Common questions asked by business leaders with some examples of new and promising technologies by Lora Cecere
I help business leaders transform supply chains. Fiercely independent, I triangulate the market and share insights. While companies like research, they love stories. For me, this poses a dilemma. How so? No one wants their story told, yet they want to know stories of other companies. I sign a Non-Disclosure (NDA) everywhere I go.
Stories from Tom, Dick, and Harry
For a gal that writes for an audience of over 400,000 readers, this poses a problem. How do I share the experiences while preserving anonymity? The term “every Tom, Dick, and Harry,” means everyone and anyone. In short, he is the quintessential guy. Today, in this blog, while the tales from the road are real, I will share stories using Tom, Dick, and Harry pseudonyms.
As a part of my annual Supply Chain Academy class, I offer office hours. A recent call was with Tom. I have known Tom for five years. His first call was on Sales & Operations Planning, and his new inquiry was on S&OP. He is frustrated that he is not making progress. On the first call, he introduced me to his new boss, Jim. Tom wanted help to take his S&OP processes to a new level, but his boss was dismissive. Jim did not think that he needed help.
On the recent call, Tom shared the story of S&OP evolution through two bosses. In short, it was a zig-zag pattern based on the beliefs of his previous bosses. Progress stalled, and Tom questioned what to do. Here is a synopsis of our discussion.
My organization does not value the role of forecasting. The group doing the planning feels disenfranchised. How do I show value?
I shared that Tom’s organization is not alone. As I talked, We laughed. I asked if he had read my article, Have You Given Your Demand Planner Some Love Today? Planning organizations around the world struggle for acceptance in a supply chain world that is mainly reactive.
Most business leaders do not understand the value of planning. The struggle for Tom’s team is real. Supply chain planning organizations do not measure and communicate value propositions in business terms. What to do? I asked Tom to measure Forecast Value-Added (FVA), and inform the organization on the progress of the planning group in forecasting. I shared some examples of how others shared data in a fun way. We discussed a marketing campaign to give the demand planners some love.
The answer? Show them the money. I asked him to translate the improvement in FVA into value by calculating the safety stock required using the naive forecast and the levels using the forecast from the team. The secret is to dollarize the difference in safety stock needed to support replenishment based on FVA. When Tom and I connected later, he shared how practical the approach was to give the demand planning group an anchor to deliver business value.
Find the whole blog post here.