This Week in SCDigest:
Time to Integrate Supply Chain Planning and Execution
Supply Chain Graphic of the Week, plus more Supply Chain News Bites
SCDigest On Target e-Magazine
Expert Insight - Supply Chain InView by Ann Drake
Expert Insight - Managing SCM Performance by Kate Vitasek
SCDigest Introduces "Distribution Digest"
Your Supply Chain Questions Answered! This Week's Question - What are the Pros and Cons of Using Vending Machines for MRO Items?
Trivia, Supply Chain Stock Index
Can't View this E-mail?  
Become a sponsor
March 5, 2009 - Supply Chain Digest Newsletter



Time to Integrate Supply Chain Planning and Execution

How well integrated are your supply chain planning and execution processes?

Depends on who you ask, of course, but among those companies our research arm CSCO (Chief Supply Chain Officer) Insights queried, most have a long way to go.

For a good while now, CSCO Insights has been working on a major report on integrated supply chain planning and execution. It is at long last complete, and I think it is a very fine piece of work. There are several very experienced supply chain executives on the CSCO Insights team, but this research and report effort was led by myself and Bob Nardone, a former supply chain executive at Unilever, who provided outstanding insight and guidance on this topic. The full report can be downloaded at Next Generation Supply Chain Management: Integrating Planning and Execution.

Gilmore Says:  

For many years, analysts and others have offered separate models of “supply chain planning” and “supply chain execution” processes."

What do you say?

Send us your Feedback here


More than 300 respondents took the CSCO Insights survey that form the basis of the report, and the results were very interesting. We can only offer a snapshot of those results here, but a few highlights include:

  • Only 11% of respondents said that their supply chain planning and execution processes act like a single integrated process today. The vast majority (57%) said they had somewhat integrated planning and execution processes, while 30% said planning and execution were mostly disconnected.
  • An astounding (from a statistical perspective) 92% of respondents said it was important to better integrate supply chain planning and execution in the next 2-3 years.
  • Information flow is key: the top two choices cited as “barriers’” to better integration of supply chain planning and execution were obtaining the lack of a unified view of true demand and the company’s current level of supply chain visibility.

There is no question that we are making progress in this area. In fact, this has been the goal from very early on in supply chain thinking. It was in the early 1990s, I believe, that the vision of a sweater being sold in Peoria triggering a sheep being shorn somewhere in New Zealand first was proffered.

It’s funny, in a sense. For many years, analysts and others have offered separate models of “supply chain planning” and “supply chain execution” processes, and the technology vendors were generally organized in that sense as well. You can find many diagrams that show hierarchical planning processes with no connection at all to execution, for example.

The report argues, and the research supports, that this gap must be closed from a process perspective to meet the challenges of today’s supply chains.

Sales and Operations Planning (S&OP) excellence is clearly an important step in this journey, but CSCO Insights believes, contrary to what some may think, that S&OP alone won’t lead to fully integrated planning and execution.

Nick LaHowchic, former executive vice president of The Limited Brands and co-author of the recent book “Start Pulling Your Chain,” agrees, telling CSCO Insights that: “Excellence in S&OP is important – but it isn’t enough” to optimally integrate planning and execution.

Why not? Many reasons: inability of the S&OP process to fully consider supply chain constraints; “noise” that often distorts the  S&OP plan as it is promulgates down the supply chain; the challenge of well integrated trading partner input and especially coordinating trading partners around the plan, latency in feedback loops, etc.

The world is changing, becoming more Lean and real-time. On the continuum between long-term strategic planning on one end and execution on the other, the report suggests many distinct process areas today will increasingly blur. Tactical planning and execution are already becoming more one single process, with technologies such as “demand sensing” leading to much more dynamic forecasts and production schedules.

There will still be lots of planning, but companies will plan “only as far in advance as they need to” – and, for many, that will be less further ahead than they do today.

It’s hard to do justice to the full scope of the report in the space I have here, but CSCO Insights sees companies progressing along a path something like this:

Baseline State: Mediocre sales and operations planning processes; planning and execution processes that are disconnected and operate largely in silos.

Phase I - The Basics: Improved S&OP, a single view of demand, and enhanced feedback loops to planning from execution

Phase II – The Real-Time Supply Chain: Sensory networks, real-time visibility, intelligent alerts, and decision-support dashboards

Phase III - Sense & Respond Networks: Next generation supply chain technologies, changes to hierarchical planning models, multi-level visibility, and new supply chain organizational structures

Many companies are already making great strides in different areas:

  • Canadian Tire does an incredible job of driving its entire supply chain, including suppliers and logistics providers, off a rolling, 52-week consensus forecast, flexibly presented in the units of measure (dollars, cartons, containers, etc.) that are most meaningful to each stakeholder.
  • The home products division of Black & Decker is a great example of a company that has fully embraced use of retail POS data in demand planning and replenishment processes, significantly improving the integration of planning and execution and led to substantial improvements in forecast accuracy, gross margins, store service levels and other bottom line benefits.
  • Chevron has implemented rich, visual, real-time dashboards in its factories to help plant managers and others make much better decisions throughout the day.
  • The Limited Brands crunches the past week’s sales data over the weekend, followed by a cross-functional meeting on Monday morning where store plans are refined and communicated to local managers, with merchandising, pricing, and promotional plans being quickly executed at each store.

One survey respondent notes that “You have hit on a very good topic here. Better integration of planning/execution will be the next big trend.”

I also like this quote from the report: “It is ironic that, in many cases, the programs and innovations put in place to generate growth cause such a high level of demand volatility and demand unpredictability that the resulting execution failures create a loss of both top and bottom line growth.”

Sound familiar?

Obviously, there is a lot more we can talk about, and will do so over time, but think you will enjoy this fine report from CSCO Insights: Next Generation Supply Chain Management: Integrating Planning and Execution.

Let us know your thoughts.

Web Page/Printable Version of Column

***Upcoming Videocast ***

Innovation in Supply Chain
Execution Videocast Series

Part 1: Is it the Right Time for Integrated Supply Chains?

***Transportunities 2009***
On-Line Expo & Conference

Key Note Speakers:

  Dr. Chris Caplice, MIT
  Dan Gilmore, SCDigest

April 7th & 8th, 2009
10:00 a.m. - 4:00 p.m. CST
(Both Days)

Warehouse Control System:
Orchestrating Warehouse Efficiency

Implementing a WCS can be a
cost effective alternative to adding more equipment or upgrading/
replacing a WMS.

Learn How.

This Week's Supply Chain News Bites Only from SCDigest

Supply Chain Graphic of the Week: Top Supply Chain Executive Priorities

This Week's Supply Chain by the Numbers - Ocean Carrier Market, Nano Car, Degrees in Demand, Driver Shortage?


It’s been said that it doesn’t hurt to be an optimist because you can always cry later.  Well, now may be the time to start crying.

In the software group, JDA fell 6.5% for the week, while Logility was up 6.5% (but is still down 55.1% for the year).  In the hardware group, Intermec was down only a mere 0.8% for the week, but is off 54.2% for the year.  In the transportation and logistics group, Yellow Roadway fell another 20.3% for the week (down 84% for the year). 

See full stock report.

Each Week:

-Global Supply Chain
-Distribution/Material Handling
-Trends and Issues

Weekly On-Target Newsletter
March 3, 2009 Edition


Supply Chain InView
by Ann Drake

You and Your Bright Ideas

Achieving Performance Excellence Methodology Can Help Generate Supply Chain Insight

Managing SCM Performance
by Kate Vitasek

Inventory Metrics,
Part 2

Cycle Counting: You Can Count on It

THIS WEEK ON Distribution Digest


HolsteHolste's Blog: Optimizing the Number of Sortation System Diverts and Pallet Positions

>> Top Story: Will Cost Pressures Drive more Companies to Outsource Logistics Functions?
>> Gilmore: Materials Handling Vendors Work, and Spend, more than you Know to Put on a Show
>> Vendor News: Ten Money Saving Ideas to Better Manage Your Fork Trucks

In the mid to late 1990s, there were six major North American wireless/Radio Frequency providers for manufacturing and logistics. The names of three still survive to this day. Who were those six RF companies?

A. Click to find the answer below


Have supply chain or logistics-related questions you need answered?
Ask our panel of experts. Share your insight!

Featured Question and Answer:

What are the Pros and Cons of Using Vending Machines for MRO Items?

Do you use an RSS reader? Do you have a MyYahoo! or personalized Google page? For these and more you can have SCDigest delivered right to your personal pages, all week long.
You can subscribe to our RSS feeds in two ways:
  1. Copy our RSS link into your RSS reader - it's easy!
  2. Click on a button below to quickly add it to your favorite readers.

Catching up again as usual. We have really been flooded of late with Feedback. As you may know, most Feedback is now posted at the bottom of each article or column on our site. On the SCDigest home page, we also have a link to the recent stories generating the most Feedback.

Our Feedback of the Week is from Aaron McHale, who liked our piece on Interesting Inventory Times. Our friend Dr. Ed Marien also briefly commented, noting his approach to measuring inventory.

We also generated some Feedback from Materials Handling Editor Cliff Holste’s piece on In Tough Economic Times Does it Make Sense to Hire a Material Handling Consultant?, which you will find below.

Feedback of the Week – On Interesting Inventory Times:

You hit the nail on the head again here.

These are indeed interesting times, and the sea change in how to manage the trade-offs between inventory, service and logistics that has happened in the last six months is simply unprecedented. What “fun” times for supply chain managers.

It is hard for all of us I think to keep up.

It is equally interesting how little real inventory progress has been made across most industry segments. They seem to bob around in a narrow range every year.

So have we simply hit a wall that is not going to be broken? Or do we need to rethink the whole paradigm in some way to get to a new curve?

It is strange, really, that there isn’t more talk about this. If we look at these same numbers for 2015, will they still be pretty much the same?

My guess is Yes.

Aaron McHale
Director of Supply Chain
Arrow Corp.

More On Interesting Inventory Times:

Good observations on Inventories.  I like to use the Cash-Cash Cycle in measuring Days and Dollars committed to Inventories and in how a firm is managing its cash flow with suppliers and customers. 

Dr. Ed Marien
Marien & Associates, LLC

DIO seems to be a good term to use for an average.

Another term that I have seen is coverage. The coverage denotes the number of period demands that can be completely serviced from a given stock on hand.

KOH Niak Wu, Dr.
Singapore Institute of Manufacturing Technology

On Hiring Consultants:

My complementary thoughts on this article are as below

1. Before hiring a consultant, the organization must identify the area where improvement is expected, i.e., goal and scope. Setting of the direction of consultant is important, e.g., if the problem is identified as improving productivity during lean time, the focus for solution is limited to down turn of the business.

2. Many a times, a consultant just facilitates discussion and structured thinking among different stake holders to bring out a solution. No harm in it and don’t undervalue it. One should focus on solution and learning.

3. All of us calls for experienced and qualified consultants and make assessment based on our understanding of business and solutions.

This has two pitfalls:

Not necessarily all problems need such a qualified and experienced consultant. Visiting a renowned and very senior surgeon for a small wound may take a line of treatment like brain surgery and cost you hell. Hence, apply the due trade-off between the complexity of the problem and benefit expected vis-à-vis the consultant’s profile.

Unless our assessment is on a different plain, we happen to bring in a consultant having matching thoughts and experience. We must remember that we couldn’t find a solution or need a better solution, thus a consultant must bring in new thoughts, techniques and direction.

Ranjan Prasad Singh
Enterprise System Solutions (P) Ltd.

As a 'single shingle' shop, I appreciate the division that makes about the size of the project and the size of the consulting firm.

But I have seen examples in my career where a single consultant was able to manage a very large project because of the network of professionals that he could bring to the project.

In some case, the 'team' members were other 'solo' artists that had the skill and talent to collaborate into the team. So, even if the client has a huge project, don't discount the solo artist that may have the right Rolodex to turn to.

The part about candor is vital. I have seen some other postings about successful consultation engagements that had at the top of the list 'Check your EGO at the door.'

I remember a few engagements when I was a client where I did not check my ego and the project suffered for it. I also remember engagements where ego was not in play, and things went far.

The candor has to be bidirectional. The client has to give the consultant feedback too. This is so important that I make it a point to specifically speak to the potential client about the need for candor AND I expect the client to give me feedback on how he sees the engagement going.

I even take it one step further and have a one paragraph section in my proposal/agreement that spells out how candid bidirectional feedback is expected and encouraged. If that talk makes the prospective client uncomfortable, I will walk away from the deal because it will be filled with problems.

I have the experience of having been on both sides of the desk in my career as a client and as a consultant, so I work hard to not do what was done to me by 'bad' consultants. When I was on the client side, I always checked out the consultant. I now encourage each potential client to speak to any of my current or past clients, to talk to equipment suppliers, contractors, carriers, or peers.

Spend time talking to the past clients. What do they say about the consultant? Are they using that consultant again? Would they use that consultant again? Even if they would use that consultant again, what did the consultant do that the client did not like. You will learn so much about the technical, and the personal skills of the consultant.

David K. Schneider
David K Schneider & Company, LLC


Q. In the mid to late 1990s, there were six major North American wireless/Radio Frequency providers for manufacturing and logistics. The names of three still survive to this day. Who were those six RF companies?

A. LXE, Intermec, Teklogix (now Psion Teklogix), Symbol Technologies (now Motorola), Texlon (acquired by Symbol), and Norand (acquired by Intermec).

Copyrights © SupplyChainDigestTM 2003-2009. All Rights Reserved.
To Unsubscribe: Click Here
PO Box 714
Springboro, Ohio 45066