By Ed Lawson
We're in the midst of the perfect storm for physical supply chain: constrained supply, disrupted routing, enhanced compliance, and global health risks. All of which have created price spikes, reneged contracts, and a flipping of control between shipper and importer. All importers are now re-examining strategy to see through the current turbulence, and to mitigate future risks. If agility means having options, and resilience means being able to mitigate risks to avoid crisis, then it can certainly make sense to reconsider international import logistics to seek visibility, alternative routing, a wider market of shippers, and even dual sourcing.
In this discussion we're joined by special guest Richard Fattal, co-Founder of Zencargo, to explore different views on the market, what can be done at strategic level in the medium to long term, and a look at the lasting impacts of this time.
Freight risks: where are the short and medium term threats? Planning mitigation strategy
Reducing concentration of risk in your logistics value chain: how to go about this, and at what point? Visibility of goods in transit: unlocking better customer experience Agility: a current buzzword or the mantra fo future-proofing your logistics? WHO FOR?
Industry sectors: current practitioners from all sectors
Org. size (annual T/O): typically £50m+
Roles & remits: Heads of: Supply Chain, Freight, Logistics, Transport with a role in designing and implementing analytics capabilities
ABOUT INTENT DISCUSSIONS
All discussions are private, held under the Chatham House Rule and moderated by INTENT with approx. 6-8 participants for 45-90 mins of candid, interactive discussion (not a passive webinar) Some discussions include subject matter experts from member-recommended INTENT Partners, others are exchanges of best practice, experiences and ideas among practitioner members only Discussions are shaped by participants according to their interests and questions We may adjust participation to avoid competitive sensitivities and ensure productive discussion WHEN?
Thursday 9th September (14.00 BST / 15.00 CEST) for max. 90 minutes
Hosted by Ed Lawson, Director, Intent
Expert guest: Richard Fattal, co-Founder, Zencargo
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By JP Doggett
Although there continue to be many challenges in arriving at a robust plan in the first place, this discussion focused on how to close the gap with execution or, in other words, reduce time lag or latency of deviations from plan being predicted and detected to being successfully managed.
Latency definition: how quickly can you predict something is going to happen? How quickly can it be filtered in the hierarchy? It’s fundamental to how the SC and finance are organised. Latency is a combination of data availability and process
Latency -1 (predictive)
Scenario planning is a key way to decrease latency and even predict demand. Demand Sensing is another key part of the solution: in retail this can be social sensing. Social sensing gives you a picture what’s happening amongst consumers that is about to affect demand. In a manufacturing context this could be about introducing sensors to monitor real time consumption. Or in manufacturing, it can be about getting information on supply chain disruption, eg issues at the ports. Latency +1 (responsive)
The pandemic has pushed businesses towards short term decision making. But it’s the mid term (S&OP) monthly horizon will influence the profitability. Translating from demand forecast to ordering requires a reduction or elimination of silos. Latency is most often caused by layers of hierarchy. Siloed decision making is a very common challenge. Large businesses are often regionally siloed too - hence the recognition of need for a centralised decision making unit.
Be aware that the flip side of empowerment can be regionally made decisions that affect other parts of the global business.
Slower decision making is exacerbated when finance does not trust the IBP number as much as its own financial forecast. There is a growing convergence of finance into supply chain; often the CFO is the ‘co-pilot’ to the CEO.
Suggested approaches to IBP and reducing latency
A ‘whole organisation’ approach: IBP cannot just be a supply chain project - it must be integral and understood by all functions. The more senior the sponsorship, the better the chance of success. It’s important to maintain your customer promise: supply chain is therefore a part of that. Having a centre of excellence can be a good way to tie it all in. The COE should be made up of people outside of operational roles in order to be truly effective. Adopting a design thinking approach to customer lifecycle management is a useful approach - this can help other functions better understand the value of supply chain in the context of the customer promise. Cloud technology reduces latency by having fewer technology anachronisms - applications are up to date, and are automatically maintained. This reduces lag. IBP requires a business case. To do this, it can be valuable to look at what will happen if nothing is done, what are the costs to inaction. Do not overfocus on a single instance platform across a large organization. There can be multiple clouds, and technology can interface. Organisational structure & people emerging best practices
Of course, technology is not the only lever available for closing the planning - execution gap: organisation structure and process design can either hinder or help the flow of critical information and the capability for prompt, informed decisions to be taken.
High performing organisations often demonstrate a non-siloed structure whereby, instead of a traditional SCOR-based model, the focus is on end-to-end processes like IBP, O2C and increasingly omnichannel and process owners who are responsible for holistic optimisation. Critical areas for best-in-class cross-functional alignment include product / service innovation, fulfilment & aftercare and planning. Increasingly these teams have business partners who, for example, have both a deep, systematic understanding of supply chain operations and financial control to bridge those potential silos. These are often supported by Centres of Excellence, particularly for analytics which major on optimising segmentation, cost-to-serve and customer behaviour. For planners in particular, it pays dividends not to confuse planning and execution and recognise that scheduling is not the same as planning as the latter requires particular skill sets around cross-functional communication in particular. Planners are likely to be more effective if they think and talk like business owners in terms of customer experience and profitability rather than a narrow focus on, for example, improving OTIF scores by a couple of points. 210414 IBPX Oracle Intent roundtable v1 (1).pdf
09 September 2021 13:00
14 September 2021 07:30
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