Catching up on several letters this week. We received several letters on one of our supply chain graphics of the week that reviewed a new supply chain process model from the analysts at Manufacturing Insights/IDC.
That includes our Feedback of the Week from Bob Hamber, who asks a number of good questions regarding the model that we suspect even IDC hasn't fully thought through.
Former Unilever supply chain executive Bob Nardone also weighs in on the model.
We also publish a few pithy responses on our First Thoughts piece on The New Supply Chain Normal. View them all below.
Feedback of the Week - on New Supply Chain Process Model:
Excellent choice for graphic of the week. I find it very helpful in integrating the many process/info management systems into a systems-of-systems cohesive whole. I like your three suggestions, especially the second.
The feedback loops are info signals like the existing black arrows are. One way to deal with the resulting busy chart would be to separate the system "blocks" and the information flow "arrows" into two drawing layers. Either using an animated GIF that would cycle the info flow layer on and off, or having a button that would show or hide the info overlay layer, would allow the viewer to study the first level in its simplicity until ready to add the second level and its complexity.
Having no experience with SCPM, I wonder if it might touch enough of the other systems that another drawing layer would help in representing it. Especially if you include the info signals/feeds from/to other systems.
The drawing mentions "data." I like the "data - info - knowledge - understanding" paradigm. Feedback is often at the information or knowledge level. Most, if not all, of the individual system blocks are processing data into info and some into knowledge. The diagram, even with a separate info layer, would be too busy to diagram and label the info and knowledge flowing between the blocks. But maybe Manufacturing Insights already has, or will, make four subdiagrams focusing on each of the four super-blocks; these could then detail the info flow between each of the two to four blocks in each super block. (If the overarching title block represents an info/mgmt system as well, then add one to the previous "two to four".)
The yellow "repositories" are interesting. I wonder what makes these worth showing. Are they more than databases? Is history maintained? Any processing happening here? Are there other "repositories" not shown,
but if shown would drive home some point I'm missing? Again, another drawing layer (or part of the info layer) could prevent over-complexity of the basic diagram. Or maybe only show them in the subdiagrams I propose above.
Three of the four superblocks have at least one system (block) integrating the two primary process/system blocks. Is they're not scheduling software that spans and integrates factory scheduling and logistics scheduling that could/should be included here? If I had more time, I'd look thru my references for some product or module that seems to fit. But I'm at a disadvantage as I'm not clear on the scope of "logistics." With only a military background (and a rather academic vice operational bent to boot), my concept of "logistics" is too broad to fit into a little box under scheduling. I sense it has to do with transportation. I would have thought by now, scheduling functionality would be common in TMS products, but apparently they still just focus on execution. (But how do you get much value of managing transportation without smart scheduling?) Where could I go to understand this diagram's connotation of logistics? It is not one of Manufacturing Insights' Domain Focuses (Foci?).
One time modeler of warzone demand and supply cycles. The TLoaDS guy.
More on New Supply Chain Process Model:
I agree with your comments for improvements to the model. I'm surprised though that the information flow from the Manufacturer to the Supplier and from the Manufacturer to the Customer is in one direction.
In a Demand Driven Supply Network, the Supplier Network should be responding to Market place information. The information flow back to the manufacturer should be related to both the supplier's ability to respond and product flow (i.e., quantity and timing). Manufacturers should be responding back to their customers with the same information. This collaboration regarding Supply and Demand and the response to demand (supply execution) are at the core of a successful Sales and Operations Planning process.
Supply Chain Guidance LLC
On The New Supply Chain Normal:
A couple of additional observations based on my discussions with mid-size manufacturing and distribution companies:
Even more emphasis on total cost, the commodity price run up, then crash, then run up again has mid-sized firms looking at the cost equation.
A review of some of the LCCS decisions. Transportation rate increases hurt a lot of these decisions, firms are re-looking at North America. Mexico, in particular, may be the winner versus Asia.
The pace of change continues to escalate and the variables are exploding. The supply chain world's new normal is rapid adaption to new norms in everything from raw materials and energy pricing, to transportation costs, to changing customer demands in an over-consumed populous. It is interesting to see this play out in other related functions. I recently saw an article in finance that said budgeting is dead and continuous planning takes its place. Clearly, continuous planning is now almost a must-have trait in the new normal supply chain arena.
Great article! We have been touting for some time that today’s economy has established a new norm: One that is defined by the expectation of fast deliveries in small, frequent, and unpredictable quantities.
Backlogs will remain small, cash flows will continue to be tight, and planning will stretch already limited resources and ERP systems. Long and complex supply chains will become an albatross that require significant change on both the strategic and tactical fronts.
To be successful, companies must plan more frequently, collaborate extensively, and must find ways to simplify, consolidate, and drive speed throughout their supply chain. To complicate things, we are also seeing that suppliers in the Far East are starting to focus their attention on supplying their own markets and are becoming less concerned about the US.
DemandCaster Lean Demand Planning and Supply Chain Optimization