We’re thrilled to have yet another Kinaxis team member join the ranks of those recognized by Supply & Demand Chain Executive magazine as a ‘Pro to Know’. Our very own Dominic Thomas, VP of Business Consulting, was named a 2016 Provider ‘Pro to Know’ for his expertise in solving supply chain challenges.
I sat down with him to get some insight into what those supply chain challenges are, and how companies can overcome them.
What do you feel are the biggest supply chain challenges companies are likely to face in year ahead?
Some of the primary challenges supply chains will face are increased complexity, lack of visibility into key metrics, and the growing need for segmentation. More work needs to be done to bring together the functions of sales and operations to jointly manage business and supply chain strategies to help mitigate these collective challenges.
How can businesses overcome those challenges?
- Increasing Complexity: Companies are dealing with substantial SKU proliferation. Twenty years ago, a company may have had only a single version of a product with a handful of SKUs. Today, that single product may have multiplied into several versions defined by unique attributes, labeling requirements, product specifications, and jurisdictional controls. SKU proliferation, shorter life cycles, a more demanding end consumer, with significantly more available options to satisfy their needs, coupled with mergers and divestitures currently taking place are all causing significant stress on supply chains. Fundamental questions like how to harmonize part numbers across multiple ERP systems, incorporate supply chain partners into supply chain decisions, quickly assess the right course of action when the plan is no longer actionable, and allocate constrained capacity and materials in line with key corporate objectives are more critical than ever before.
- Metrics Visibility: Going hand in hand with increasing complexity is the need to properly manage and monitor key performance metrics. When a supply chain deals in multiple units of measure and/or multiple currencies, this becomes even more important. Companies need to be able to first determine whether something can be done, and then determine whether it should be done. They need to understand rapidly the repercussions and impact of decisions across the network and the associated costs. Waiting two weeks for that analysis is like doing a Google search and waiting until tomorrow to see the results. It’s just not effective.
- Segmentation: Needing to provide different offerings to specific types of customers is becoming a common thread across most supply chains. Organizations need to understand the unique needs of each one of their end customers, and how they can tailor service offerings to meet those needs. Businesses need to determine what those differentiated supply chains should be, how to prioritize end user needs, and help them compete not only on a product level, but at a supply chain level as well.
What is the importance of connecting the supply chain function to a company’s broader strategy?
I believe better supply chain alignment should be a company-wide goal. People on the front lines of a company’s supply chain don’t always know how their day-to-day activities are related to top floor decisions. How best does a senior executive get the entire organization aligned to meet corporate objectives?
Managers often struggle with communicating what’s important because the systems in place are inadequate and difficult to work with. Allowing employees to accurately evaluate the consequences of their supply chain decisions in advance of execution should be top of mind. Removing the “I didn’t know” excuse, facilitating effective collaboration across teams, and providing the ability to assess a decision will ensure that supply chain is aligned with corporate objectives. Making sure each employee understands how the work they do relates to senior management’s vision for the company is paramount, and provides greater incentive for supply chain practitioners to reach their goals on key performance indicators.
It’s not just better tools that allow companies to achieve this overall strategy alignment. It’s better business processes as well. There needs to be a place and an opportunity to facilitate a high level of cooperation across all business units and functions to achieve harmony. By ensuring everyone is on the same page, practitioners will be enabled to make the right decisions not only for managing the supply chain, but also for the overall health of the company as a whole.
If a company can only make one change to their supply chain this year, what should it be?
Define your strategy. Understand what your strengths, and more importantly your weaknesses, are from a supply chain perspective. Determine where your organization is headed. Develop quantifiable goals that support the overall strategy.
What makes you so passionate about supply chain?
It’s a fascinating area to focus on. The supply chain matters! It delivers things that you and your family use every single day. Helping businesses find innovative supply chain solutions that solve their specific challenges is incredibly rewarding. I get up every morning looking forward to going to work.