Executive Briefings

How Complexity Will Shape Future Supply Chains

Most companies were caught in 2008 with way too much inventory in their pipelines, leading them to search more aggressively for ways to better forecast and manage demand, says Mike Giguere, principal and U.S. supply chain leader at PwC.

"Companies are trying to figure out how to take all the complexity of supply chains operating in today's global economy and simplify things so they can better manage demand," Giguere says. "They are finding there is no magic bullet."

Much of PwC's discussions with clients are around sales and operations planning and what an effective S&OP process looks like, says Giguere. "To answer that question we start by looking at the footprint of their business and the issues they need to address to satisfy their customers," he says. Assessing visibility into their customers' demand also is paramount. "Once we can understand these things, we can start to look at the processes around S&OP and demand planning and then at the technology to enable it," he say. Some organizations have not made significant changes in their structure for several years, even though the business environment has changed, Giguere notes. "Most companies need to be structured differently and their employees need to have different skills than they did 10 years ago," he says.

Some companies also need to overcome a belief that S&OP is a waste of time, says Giguere. "A lot of people see S&OP as a monthly cycle where people are forced to pore through reams of data to hopefully come up with some sort of answer," he says. "In fact, an effective S&OP process brings all aspects of an organization together- from marketing and new product development and introduction teams, all the way through the supply side and into distribution to the end customer," he says. When done right, S&OP can play a crucial role in supporting a company's strategic goals and achieving desired revenues, he says.

To view video in its entirety, click here 

Most companies were caught in 2008 with way too much inventory in their pipelines, leading them to search more aggressively for ways to better forecast and manage demand, says Mike Giguere, principal and U.S. supply chain leader at PwC.

"Companies are trying to figure out how to take all the complexity of supply chains operating in today's global economy and simplify things so they can better manage demand," Giguere says. "They are finding there is no magic bullet."

Much of PwC's discussions with clients are around sales and operations planning and what an effective S&OP process looks like, says Giguere. "To answer that question we start by looking at the footprint of their business and the issues they need to address to satisfy their customers," he says. Assessing visibility into their customers' demand also is paramount. "Once we can understand these things, we can start to look at the processes around S&OP and demand planning and then at the technology to enable it," he say. Some organizations have not made significant changes in their structure for several years, even though the business environment has changed, Giguere notes. "Most companies need to be structured differently and their employees need to have different skills than they did 10 years ago," he says.

Some companies also need to overcome a belief that S&OP is a waste of time, says Giguere. "A lot of people see S&OP as a monthly cycle where people are forced to pore through reams of data to hopefully come up with some sort of answer," he says. "In fact, an effective S&OP process brings all aspects of an organization together- from marketing and new product development and introduction teams, all the way through the supply side and into distribution to the end customer," he says. When done right, S&OP can play a crucial role in supporting a company's strategic goals and achieving desired revenues, he says.

To view video in its entirety, click here