This column reintroduces a supply-demand matching planning process that involves “demand shaping with supply in mind”. It was the type of process that was needed during the pandemic. When there were severe supply shortages, both supply and demand became uncertain. Also discussed is the projection that this process may need to be deployed more often during the looming Longevity Economy which might result in severe labor shortages, as well as result in other types of supply constraints. The process, however, could also be always useful for creating a role for supply-side Planners to help generate additional revenue and profits.
Larry Lapide
Winter 2023-2024
4
Supply chain plasticity is a novel concept borrowed from neuroscience whereby the brain reorganizes its neural pathways to restore function following injury. This concept is applicable to supply chains, whereby production can be safeguarded amid catastrophic events by realigning across unaffected pathways in the supply net- work. I offer two case studies of plasticity from my own experience: a beverages company faced with a heat wave and a CPG company faced with a hurricane damaging its production plant. In both scenarios I reveal the options available to switch operations to different pathways in the supply network to mitigate disruption and provide continuity. I also highlight the importance of not perceiving plasticity as reversion to the pre-crisis state; rather a permanent adaptation to the new reality.
Patrick Bower
Winter 2023-2024
5
The digital transformation of supply chain management, expedited by the pandemic, un- derscores the need to invest in automated forecasting and planning solutions to safeguard financial stability amid fluc- tuating costs and economic uncertainties. The pandemic highlighted the limitations of isolated supply chains, as disrup- tions rippled across supply networks, emphasizing the need for cross-enterprise collaboration. This article reveals the need to move beyond traditional data sharing, and how the future of collaborative forecasting involves a commitment to shared data, technology, process, and people—underlined by the digitalization of supply chains. We also discuss the challenges of cross-enterprise collaboration, keys to success, and the required skillsets to succeed in this environment, with a nod to the rise of the ‘Business Scientist’.
Allyson Wood
Jeff Tackes
Winter 2023-2024
4
Despite the increasing pressure to reduce working capital across many industries, many multinationals still optimize their inventory in the end-to-end supply chain in siloes. This leaves room for improving costs, customer service and working capital. This article explains the concept of multi-echelon inventory optimization and how to successfully implement it in your organization, along with best practices and lessons learned from a real life MEIO implementation in the CPG industry.
Maarten Driessen
Winter 2023-2024
4
Forseveraldecades,outsourcingproductiontothefarEasthasbeenhighlyeffective in reducing production costs for American firms. Recent events, however, have exposed the fragility of long, global supply chains and the rise of China as a middle-income country has eaten into profit margins. Reshoring and nearshoring is picking up pace amid a torrent of geopolitical tension, protectionist tariffs, and COVID. In a world where China is no longer the reliable and cost-effective workshop of the world, what options do US manufacturers have? In this article we discuss the merits and demerits of nearshoring to Mexico which, with its proximity to the US market, improving industrial base, affordable labor, and positive regulatory environment, presents a viable option for many US firms.
Barry Neal
Richard Gehlmann
James Reckitt
Louis Rolland
Winter 2023-2024
6
Supply chains, comprising functions like supply planning, demand planning, logistics and manufacturing, must manage variables that directly or indirectly impact customer service, cost to serve, and cash. How well these variables are managed inform overall supply chain performance. In this article I reveal how the performance of each supporting function can be measured with KPIs and subsequently improved. I also stress the importance of re- siliency metrics in the post-COVID environment, and how connecting operational metrics to financial metrics crystalizes operational performance across a range of functions into a top down view of enterprise performance—imperative for both for operations leaders and senior leadership.
Sunil Bharadwaj
Winter 2023-2024
3
Fed Chairman Powell has acknowledged that there will be rate cuts in 2024. Dr. Perryman of the Perryman Group suggests the US economy is slowing following a torrid third quarter, but a soft landing will be achieved. Similarly, Dhawan of the Economic Forecasting Center at Georgia State University indicates that the economy is weaker than the headline data suggests, and business investment is consistently trending down. Relatedly, Consensus expects the nation’s GDP growth rate to increase by just 0.64% during the period Q1 of 2024 to Q4 of 2024 which would represent a slowdown in economic activity.
Nur M. Onvural
Winter 2023-2024
6
While S&OP/IBP are effective in managing operational uncertainty and risk, there are some risk factors that are not captured in these processes. Exogenous risk takes the form of technological, environmental, competitive, political, financial, demographic, economic, and other factors. These are the bigger picture, long-term forces that can present serious risk to a business, whether it be risk of falling market share or risk to the very existence of the business itself. In this article, I discuss how strategic and long-term planning leaders can better understand exogenous risk, and develop a practical cross-functional framework to actively mitigate it. I reveal how to develop risk hedging strategies with real-life examples taken from a software company replacing an established software solution and a restaurant chain embarking on an aggressive growth strategy.
Mark Lawless, ACPF
Fall 2023
4
Demand planning serves as a central hub supporting multiple functions in the business with reliable forecasts and insight. Collaboration with Sales, Finance, Operations and Supply is therefore key to the role. This willingness to engage, cooperate and support other functions, however, can easily devolve into supporting too many requests from outside functions with non-planning related tasks. In this article I outline how to maintain a healthy balance between supporting functions to work towards better planning without burdening Demand Planners with tasks outside their scope of work. With these tips borne form my own experience, you’ll be better placed to push back against unreasonable demands on your time and ensure sufficient focus on core planning activities.
Daniel Fitzpatrick
Fall 2023
3
Baby Boomers are living longer. This group of retirees—who are wealthier, healthier, and more educated than prior age cohorts—are creating a ‘Longevity Economy’ fueled by their retirement incomes and investments. There is currently a dearth of goods and services that future retirees will need as they decline in physical and mental acuity. Over the next few decades, significant new product innovation will be needed to meet their demands. In this article, a seniors’ demand model to help forecasters and planners tap into this formerly neglected age group is introduced.
Larry Lapide
Fall 2023
4
Energy services companies like SLB face the same planning challenges as manufacturers and retailers in that demand must be forecasted and an appropriate supply response must be coordinated. To this end S&OP is the planning process of choice but, considering the unique nature of services businesses, it comes with an extra step. In this article I reveal how Energy companies are adapting S&OP to their unique needs to meet the complexity of resource planning inherent in the energy industry. Further, I discuss how SLB is combining S&OP with predictive analytics to provide much-needed digitalization that connects demand management to resource planning, resulting in an E2E planning process starting from the demand signal and ending with resource deployment.
Rym Khelil
Fall 2023
3
Risk Management is a key component of operational and strategic planning, but often a formalized Risk Management framework is often left out of consensus planning processes like S&OP and IBP. In this article I discuss how to identify the risks and opportunities for a portfolio of products, using a Risk Register (or matrix) that leverages SWOT analysis and documents probabilities and impacts of individual scenarios on specific products or categories. This Risk Register can be easily incorporated into the S&OP process for greater understanding of scenarios and better planning responses.
Geoffrey Shive, ACPF
Fall 2023
5