Why is it So Hard to Realize the Business Benefits of Supply Chain Planning?
A Three-Part Series on the Characteristics, Pitfalls and Lessons Learned from Project Implementation
By Tom Chason, Principal SCMO2
This is the final installment of this three-part post on why getting business benefits from a supply chain investment is so difficult. If you missed either of the first two parts, I encourage you to reference them. In the first part, we reviewed the characteristics that define why these projects are so difficult to positively generate a return. In the second part, we discussed the common pitfalls and problems that companies often face when implementing a supply chain project.
Now for the valuable part—defining the lessons learned and steps we can take to avoid these common pitfalls and more easily generate business benefits from our supply chain.
Assigning Proper Human Resources
Launching and managing a project of this scope without the proper people on the team is likely to fall short of expectation in the best case scenario. Let’s not imagine the worst case. Before embarking on any significant supply chain project, assemble a team of resources with the appropriate experience and proven specialized skill set to ensure success. I certainly acknowledge that this is easier said than done; people with these skills are scarce. But it is also important to emphasize that moving forward without a capable team is sealing your fate from the start. Leverage your internal HR team, or partner with a third-party provider, but know when to hit the pause button if you do not yet have the right people on board to manage and implement your project.
Simplify. Simplify. Simplify.
A great supply chain solution does not have to be inherently complicated. Invest some extra time during the design phase to make sure your project is practical, and focus on right-sizing the requirements. Apply the 80/20 rule to prioritize which functionality to model and avoid the temptation of over-engineering the solution. Chasing a few final obscure features or stats may not be worth it if the entire project’s usability is at stake. Consider your users, understand what you are really trying to achieve and revise as often as possible to find a path that may be shorter or simpler. You will be rewarded both during implementation and in operation with a well-functioning process.
Don’t Forget the Data
The collection, processing and storage of data is a central priority in any effective supply chain project. Be certain to address master data management as a standalone process during your design phase. Know from where your data is coming, and how it will be used before any implementation efforts begin. Without mapping out this process and highlighting each data acquisition step along the way, it is impossible to understand up front where potential shortcomings may lie. Including a data plan in your supply chain plan will ensure that you are not held up downstream once your project goes live.
Test and Simulate Your Process
You don’t want to just think you know how your solution will perform. There is far too much at stake and this is far too significant an investment of time and money to be wrong. Run tests on a full data set with realistic master and transactional data so you can simulate results that are practical and telling. During these tests, if you spot any anomalies, you can make adjustments as necessary before the luxury of time for making revisions is gone. It is far more complicated to implement changes in real time than it is during a testing phase, not to mention any retraining that might be necessary as a result. Eliminate any surprises with a proper test process and know for certain your solution works before it goes live.
The takeaway: So if this is all so challenging, why do we even bother at all? Because when we take the time and get it right, the business benefits can be massive. We gain the tools we need to increase planner productivity through automation. We engage our supply chain partners collaboratively. We reduce costs. We become more competitive and differentiated in the marketplace. And we continue to unlock endless value opportunities in the years ahead.
The future of supply chain planning is bright, but only if we learn and evolve our tactics.