Consultants Voice. Views from Over Thirty Consulting Companies on Supply Chain Excellence. By Lora Cecere Founder and CEO. Supply Chain Insights LLC

Transcription

1 Consultants Voice Views from Over Thirty Consulting Companies on Supply Chain Excellence 8/21/2012 By Lora Cecere Founder and CEO Supply Chain Insights LLC

2 Contents Research 2 Disclosure 2 Research Methodology and Overview 2 Executive Overview 3 State of Supply Chains 4 The Results 4 Conclusion 9 Methodology 10 About Supply Chain Insights LLC 12 About Lora Cecere 12 Copyright 2012 Supply Chain Insights LLC Page 1

3 Research This independent research was 100% funded by Supply Chain Insights and is published using the principle of Open Content research. It is intended for you to read, share, and use. When you use it, all we ask for in return is attribution. We publish under the Attribution-Noncommercial-Share Alike 3.0 United States Creative Commons License and Supply Chain Insights citation policy. Disclosure Your trust is important to us. As such, we are open and transparent about our financial relationships and our research processes. Research Methodology and Overview This report is the second report in a two-part series. The first report published in May 2012 and represents the Supply Chain Executives voice and perspectives on supply chain excellence. This report is a companion report reflecting the views of consulting partners working on supply chain across multiple industries. In this report, we contrast the two views while sharing insights from the Consultants Aggregate Voice on supply chain excellence. The methodologies for the two quantitative studies are shown at the end of this report. Copyright 2012 Supply Chain Insights LLC Page 2

4 Executive Overview For consultants trying to drive supply chain excellence, there is no substitute for Line of Business leadership. As shown in Figure 1, the overarching concern by consultants implementing supply chain management projects is the lack of understanding of supply chain fundamentals by executive leadership teams. This gap has many symptoms and takes many flavors. One characteristic is for the leadership team to have the desire to have systems without the willingness to invest in the systems and people to fix the problem. Another is the gap in understanding of the future impact and potential of new technology trends. In Figure 1, we share the open-ended responses from the supply chain consultants. Figure 1 Supply Chain Consultants Challenges and Goals Copyright 2012 Supply Chain Insights LLC Page 3

5 State of Supply Chains For the purposes of this report, a supply chain consultant is a person that spends time working with third-party supply chain teams, often in the industries of retail, manufacturing and distribution, to improve supply chain processes. This often includes the implementation of technology. In this report, we share insights from a recent quantitative study completed in July 2012 with input from over 30 different consulting companies. We contrast this data obtained from the consultants to input gathered in a separate, but related, study fielded in March-April 2012 with responses from over 60 supply chain leaders. The Results Overall, supply chain consultants and line of business leaders have general alignment on supply chain maturity, business trends and future outlooks. As to be expected, the consultants are further ahead in their thinking. In the study there are slight differences in four areas: Consultants Focus on Enablers While Supply Chain Line of Business Leaders Focus on Outcomes. Consultants implementing supply chain technologies are more excited about the technology enablers of Software as a Service (SaaS), Big Data Supply Chains and Business Analytics, while the Supply Chain Leaders are more excited about the potential outcomes to drive improvements in Demand Sensing and S&OP. The understanding of how these technology shifts can impact supply chain processes is much clearer in the minds of Consultants than Supply Chain Leaders in Line of Business leadership roles. Consultants Believe Their Clients Have a Greater Satisfaction with Supply Chain Execution Systems and a Lower Satisfaction Rate with Supply Chain Planning. Consistent with the prior Supply Chain Insights study on technology satisfaction, the supply chain execution systems of warehouse management and transportation planning have a higher satisfaction rate among Line of Business Users than the systems of demand planning and Sales and Operations Planning (S&OP). Consultants clients have a lower satisfaction level with planning applications than supply chain execution systems. Demand planning and demand shaping technologies are both rated the lowest in current satisfaction and the most important for future year deployments. Copyright 2012 Supply Chain Insights LLC Page 4

6 Figure 2 Consultants Clients Satisfaction Rates with Current IT Systems The Gaps in Supply Chain Centers of Excellence Are Smaller for the Consultants, but the Focus Is on Technology. In the survey, 86% of Consultants surveyed are working with a client that has a supply chain center of excellence. The gaps in current and desired states are shown in Figure 3A. When these gaps are contrasted with Line of Business Leaders in Figure 3B we see that the views of the Consultants tend to be more technology-driven concerns while the views by the Line of Business Leaders are more focused on business outcomes. Note the difference in perspective on key elements like leading an effective S&OP process. The process evolution for S&OP is over thirty-years old. As the role of the supply chain shifts in driving business strategy, the goal of the S&OP process changes and the implementation of the processes become more strategic with a focus on the Endto-End supply chain. This is both an opportunity and an issue. Supply chains are more strategic and S&OP processes are more important, but the confusion on the execution of the practices is high requiring a retooling of both Consultants and Lineof-Business Leaders. Copyright 2012 Supply Chain Insights LLC Page 5

7 Figure 3(a) Consultants View of Performance vs. Importance of Supply Chain Center of Excellence Figure 3(b) Line of Business Leaders Perspective on Supply Chain Centers of Excellence Gaps: Importance and Performance Consultants Have a More Mature View of Supply Chain Excellence. There is general agreement on the definition of the supply chain organization. Both Copyright 2012 Supply Chain Insights LLC Page 6

8 groups are in violent agreement that supply chain planning, inventory management and distribution should have direct-line reporting relationships. In general, Supply Chain Consultants believe that the definitions of the supply chain organization should be wider than they are today. Figure 4 Contrast of Views of Reporting Relationships Embedded in the design of both surveys was a supply chain maturity model shown in Figure 5. The basis of this model is that while companies start and must continue their focus on vertical process reliability within source, make and deliver processes, and after delivering reliable process excellence in these vertical silos, the company can then begin to connect the end-toend supply chain (E2E) through the building of horizontal connectors. The efficient and reliable supply chain goals shown in Figure 5 are characteristic of the implementation of the SCOR reference model. The Resilient phase is consistent with the implementation of Supply Chain Risk Management principles along with Integrated Business Planning (IBP), while the Adapt Phase is characteristic of the Demand-driven Value Network. The last, and most mature phase, is defined as the Market-driven Value Network. (These concepts are defined in the Supply Chain Insights report Building Market-driven Value Networks. These concepts are additive: each phase building on the concepts of the prior.) Copyright 2012 Supply Chain Insights LLC Page 7

9 Figure 5 Supply Chain Maturity Model While many of the Line of Business Leaders focus on more traditional definitions of the efficient and reliable supply chains, the Consultants definitions are more mature. As shown in Figure 6, Supply Chain Consultants have a better understanding that the organization must first achieve this level of reliability and then shift their focus to building strong horizontal processes to improve supply chain resiliency and responsiveness. Figure 6 Contrast of the Definitions of Supply Chain Excellence Copyright 2012 Supply Chain Insights LLC Page 8

10 Conclusion The building of the supply chain of the future is dependent on an ecosystem of consulting and technology partners. While companies have implemented over 150 systems, there is only a high satisfaction rate with supply chain execution systems. The implementation of planning and the definitions of supply chain excellence are still a barrier for improved supply chain performance. While the Consultants see the advance of new technologies as the next frontier, the Line of Business Leaders are more focused on process improvement. They need to go hand-in-hand with a clear definition of a multi-year roadmap. Copyright 2012 Supply Chain Insights LLC Page 9

11 Methodology Consultants answering this survey had an average 17 years of experience in supply chain management. Copyright 2012 Supply Chain Insights LLC Page 10

12 The areas of focus vary, with an emphasis on traditional supply chain projects. There is more focus on the front of the supply chain demand management and Sales and Operations planning than the more supply-centric processes. Copyright 2012 Supply Chain Insights LLC Page 11

13 About Supply Chain Insights LLC Supply Chain Insights LLC (SCI) is a research and advisory firm focused on reinventing the analyst model. The services of the company are designed to help supply chain teams improve value-based outcomes through research-based Advisory Services, a Dedicated Supply Chain Community and Web-based Training. Formed in February 2012, the company is focused on helping technology providers and users of technologies improve value in their supply chain practices. About Lora Cecere Lora Cecere (twitter is the Founder of Supply Chain Insights LLC and the author of popular enterprise software blog Supply Chain Shaman currently read by 4500 supply chain professionals. Her book, Bricks Matter, publishes in December With over eight years as a research analyst with AMR Research, Altimeter Group, Gartner Group and now as a Founder of Supply Chain Insights, Lora understands supply chain. She has worked with over 600 companies on their supply chain strategy and speaks at over 50 conferences a year on the evolution of supply chain processes and technologies. Her research is designed for the early adopter seeking first mover advantage. Copyright 2012 Supply Chain Insights LLC Page 12