By Editorial Staff
"New Normal." That's the shorthand that economists and pundits are using to suggest that the economic rules of the road have changed in the post-recession environment. The term encompasses diminished demand, constraints on capacity, supply volatility and price uncertainty, and generally higher levels of insecurity and risk. Not to mention tighter budgets, greater workloads and diminished job security.
Supply chain practitioners have been at the epicenter of the financial and economic tremors reverberating through enterprises over the past two years as companies adjust to the New Normal. Therefore, with the 2010 edition of Supply & Demand Chain Executive's Pros to Know, the magazine is recognizing a select group of supply chain executives who demonstrated leadership during the economic downturn by managing risk in the supply chain, providing competitive advantage and delivering value to the bottom line.
The 2010 "Practitioner Pros to Know" serve as role models for other supply chain practitioners looking to bring their own organizations through these turbulent times. The initiatives undertaken by these leading executives also can serve as a roadmap for strategies and practical steps that other companies can consider as they seek to navigate the new economic landscape.
This year's Pros to Know also includes executives representing software firms or service providers, consultancies, and analyst or research firms — thought-leaders who have personally helped their clients address the challenges of the recession and prepare for the recovery ahead. The learnings that the "Provider Pros to Know" have taken out of the Great Recession comprise a wealth of best practices that practitioners can apply in their own supply chains, as well as insights into how leading organizations are positioning themselves for competitive advantage in the Great Recovery.
The men and women included in the 2010 Pros to Know exemplify the talent, knowledge, skills and effort necessary for supply chain leadership. Together they are an elite group leading the industry, and their own enterprises, into the emerging landscape of the New Normal.
2010 Practitioner Pro of the Year
Scott Brown, Manager Supply Chain Analysis & Design, Plexus
When the going got tough as the Great Recession took hold, Scott Brown and his colleagues at Plexus didn't just get going, they got going faster! Plexus is the Neenah, Wis.-based provider of a wide range of services in the electronic manufacturing services (EMS) industry. Here's Scott Brown, 2010 Practitioner Pro of the Year, in his own words:
On his strategy for managing the supply chain during the recession: Our supply chain strategy is adaptable to changes in demand on a continuing basis. We do not need to reinterpret it based on transient swings. It is based on the "Laws of Supply Chain Physics," which, like the laws of physics that govern the universe, do not change. Demand was variable and unpredictable before, during and after the "recession." Lead times still are primary drivers of supply chain inventory requirements, along with service level needs. Service level needs remain high if not higher under conditions of economic duress. Optimization in this environment is, if anything, more important. Having the ability to dynamically fine tune every item in the supply chain is even more critical. That is the capability we have had and continue to improve upon.
On initiatives undertaken in the supply chain during the recession: We continued our investment in our Optimal Procurement and Deployment Modeling tools (OPDM). These tools benefit the company by ensuring that the desired service levels are met and that we balance this with our return-on-capital goals. In spite of the downturn, compared to others in our industry we saw much smaller decreases in sales, continued to lead the industry in returns on capital. We have seen how full implementation of the OPDM demand-pull-based model enables this kind of success. The integration of this approach into our sales process has been resonating very strongly with customers, helping Plexus to win future business during the downturn at a record setting pace.
On key supply chain challenges in the year ahead: Key challenges for us include acceleration of the implementation of OPDM tools and expansion of their application to more customers programs; integrating new business intelligence capabilities into OPDM and related systems; and deploying a supply chain dashboard that will provide both decision-making support and command and control capabilities in near real time. One of the most promising enhancements relates to the integration of forecast accuracy and bias measurements into the OPDM optimization logic. This logic will allow us to "separate the wheat from the chaff" when it comes to the forecasts we receive from our customers, allowing us to help them improve their forecasting process and at the same time control the liability they can and do create with biased processes. Additionally, if the upturn continues, the extension of lead times for components will place a premium on adaptability, and our OPDM systems will directly support and help ensure continued service in this environment. We have already demonstrated that parts administered under OPDM are three to five times less likely to require expediting or extraordinary effort to procure them than those not on these programs. Yet at the same time they turn on average twice as fast.
On lessons from the recession: We believed firmly that we had the tools to weather the storm, and we have proved it. Now we must redouble our efforts to fully adopt a demand-pull model driven by OPDM and the "Laws of Supply Chain Physics" on more customers programs and parts. Regardless of whether business is speeding up or slowing down, these laws — and the tools and process based on them — adapt accordingly. In a time of rapid growth and extending lead times, they help preserve service. In a time of contraction, they prevent unnecessary liability and preserve service. This is what OPDM was intended to do. We continue to work to enhance the tools based on what we have learned. Increasing their speed and capacity and increasing their degree of integration into all that we do in materials.
Scott Brown has 28-plus years of experience in Operations, Materials and Supply Chain, including at Plexus and previously at OshKosh B'Gosh. At Plexus, he is responsible for the global strategic direction of supply chain analysis, design and operational capabilities, and the tactical deployment of supply chain analysis and design tools, including the development of the research and science behind such tools as OPDM and inventory service level modeling (ISLM). He has been a frequent speaker before industry audiences, and he is a four-time past recipient of the Pros to Know award and was included in the 2009 Top 25 Supply Chain Executives by the Global Supply Chain Leaders Group (GSCLG.com).