resources of the organization beyond its direct employees and into the companies that provide it with important services; extending the scope of the resources of a company.
According to Bill what we’re seeing is that IT departments in many companies have already taken purchasing back into their function. You can see companies where they have IT strategic sourcing managers in effect doing exactly what purchasing wanted to do and used to do, and they’ve hollowed out that bit of procurement. The same could be happening in HR, where, if you look at the average HR department, approximately fifty percent of everything they provide to the business is actually coming from external suppliers. They need to have some sort of core competence within the HR function and managing those suppliers, and they’re asking, “Why would we get procurement to do this if it’s so important?” The future of procurement depends on stepping up to the plate and learning how to do this business partnering; otherwise, some of these departments are gonna take it in-house, as IT already has done.
His recommendations are that companies should obviously think hard about Internal Business Partnering in Procurement. It tends to be the service companies that are pioneering this area, and they include the advertising companies, the media companies, a lot of the Internet companies. In fact, Bill saw recently a job description for what looked to any other company like a category procurement manager at Amazon. The words procurement, purchasing, and buying didn’t appear in the job description. He thinks the next stage is going be the high-service companies but still with manufacturing elements, especially pharmaceuticals. They should be looking hard at this area and looking at the transition. The interesting thing will be for a lot of companies who never really fully embraced category management, can they go straight from classical procurement to value procurement? Some have but it’s a big step. So, looking at this area, looking at the skill levels and facing the challenge, that’s the next phase.
About Bill Young
Development of Sales and Procurement Capability
Questions To Ask When Collaborating With Suppliers
Dustin Mattison interviewed Sara Husk. Sara discussed collaboration with suppliers and customers.
Dustin Mattison interviewed Sara Husk. Sara discussed collaboration with suppliers and customers.
Sara works for a company called Imaginatik. Imaginatik specializes in providing innovation infrastructure both from a technical and services perspective, primarily to Fortune500 companies. Sara works with a lot of companies on their innovation program on a day to day basis.
One of the things Sara and her team is noticing is that companies increasingly want to go outside of their four walls to collaborate, innovate and develop new things. This can be with customers, suppliers or vendors. They really want to get the most that they can out of the entire group they are working with. It can be partners, universities, community groups, state regulatory groups, etc. These things can all help bring value back to the company.
The first things Sara usually asks are “why do you want to get into this?”, “what is it you are hoping to gain?”, “what does success look like?”, “what are those intangible outcomes?”.
The tangible outcomes might be to get some type of new way of manufacturing a part. Intangible might be to build a strong relationship with suppliers so that they bring some of their best and creative ideas.
You are also looking at things like why you want to be the brand of choice in the marketplace to be the group to collaborate with. You also need to think about who owns the outcome and how to handle these types of pieces as well. There is a lot that goes into it in terms of the thought process up front.
There are a lot of things that are involved with thinking this whole thing through. You need to ask questions such as: How do you get people aligned with you? How do you get people participating with you? What is in it for the other parties?
Lean Supply Chain & Logistics Management
It seems that there has always been a focus on cost cutting in the Supply Chain & Logistics function. This focus is due to the very real “leverage” effect that reducing operating costs can have on the bottom line. This strategy has been somewhat successful, but has left a lot on the table in terms of not only cost reduction opportunities but productivity and quality as well.
It seems that there has always been a focus on cost cutting in the Supply Chain & Logistics function. This focus is due to the very real “leverage” effect that reducing operating costs can have on the bottom line. This strategy has been somewhat successful, but has left a lot on the table in terms of not only cost reduction opportunities but productivity and quality as well.
In the past five years or so, the philosophy of “Lean Manufacturing” has been grown to include the Supply Chain & Logistics function and can enable management to attain the improvements mentioned above.
So what is Lean all about and how can it help you? In a nutshell, Lean is a team-based form of Continuous Improvement which focuses on identifying and eliminating waste from the customer’s viewpoint. Waste is defined as activities that do not add value to the customer. After all, the customer is ultimately paying for the end product (or service), which to them is the value added effort of transforming raw materials into finished goods. Activities that don’t add value to the customer such as production being stored, inspected, or delayed, products waiting in queues, and defective products do not add value; and as a result, they are 100% waste.
In fact, in most Supply Chains (more like Supply “Web” when you think about it), the full “cycle time” or the time material or information enters it until it exits it to the customer, is primarily non-value added or waste. Very little of this time is actually value added from the customer’s viewpoint (referred to as “processing time”). This cycle time is referred to by many in Lean manufacturing as “dock to dock” time. The shorter the “dock to dock” time, the more Lean your manufacturing process is. The same can be said in terms of your Supply (and Demand) Chain.
In Lean terms, Supply Chain & Logistics areas are frequently viewed as a “box” (i.e. one activity such as warehousing) or a “line” (i.e. transportation) on a Value Stream Map, which is a form of process flow mapping unique to Lean which separates value added and non-value added activities starting at the customer and working its way through your system back to the supplier. It is only recently that Supply Chain & Logistics practitioners have started to adopt Lean principles and tools to analyze and improve this critical area.
There are many concepts and tools that are in the Lean practitioner’s toolkit that can be applied to your Supply Chain & Logistics function. Many are relatively simple and easily understood such as 5S-Workplace Organization, Visual Workplace and Layout. Others have greater complexity such as Batch Size Reduction, Quick Changeover, and Total Productive Maintenance (equipment related waste) for example. All require ongoing training, support and commitment from both management and the rank and file.
To get started, at the very least, requires a fundamental understanding of what is non-value added or “waste” from the eyes of the customer (both the ultimate customer and the people downstream from you who you are giving material or information to) in order to start down the path ofeliminating or at least reducing the identified waste.
The “Seven Wastes” as described by Taiichi Ohno of Toyota includeTransportation, Inventory, Motion, Waiting, Overproduction, Overprocessing and Defects. A good way to remember these wastes is the acronym “T.I.M. W.O.O.D.”. Many people, including myself include an Eighth waste of Underutilized Employees or Behavioral waste.
It’s not really “rocket science” and in fact, once you and your team start thinking in this way, you’ll wish you started on the Lean journey sooner!
In the upcoming months, I’d like to delve into each of the Eight Wastes in this column and relate them to the Supply Chain & Logistics function to help practitioners start to “wrap their head around” this valuable tool as it’s not a “fad” and is truly here for the long term. It’s important to realize that, when successfully implemented, Lean can be a competitive weapon which can be a great advantage in these tough economic times.
In the next blog we’ll start with perhaps the largest waste, and one that covers much variability and drivers of waste…Inventory.