PREPARING FOR THE NEW ERA OF CONCURRENCY
Picking up again from our piece two weeks ago, regarding work done by Matt Davis of SCM World entitled “Concurrency — Embracing the death of S&OP, SCOR and other supply chain paradigms”, we will share with you the action plan that he proposes.
Matt first noted that futurist Alvin Toffler once said: “The future always comes too fast and in the wrong order.” In a sentence, Mr Toffler captured three strategic questions currently set before supply chain executives:
1. How do I understand what is hype and what is truly disruptive?
2. Where should I be willing to make bets and how do I decide where to bet big?
3. Am I prepared for the magnitude of change that concurrency might require?
As you lock in strategic plans and begin the path forward to 2020, these three questions should be a regular gut check on your journey. Based on our discussions with the SCM World community, the following six actions are some of the best practices to help keep you on the right path.
Action 1: Determine what’s possible versus what is possible right now.
Just three years ago, there was a general global chuckle when Amazon announced its drone strategy and yet, in 2016, over a third of supply chain executives now describe drones as disruptive and important to supply chain strategy.
Digitisation will not impact every region identically nor on the same time horizon. As part of understanding what bets to make, consider plotting technologies on expected viability on time horizon as well as use case. By layering time horizon versus different use cases, you will get clarity on what might be hype and what might seem like hype but is an actual market opportunity. Amazon’s drones might have seemed like hype but in a few years, the technology will have very viable use cases in suburban areas. Finally, as you complete the mapping, then consider where a few smart experiments could help you to test your assumptions.
Action 2: Answer the right questions as a leadership team.
Innovators tend to have more questions than answers. But in answering the questions, clarity can be gained on the path forward.
In preparing for the new era of concurrent planning, have your leadership team answer these five essential questions:
1. Do we have the right balance of strategy and execution?
2. Do we have the cultural autonomy and accountability to democratise decision-making?
3. Are we prepared for the scale of what processes and technologies we may displace?
4. How can knowledge workers use technology to augment business processes and analytics?
5. Knowing what we know now, what would our organisations look like if we designed them from scratch?
Action 3: Hire a scenario planning analyst.
It’s a tactical action every organisation can take. Shell has institutionalised scenario planning as a skill by learning from experts to break down the process into a series of actions. For example, most simulations will weigh four potential outcomes against known trends in the industry like pricing, risk events, supply constraints, etc.
Scenario planning as a process does not initially require any technology. By simplifying the process into a set of steps, you can begin to build the capability across your entire organisation before making a big technology investment. The power and value of simulation will be best realised when you have many (or all) employees engaged concurrently in designing, running and analysing scenarios as a regular part of planning.
Action 4: Dedicate time to review what actually happened.
Let’s call it a poor man’s historian. When things go horribly awry, teams will conduct post-mortem analyses to find root causes for the failure.
What happens when things go well? Or even just as planned? Regular postmortem analyses can serve as a mechanism to test assumptions in the planning process.
As part of its NFL business, Nike runs what it calls its “Monday morning quarterback meeting” to review performance from the prior week.
The process helps with execution planning by identifying issues fast, but it also helps with long-term planning by helping the team to get a better understanding of what scenarios were assumed and which actually played out in reality.
Action 5: Make your technology roadmap visual.
The hype around “digital” may just be the perfect means to finally tackle a holistic strategy for end-to-end supply chain technology. One resource to consider in this mapping is SCM World’s report, “What is the Matrix? A Roadmap for Chief Supply Chain Officers Coping with Digitisation”. It provides a useful, yet simple, framework to map existing technology solutions along with emergent digital technologies across the end-to-end demand and supply landscape.
Action 6: Catalogue your planning library across all functions.
A planning library or planning table is a tactical approach to setting a foundation towards concurrency.
Because the scope and scale of concurrent planning will require organisations to allow for autonomy but also identify areas where multiple parties should be proactively engaged, these exercises will prove valuable now and several years into the future.
One consumer packaged good manufacturer completed a “planning mapping” exercise as part of an end-to-end integration initiative. Each functional leader was tasked with cataloguing planning activities in his or her respective areas. Lists were divided into strategic planning and execution planning processes based on the frequency and scope of the activity.
The next few years will be some of the most volatile in recent memory. Those who are asking the right questions now will shape a path toward an era of concurrent planning in which simulation, democratised decision-making and historian insight allow them to adapt and win in any environment.
The Link is coordinated by Barry Elliott and Chris Catto-Smith as an interactive forum for industry professionals. We welcome all input, questions, feedback and news at: BJElliott@ABf1Consulting.com, cattoc@freshport.asia