A Buy-Side Blogger’s View (Part 1): What I Learned at the Supply Chain Insights Global Summit

By September 28, 2015Uncategorized

Lora was kind enough to invite me to attend the global summit a few weeks ago and while I meant to do some live blogging, I was too busy taking it all in and writing it all down, and now I’m staring at 12 pages of ‘knowledge inventory’. The value of flow and moving smaller lot sizes is not lost on me here. Anyway, needless to say, it was great to be back at the Phoenician with Lora (an homage of sorts to the good old AMR days), and with a broader supply chain community. Procurement and inbound SCM is great, but it’s nice to stretch yourself out every now and then.

I think the easiest way to share my takeaways and ‘greatest hits’ is to simply do a punch list of the top things I learned:

• Economist Richard Florida discussed the impact of cities and the 40 ‘mega regions’ in the world that account for 18% of the population, 66% of economic output, and 95% of economic innovation. The world is becoming heavily bifurcated between rich and poor, centralized and de-centralized, “flat” and localized, connected and isloated, and so on. Accommodating this bi-polar world presents challenges to supply chain leaders who want “mass customization” in this environment. Dr. Florida called mega cities “giant waste machines” that present extremely complex physical supply chain challenges (of moving people as much as moving product), but they present opportunities not just with regards to demand centers, but to supply centers of knowledge and innovation. Just as industrial complexes attracted physical workers during the industrial revolution, mega regions are leading the way with the current knowledge revolution. Innovation demands proximity, so if you want best talent and creativity, you’ll likely be sourcing it from a mega city. Check out Dr. Florida’s site to see some of his interesting maps that illustrate some of these points.

• I learned some ways from Maeve Magner that “Trade vs. Aid” via using supply chains as a force for good is helping Africa. I also learned that 173M people in the 54 countires in Africa is projected to top 1B people in 2100. I also was struck by the level of presence of M-PESA in terms of cellular based payments and microfinancing – and by the increasing presence of China in building infrastructure in Africa to secure supply lines earlier than anyone else. Say what you will about China, but it definitely takes a long-term view on things.

• Kehat Shahar from SanDisk showed what a supply chain transformation really looks like. It enables the doubling of revenues, with half the inventory, and improved service levels. It is enabled by the synergy between: demand segmentation, lead time reduction (and impact on push-pull and postponement), rapid re-planning (and dynamic network changes), and policy redesign to maximize shareholder value (measured by $ per GB of produced product in light of optimize inventory/service-level balancing by demand segment).

• One of SanDisk’s learnings was to “ignore the forecast” and rather accept the forecast as wrong and work on the supply side to improve how to accommodate demand variability through faster/better supply fulfillment. I got a good chuckle from Carol Ptak’s lambasting of the top most metric of forecast accuracy sitting atop the old AMR Pyramid of Supply Chain Metrics (now a Gartner pyramid which has quietly changed the metric to a non-metric called demand forecast). I also enjoyed Carol and Lora debating, but the content did give me a bit of a flashback to the early 90’s when we were debating how to make MRP II work in concert with ‘JIT’ (i.e., use MRP for planning, but JIT for execution). Yes, things are much different today, but some of the first principles don’t change.

• Speaking of Gartner, I noticed the ‘top 25’ rankings that came out and could see Lora’s influence at our alma mater (e.g., genericizing of orbit charts; use of ‘outside in’, etc.). Or maybe it’s coincidence. Regardless, I’m a big fan of benchmarking and numbers (if used properly and openly rather than just being a marketing tool), and applaud Lora’s efforts in the ‘supply chains to admire’. Yes, you can only go so far with public financials in a massively multi-variate world, but it’s far better than no data or just proprietary data.

OK, I need to cut this off, even though I’m only just getting started. I’ll follow up with more learnings on robotics, P&G’s transformation, supply chains in 2025, lighting up the ‘dark supply chain’, use of consumer ‘big data’ at Lenovo beyond CRM; circular supply chains, supply management at Intel, talent management, gamification, and more.

Phew! God, I really love supply chain management. Now if I could just get my two teenage boys interested. All suggestions are greatly welcomed.

About Pierre Mitchell

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