We’ve come a long way in supply chain management.
Remember when we were still relying on ERP or point solutions that ran on mainframe solutions? (That may all seem laughably out-of-date today, but it was a big step forward at the time.)
Later, we moved on to SCM solutions that ran in a client/server configuration. Today, the journey continues with cloud SCM solutions.
Every journey has a destination. Yours should be supply chain excellence – which will come through smarter demand planning and collaboration.
Getting to Supply Chain Excellence
So, how do we achieve supply chain excellence? We’ve been talking for years about sales and operations planning (S&OP) as a means to get there. S&OP is a concept first developed by consulting firm Oliver Wight in the 1980s, and it’s still an industry standard today. It’s about bringing the intelligence of many stakeholders to the planning table to refine the supply chain management process.
Who couldn’t benefit from more intelligence? Still, not everyone is convinced – at least not enough to tackle S&OP head-on.
But the good news is that if you’ve gotten stuck on your journey, you’re not alone. A Supply Chain Digest report in September 2013 showed that 45% of companies were doing “little scenario analysis.” Only 10% of companies described their S&OP as “world class” or “excellent.” Nearly one-third – 32% – of companies rated their S&OP process as “below average.”
Of course, the bad news for the laggards is that S&OP isn’t even the end game of excellence in the SCM journey anymore. We’re now headed toward integrated business planning (IBP). IBP is a discipline that uses today’s best strategies – including the SocialTM Supply Chain – to increase collaboration and enhance communication in ways that drive business success.
The current opportunity is huge for a company that recognizes the value of supply chain excellence and takes the challenging steps to get there.
Restart Your Engines
If your team has stalled at the side of the road – if it’s focused on business as usual – then you’ll need to look at the problem and figure out how to restart your engine. You can gain competitive ground simply by getting back on the road with purpose. But you’ll probably need to overcome technical and strategic limitations such as email-based communication, spreadsheet-based forecasting, and department-contained planning.
In my next article, I’ll take this idea to the next level and talk about what excellence looks like, and what (and whom) it will take to get there with IBP.
Here’s the roadmap you need: “Achieving Supply Chain Excellence: Your Journey Forward.” This is our newest white paper, and it’s free. Download it today.