Post Covid-19 Recovery: Building Better Supply Chains

COVID-19 Recovery:
Building Better Supply
Chains

Supply Chain Insights LLC Copyright © 2020, p. 2
I Am A Social Scientist

I Write for the Supply Chain Leader

About Lora Cecere
Founder of Supply Chain Insights
“LinkedIn Influencer”
Guest blogger for Forbes
Author: Bricks Matter (2012), Supply Chain Metrics That Matter (2014), and Shaman’s Journal
(2014-19)
Partner at Altimeter Group (leader in open research)
8 years Leading Analyst Teams at Gartner and AMR Research
8 years Experience in Marketing and Selling Supply Chain Software at
Descartes Systems Group and Manugistics (now JDA/Blue Yonder)
15 Years Leading teams in Manufacturing and Distribution for Clorox,
Kraft/General Foods, Nestle/Dreyers Grand Ice Cream and Procter &
Gamble.
Contact Information:
• Email: lora.cecere@supplychaininsights.com
• Blog: www.supplychainshaman.com (18,000 pageviews/month)
• Forbes: www.forbes.com/sites/loracecere
• Twitter: twitter.com/lcecere (9,600 followers)
• LinkedIn: www.linkedin.com/in/loracecere (318,000 followers)
• LinkedIn Influencer: www.linkedin.com/today/author/446631
Who Is Lora?

There Will Not Be A New Normal
The Hammer
and the Dance

Demand Shifts
A combination of economic downturn and a pandemic.
Historic order patterns provide little valuable insight for
demand manager.

• Shifts in Demand
• Higher Costs
• Manufacturing
Outages
• Supply Disruption
• Logistics Outages
Expect

Navigating The Shades Of Gray
The world becomes more
gray through the pandemic.
Data requires analytics to
provide context.

• Focus Outside-in. Base Demand on Consumption with Minimal
Latency.
• Get Good at S&OP Execution. Continually Realign Demand and
Supply. (Bi-Directional Orchestration)
• Expect Supply Disruption. Transportation Will be a Constraint and
Supplier Supply Issues a Constant. Build Supplier Development
Programs and Focus on Being a Good Trading Partner.
• Base Planning on Actuals. Lead times and Cycles Will Vary. Build a
Planning Master Data Base.
• Align Teams Against Shared Metrics. Traditional approaches
focused on functional metrics are a barrier to alignment.
How To Survive?

We Must Learn To Unlearn And Build Better

Sensing: 2007 Recession

Today’s Supply Chain

Inventory Levels Higher At The Start Of the Pandemic Than
the Great Recession of 2017

Reflection
Demand Driven Value Networks
Efficient Enterprise

What Is An Effective Supply Chain?
Outcome:
Performance
Improvement
Resilience
Goal:
Efficient
Responsive
Agile
Fit for Function

Technology In Transition
Traditional supply chain thinking is:
Functional
Linear
Transactional
Inside-out
Moving forward, the thinking
becomes:
Cross-functional
Non-linear
Focus on sense, learn and act
Outside-in

What Needs to Change?
Rebuilding
• The goal is not integration. The focus needs to shift to synchronization and
interoperability.
• There is a need for sensing and reduction of cycles. Build outside-in processes to
drive better outcomes.
• Rise of new forms of analytics like the digital twin and advanced what-if modeling.

Changing Mental Models:
Risk Management

A Pandemic Was Not Believed To Be Likely for 2020
World Economic Forum Global Risk Perception Survey,
response by 640 business leaders to the question, “On a
global level, do you think that in 2020 the risks presented
by the following issues will increase or decrease when
compared to 2019?”

Risk Map 2020: Global Economic Forum
Likelihood
Pandemic

Risk Drivers: Supply Chain Leaders 2019
Global Risk:
Demand volatility
and an increase in
global complexity
greatest perceived
risks.
Assumption that
border friction and
logistics are not a
constraint.

2016 View of Risk
Global Risk:
Demand volatility
and an increase in
global complexity
growing risks.
Supplier viability
an increasing risk

Prior Risk Driver Impact

How Do We Build Better
Supply Chain Capabilities?

Visibility: The Supply Chain Is Full of Black Holes

0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Customer-centric:
putting the customer
first
Connected and
integrated processes:
flows of processes
from customer service
to procurement
Process Thinking: a
focus on systemic and
process-based thinking
Business performance
management:
Measurements are
clear and measurable.
Strategic and systemic
approach: all
employees are working
towards a common
goal
Total employee
involvement:
encouraging the voice
of the customer
Ability to get to data:
data-driven
discussions
Continual
improvement: tracking
progress and driving
root cause analysis
AXISTITLE
Current State of Organizational Capabilities to Improve Visibility
Performance Importance
Organizational Capabilities
Source: Supply Chain Insights LLC, Transportation Visibility Study (April 2020)
Base: N=31 Manufacturers
In your opinion how important are these factors on supply chain performance?
In your opinion, what is the performance of your organization on these factors?
Sharing ratings on a 5 point scale
1.97
1.77
1.55

Visibility Effectiveness
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Transportation
visibility of inbound
shipments
Visibility of the status
of shipments within
the organization
Predicting Arrival
Dates
Managing Costs Protecting the quality
of the product in
shipment
First-pass tender
(Acceptance of routes
on first pass for load
tender)
AxisTitle
Visibility Gaps
Performance Importance
Source: Supply Chain Insights LLC, Transportation Visibility Study (April 2020)
Base: N=31 Manufacturers
In your opinion how important are these factors on supply chain performance?
In your opinion, what is the performance of your organization on these factors?
Sharing ratings on a 5 point scale
1.2 1.0

Data
Inputs
Engines Plan
Outputs
Rethinking Planning: Align Engines with Outcomes
Planning Master Data

Data
Inputs
Engines Plan
Outputs
Rethinking Planning: Align Engines with Outcomes
Planning Master Data
Start:
• Redeploy Demand Planning. Use
Consumption Data.
• Build a Planning Master Data
Repository. Apply Machine
Learning to Improving Sensing.
• Focus Equally on S&OP Planning
and Execution.
Stop:
• Collaborative Sales Forecasting.
• Deployment of Traditional
APS/ERP.
• Discontinue Transportation RFPs.

What To Do Until There Is A Vaccination?
Focus: Form an operational team and a
recovery team. Focus the operational team
on managing day-to-day and the recovery
team on re-imagining capabilities.
Aid: Build strong supplier development
teams.
Reimagine: Deploy agility tactics and
reduce data latency. Invest in new forms of
analytics to sensemarket shifts and
eradicate supply chain black holes.
Design. Focus locally and improving the
supply chain response.

Wrap-up
We must learn to unlearn to
relearn.
What got us here is not the
answer in the Pandemic.
Innovation makes much of
what we have today legacy.
We have the opportunity to
build better.

ENGAGE WITH US!
Visit Us Online
www.supplychaininsights.com
www.supplychainshaman.com
www.linkedin.com/company/supply-chain-insights
www.slideshare.com/loracecere
Follow Us on Twitter
@scinsightsllc
@lcecere
Attend a Live Event
www.supplychaininsightsglobalsummit.com
www.supplychaininsights.com/the-shamans-circle

Post Covid-19 Recovery: Building Better Supply Chains

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