Demand Management Trends
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The Growing Importance of Supply Chain Analytics
Executives looking to link enterprise strategy to supply chain execution first need to understand the cause and effect of daily operational actions in the context of meeting corporate objectives
With a growing recognition of the strategic influence of the supply chain, executive teams are looking at ways to more tightly link corporate strategy to supply chain execution. This requires a clearer understanding of the cause and effect of daily operational actions in the context of meeting corporate objectives. As a result, there is increasing attention being given to establishing more robust supply chain analytics and integrated decision-making processes.
As a first step, answering the question of why more in-depth analytical capabilities are needed can, by default, answer the question of what exactly is needed in this regard.
The driving force behind needing a better view of the ins and outs of the supply chain is the pressing need for flexibility and performance amid a business environment of complexity and volatility. Corporate plans are made, and then reality takes over. Constant changes inside planning horizons are no longer an exception to the rule; they are the rule. With so many unplanned events happening across extended supply chains, caused by supply disruptions, demand volatility and shrinking product lifecycles, frontline decision makers are making literally hundreds of judgment calls each day. Each of these alone may not have significant implications to the business, but in aggregate, they are quite material. How does an organization ensure that these decisions — which need to be made quickly to satisfy customers and avoid costly delays — are consistent with its overall corporate performance goals?
The ability to deliver results in the face of daily changes inside planning horizons is being thwarted by the inefficiencies of traditional tools and technologies, which lack the integrated demand-supply planning, monitoring and collaborative response capabilities required for today's complex and dynamic world. Companies are now recognizing the need to arm their frontline staff with better information and analytical tools to make informed decisions on risk tradeoffs and response and ensure ongoing alignment of operations execution to top-level corporate objectives.
Setting the Stage
In the pursuit of continuous alignment between corporate strategy and supply chain execution, information is power and visibility into the supply chain is at the core.
Supply chains that at one time consisted of a factory and its direct suppliers now span the globe and can consist of multiple levels of supplier/customer relationships. So, for supply chain visibility to be truly insightful, it must be inclusive. A company must have the ability to easily consolidate data from these multiple sites and systems for a holistic view of the extended supply chain. For global performance management, one needs global visibility. And for decisions to be effective, partners across the organization (internal or external) need to be on the same page, working from the same set of data, in the same way. A multi-enterprise, multi-tier view of operations is required to have a complete understanding of the business and to effectively manage operations across the supply chain.
Functionally, this requires a central system that can pull up-to-date information from different operational systems and synchronize it, providing a single version of the truth that is accessible by diverse, ad hoc supply chain management action teams across the extended enterprise.
As a first step, answering the question of why more in-depth analytical capabilities are needed can, by default, answer the question of what exactly is needed in this regard.
The driving force behind needing a better view of the ins and outs of the supply chain is the pressing need for flexibility and performance amid a business environment of complexity and volatility. Corporate plans are made, and then reality takes over. Constant changes inside planning horizons are no longer an exception to the rule; they are the rule. With so many unplanned events happening across extended supply chains, caused by supply disruptions, demand volatility and shrinking product lifecycles, frontline decision makers are making literally hundreds of judgment calls each day. Each of these alone may not have significant implications to the business, but in aggregate, they are quite material. How does an organization ensure that these decisions — which need to be made quickly to satisfy customers and avoid costly delays — are consistent with its overall corporate performance goals?
The ability to deliver results in the face of daily changes inside planning horizons is being thwarted by the inefficiencies of traditional tools and technologies, which lack the integrated demand-supply planning, monitoring and collaborative response capabilities required for today's complex and dynamic world. Companies are now recognizing the need to arm their frontline staff with better information and analytical tools to make informed decisions on risk tradeoffs and response and ensure ongoing alignment of operations execution to top-level corporate objectives.
Setting the Stage
In the pursuit of continuous alignment between corporate strategy and supply chain execution, information is power and visibility into the supply chain is at the core.
Supply chains that at one time consisted of a factory and its direct suppliers now span the globe and can consist of multiple levels of supplier/customer relationships. So, for supply chain visibility to be truly insightful, it must be inclusive. A company must have the ability to easily consolidate data from these multiple sites and systems for a holistic view of the extended supply chain. For global performance management, one needs global visibility. And for decisions to be effective, partners across the organization (internal or external) need to be on the same page, working from the same set of data, in the same way. A multi-enterprise, multi-tier view of operations is required to have a complete understanding of the business and to effectively manage operations across the supply chain.
Functionally, this requires a central system that can pull up-to-date information from different operational systems and synchronize it, providing a single version of the truth that is accessible by diverse, ad hoc supply chain management action teams across the extended enterprise.
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