For starters, no, my daughter did not directly impart eye-opening knowledge of supply chain management upon me. That’s impossible. She can “only” say mama, dada, ball, and a few other words, mostly relating to food. However, this new dad experience has allowed me to draw some interesting parallels to the supply chain world. This month, my daughter will turn one. It has been the craziest 12 months of my life, but also the best.
I’m sure a few supply chain managers can relate, maybe not necessarily with the “best” part, but it sure has been an intense year; just look at some of the things that are going on in this world that impact supply chain operations: An alliance was formed in the transportation industry to create knowledge-sharing opportunities in the blockchain space. Electric semis are already making their first deliveries. Trade wars are looming, or have already begun according to some. Artificial intelligence, machine learning and robots are receiving expanded roles within operations.
The role of the supply chain manager has long moved past the cliché of buying cheap to sell high while cutting costs along the way. Today, the supply chain represents one of the most valuable assets within an organization that must be effectively prioritized and managed. Just as I entered the new role of fatherhood, so too are today’s supply chain managers experiencing an evolving role within companies. They are faced with a new technology or market development seemingly on a daily basis, on top of being required to get the basics right.
Here are four things I have learned in my new role as a father that may be helpful to today’s supply chain managers:
1. Demand pattern recognition is of utmost importance
Just like my baby wasn’t telling me why she was screaming in the early months, customers aren’t telling businesses how many products they plan to buy today, or six months down the road. What I learned in the chaos and ear shattering noise of trying to appease a screaming baby is that the identification of demand patterns is of utmost importance. I started to notice some slight differences in the sounds of the scream, and when combined with specific time patterns, it started becoming easier to appease my baby.
Identifying demand patterns is a bit more difficult, if not impossible for supply chain managers when dealing with hundreds, thousands, or hundreds of thousands of different items. This is where data analytics comes into play. Ask the question: ‘What is the data analytics maturity of my company?’, then start somewhere. Use the data locked up in your ERP system to visualize past consumer purchases (descriptive analytics). Use classic prognosis algorithms or machine learning to predict future demand based on historical data (predictive analytics). Then implement digital decision making to make smart buying choices with reliable suppliers to help keep optimal stock levels on hand for each item in your warehouse (prescriptive analytics).
When you hear about algorithms, machine learning and artificial intelligence in supply chain management, this is one very important area of application that simply utilizes existing data in a more efficient and effective manner to help better predict customer demand. Nobody likes being screamed at, whether from a baby at home or customers and colleagues at work. Use the technology available today to better predict demand, otherwise screaming customers can quickly turn into ex-customers.
2. Plan for the unplannable
I used to be able to say, “I am always on time.” That changed 12 months ago. Whether it was a nap that went too long (never wake a sleeping baby…) or a diaper disaster after we were all bundled up in our snow gear and out the door, my on-time-rate has gone by the wayside. I now plan for the unplannable and build in some puffer times when getting ready for an engagement.
Planning for the unplannable boils down to having a good risk mitigation strategy in place for supply chain managers. There are entire books on this subject so it doesn’t make sense to go into much detail here. That being said, a good place to start a risk management strategy would be to map your supply chain. Who and where are your suppliers? Who and where are their suppliers? All too often we see businesses getting into trouble due to a lack of transparency in this area. Understanding where the different nodes of your network are located could also come in handy in the case of natural disasters.
3. Collaboration is key
Collaborating and communicating with my wife the past 12 months has proven to be very important. Not that we didn’t do that the past ten years, but this has grown in importance since our daughter arrived, especially since we don’t have any family in the area where we can just drop our baby off if we happen to have a conflict in our calendars.
For supply chain managers, this equates to internal collaboration, for example amongst members of the internal supply chain: procurement, manufacturing, warehouse managers and the sales team. Coordination and communication amongst these “silos” is important for successful operations.
Collaboration is key externally as well. What do the relationships with your suppliers look like? Companies can also look for ways to collaborate with customers to bring a product line forward and encourage innovation.
Collaboration can also prove beneficial with competitors. Take the previously mentioned ‘Blockchain in Transport Alliance’ as an example; Both FedEx and UPS, two main competitors in the courier delivery services space, have joined the alliance to ascertain the mutual benefits that can be gained from the implementation of blockchain technology.
4. Be open for change
I was warned by the midwife in the hospital that my baby would likely not be a fan of the diaper changing process in the early months. Sure enough, this process was accompanied with some serious crying. It’s cold and uncomfortable. I get it. As time has passed, this process seems to have gotten easier (at least the crying has stopped), and a change has become welcomed by my daughter. Soon, I will also be able to introduce the wonderful invention of the toilet into the process.
The world seems to be changing at a pace faster than ever before. Supply chain managers need to embrace this change. A little resistance in the beginning is normal, and not every new technology is suited for your operations. However, an open mind could lead to some great efficiency gains when it comes to managing your value network. It is crucial to look beyond the hype and find some best practice examples, for example in the machine learning and artificial intelligence space.
One thing is certain, as I stated in a previous post, resting on our laurels, not staying up to date with the latest industry trends and technologies, is not going to turn out well. Just look at what is happening to retailers that failed to adopt an omni-channel presence and adapt to the current and rapidly changing operating environment. The most recent example is unfortunately Toys R’ Us. It is important to be open for change and to learn the soft skills required to implement that change.
Demand planning, risk mitigation, collaboration and an openness to change have proven to be vital in my new role as a father. I think many supply chain managers would agree that these four tips can help create smooth and efficient operating processes as well. Whether from a 1-year-old, a new dad, a supply chain guru, a text book, an insightful video, or some other consultant, it is important to stay up-to-date on the latest supply chain industry trends and be open to try something new that could potentially bring significant improvements to how you manage your supply chain operations.
What was the source of your most helpful supply chain management tip?