EDUCAÇÃO E TECNOLOGIA

Supply Chain Planning: What Would Don Draper Do?

In my blog post “Supply Chain Planning: What would Don Draper do?”, which was also published on Forbes, I will talk about how Supply Chain has changed and improved over the years.

While watched the hit TV series “Mad Men”, set in the 1960’s about a fictional advertising agency I was amazed at how much the advertising industry, and business in general, has changed. And thanks to the container ship crisis, I wondered what supply chain planning have been like in that time period? Before the days of S&OP processes, and when MRP was in its infancy, what would the Don Draper equivalent of a supply chain planner do?

I imagine a wall with a giant scheduling board with blocks that can be moved around to represent the manufacturing and delivery schedules. The constant ring of telephones, paper copies of customer orders, delivery schedules and purchase orders everywhere.

All, of course, in a thick fog of cigarette smoke.

Welcome to the 21st century

To the uninitiated, a supply chain planner back in the 80’s (let alone the 60’s) stood in front of huge walls and moved colorful magnetic cards back and forth with concerned looks. The cards represented different products on a production line. And no sooner had the little cards been locked in place, they often needed to be moved again after an urgent phone call from a customer, or supplier.

But this muddled mess belongs in the past now. With the advent of the computer, many work processes have been simplified, accelerated, and improved. Every piece of information needed for work is on the computer or in the cloud and available 24/7.

From cluttered desks to digitization

Do you still remember a typical desk with multiple phones and notes taped on top of other notes, and paper heaped in piles everywhere?

Some work desks might still look like this but by having new technologies like e-mails, instant messaging, or digital workplaces like “Teams” in place, sharing and receiving information in real-time is now a given.

The speed of communication even to the other side of the world helps companies to work more efficiently and productively. The possibility to have all the information at your fingertips on a tablet or mobile phone makes it even easier to improve the working processes like ordering new goods, checking on a shipment, or confirming a delivery status.

From chaos to transparency and control

Imagine the 60’s planners frustration when he learned that Don Draper in marketing had launched a new ad campaign that impacts the business—without informing other departments. Will the company meet increased demand or have enough materials? Can they change the production plan? It could create chaos.

So how can we avoid those siloed decisions and create more transparency and control?

The solution today is to create a  Sales and Operations Planning process which not only helps to inform and collaborate with the departments within the organization but also across the business network of partners. By having all digital information flows into one system, you can enable transparency, comprehensive control, and prompt reactions.

Agility is everything

A 60’s Supply Chain planner, would not have the tools to determine how a few big sales would affect the current plan. They would not have the flexibility to respond quickly to market dynamics, as they would have been working based on a sales forecast that relied on numbers from the past.

In today’s world, agility is everything. Being able to respond to demand and market conditions makes the difference between success and failure. Flexible and agile solutions that adapt to different situations are critical. Being able to re-plan based on changing market dynamics is key.

Changes in demand or the rise of a new competitor often means we have to deviate from the original business plan. This in turn results in fluctuations in stocks, in the utilization of capacities or personnel resources. And the earlier this is recognized and analyzed, the better it can be responded to. Having real-time data will help to adjust not only marketing and communication efforts but also adjustments of demand and supply immediately.

A look into the future

Today, Industry 4.0, demand sensing, sentiment analysis and other technology enabled data enables us to have real time information about what customers are thinking, what they are buying, and how the products they buy, are performing.

Instead of relying on information from the past, real-time data is now available for across the supply chain. And with it, the corporate management becomes “real-time”. In addition, and thanks to technologies such as machine learning and predictive analytics the decision-making horizon can soon be expanded to include well-founded statistical projections of likely upcoming events. The advantages are unimagined transparency, agility in action, data-driven optimization of efficiency

In short: a look into the future.

With Integrated Business Planning solutions and processes, our Don Draper of Supply Chain would have a healthier life without the need for lots of cigarette breaks, fewer wrinkles on his forehead, and less madness.

To learn more about how Integrated Business Planning solutions can help to be more resilient in disruptive times, follow me on https://people.sap.com/sinto#overview.