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How Can Companies Respond Rapidly to Demand?

Trevor Miles, vice president of thought leadership with Kinaxis, details industry's major supply-chain management challenges – in particular, the difficulty of obtaining full visibility of supply and demand, and dealing with the volatility of markets.

New information-technology can actually help companies to develop new products, says Miles. The trick is avoiding gaps between applications – gaps that often are filled by legacy tools such as spreadsheets and e-mail.

Older techniques result in the multiple, manual entry of data, leading to error, inconsistency and latency. In such cases, companies “spend a lot of time trying to make sure they’re doing the right thing, rather than working on the right thing.”

Many companies seem wedded to their spreadsheets, even though they’re aware of the format’s shortcomings. Miles says executives have “a very legacy approach” to thinking about business processes. As a result, they’ve created “islands” of automation that do not add up to a coherent, smoothly flowing supply chain.

“People want to get away from that,” he says, “but it’s the manner in which they are trying to enable those different processes that is just lacking.”

The traditional command-and-control structure requires individuals to go through an arduous approval process in order to transmit data between functions and disciplines. Automated production systems, popular in the 1990s, embedded the process of cascaded planning, whereby the plan is handed off sequentially, and managers “have no idea of the chaos they are creating for the next function. The underlying technology embeds those barriers.”

The lesson: You can’t impose new technology on old business processes. Supply chains need to match their modern-day needs with systems that can provide visibility among all partners, and match supply with increasingly volatile demand.

“Embedding those capabilities into a unified whole is really where the value is,” Miles says.

To view the video in its entirety, click here

Keywords: supply chain, supply chain management, supply chain planning, supply chain risk management, inventory management, logistics management, sourcing solutions, global logistics, retail supply chain

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