Growing practice of supply chain modeling requires more than just technology smarts
What types of supply chain roles are on your company’s career webpage? What skills are important for new hires to possess in order to manage this increasingly critical area of the business? Many of the best practices LLamasoft has advocated related to supply chain design as a repeatable, sustainable process within the business have been highlighted in a recent article, Companies See ‘Massive Shift’ in Search for Supply Chain Talent, Wall Street Journal, May 22nd, 2015, Loretta Chao. Here are a couple of examples.
You can’t hire just anyone to be a supply chain design analyst. In the article Chao states that, “Industry experts say an understanding of technology and an ability to work in a global environment are increasingly important in the supply chain, forcing managers to look for people with a rare mix of specialized skills to manage this crucial aspect of their business.” The large global businesses we work with every day are attesting to the importance of the people and process aspects of developing supply chain design teams. The people side of supply chain design cannot be underestimated, and that means you can’t put just anybody into the role of supply chain analyst. Unlike execution systems, you can’t rely on a software system to simply “give you an answer”. Leading businesses understand that, with a given set of inputs and distributions there could be a range of outputs that business leaders will review and then decide on the best course of action at the time.
Analyzing the supply chain requires more than just technology savvy. Developing analytical skills and the ability to understand the growing complexity and interdependencies of cost, service, risk, capacity, tax and demand make the analysis of the end to end supply chain a demanding position and one that needs constant development.
Chao also cites the huge volume of global enterprise data businesses are generating which is both an enabler of more detailed and accurate analyses and a potential pitfall if not managed and understood. Working with some of the world’s most complex supply chains has driven LLamasoft to develop demand classification, inventory optimization and simulation technologies that can incorporate large data sets and include end to end modeling of SKU level flows to understand inventory stocking levels.
Retailers developing an omni-channel distribution strategy are incorporating simulation of digital consumption replenishment processes in order to understand how the continuing shift of digital demand with options of store fulfillment processes can best be designed.
Supply chain design should be a top-down, executive-driven process. Large enterprises are consolidating the formerly independent functions of procurement and logistics and creating broader supply chain executive functions and responsibility. In order to have the greatest impact on the business, supply chain design must be a top-down, executive-driven process with leadership that understand the importance of creating a repeatable design process that is linked to business value and goals. Supply chain design is the third discipline required for supply chain management, sitting alongside planning and execution but requiring different skills, technologies, and processes.
Supply chain leadership should have end-to-end supply chain view for greatest benefit potential. Supply chain design has always been about understanding the end-to-end supply chain and trade-offs among competing metrics: efficiency versus flexibility, cost versus service, local versus global, off-shore versus near-shore, etc. Businesses need to have a team that owns the end-to-end supply chain or they end up creating functional islands and run the risk of missing opportunities for cost savings and efficiency improvements that can only be recognized when viewing the holistic supply chain.
Finally, building a supply chain design center of excellence (COE) has, as one of its driving values, to break the barriers of decisions made in isolation. Companies that develop these global teams end up developing a more holistic view of the company that can drive out costs and inefficiencies so often seen in departmentalized companies.
Wrapping it up
In short, be aware that it may become more challenging to recruit the right analysts, but don’t hire just anyone who has the right degree. Successful team members should be effective problem solvers—people who think analytically and are natural researchers and implementers of new processes. The growing practice of supply chain design has at its core a view and consideration of the end-to-end supply chain picture, and as such should staff and recruit talent equipped with this holistic perspective as a way to achieve business goals.
John Ames is Senior Vice President of Customer Success at LLamasoft. John’s career in supply chain has spanned over 15 years and his expertise spans across numerous technologies including demand planning, inventory optimization, finite capacity scheduling, product lifecycle management, and network design. John has worked with both large and small consultancies to craft partnerships that best serve the end client to deliver best in-class solutions for strategic supply chain analysis. He received his MBA at Northwestern’s JL Kellogg graduate school of management and received his BBA in marketing at Stephen F. Austin State University.