by -- August 31, 2015
It was interesting to read recently that the Los Angeles Angels had removed their General Manager, Jerry Dipoto, following a failed power struggle with the team’s manager, Mike Scioscia. By all reports, a major source of the friction was the GM’s desire for Scioscia to make better use of new analytical tools in game situations.
A long-time and successful manager for the Angels, Scioscia has been reluctant to change his old school approach -- and in this case, the team seemed to back him up. So perhaps it is not entirely surprising that my own recent conversations with retail and consumer product supply chain leaders have revealed few who would be willing to adopt an analytical approach in their workplace similar to that suggested by the now unemployed Angels GM.
I was raised in an era where supply chain disruptions (and, thus, product-to-shelf disruptions) immediately spurred frantic review sessions with anxious supply chain managers trying to figure out what went wrong, and how to prevent it from happening again. Back in those days, it was enough for supply chain leadership to merely support the company’s business and not necessarily be the differentiator in the customer experience.
Today, omnichannel has evolved from an over-hyped term to a standard operating procedure in the world of retail. Winners in the tough, crowded retail world are those that can supply the customer in a manner that gives them what they want, where they want it (online or in-store), and when they want it (24-7). Fixing supply chain disruptions after they occur simply isn’t good enough. To satisfy customer expectations, the supply chain must anticipate disruption before it happens.
As in baseball, predictive analytics are becoming the means to fuel omnichannel requirements and excellence. However, as with all new trends, the initial hype may cause some leaders to mistakenly adopt a wait and see mode.
There are three areas where supply chain programs should proactively exit “the on deck circle” and ensure they are “at bat” if they are to have any chance of gaining the competitive advantage their company needs to win market share.
1. The planning game must be upped. An S&OP (or some type of a truly integrated planning process) must be in place to more closely match demand forecasts (i.e. multi-channel markets) to an increasingly far flung and diversified supply stream. Having worked in and around S&OP processes, I find many organizations either don’t implement or fail to complete an implementation because it’s really hard. Old silo processes, the lack of a common definition of data across the organization, and poor legacy tools all contribute to a planning process that can’t get ahead of the game. Again, reacting after the fact is not enough today.
2. Sensing is not sci-fi, it is real today. The ability to utilize sensor technology and leverage devices in the internet of things is in play today. Sensors are able to track variables such as temperature during international shipping. This can be done in real time by providing advance warning on potential issues and accelerating any pre-identified course corrections.. (I was reminded of how prevalent the new technology is becoming when I learned last week that a colleague who had sold transportation services for many years was now selling GPS and sensor technology).
3. The ability to interpret and properly utilize new data sources. Too often, companies seeking to deploy “big data” strategies underappreciate the amount of work that must take place in order to transform their organization to be a more customer-centric network. The demands of today’s dynamic customers cannot be met merely by utilizing new data to inform old processes. Increasingly, organizations are finding that success lies in having the capability to effectively manage and interpret that data, and in the ability to apply the real time information that is subsequently generated to their decision making process. Having playbooks that drive real time decision making completes the transformation.
Even as I write this, I suspect some leaders are still shaking their heads and will stubbornly stick to managing the game merely on hunches and years of experience. I will tell you they have a 0-2 count and a big curveball headed their way.