Nari Viswanathan from Aberdeen Group on ‘The Supply Chain Executive's Strategic Agenda for 2010’

© AberdeenGroup 2009

Supply Chain Executive’s Agenda 2010:

Key Trends and Strategies

Nari Viswanathan Vice President/Principal

Analyst Aberdeen Group

© AberdeenGroup 2009 2

Customers

Suppliers

Raw Material

Component Factory

Retail Store System Factory

Enterprise

Demand Network - Buyer of

services and products For e.g: Retailers, Distributors, Value Added Resellers (VARs),

Supply Network – Suppliers,

Contract Manufacturers, ODMs, 3PLs

Enterprise – Sales, Marketing,

Operations, Manufacturing, Procurement

Logistics Network – 3PLs, Shippers, Carriers

Business Context: Integrated Demand-Supply Networks

Financial Network – Banks, Supply Chain Finance

Providers


Session Agenda

Mandate for the CSCO: Aligning Business Goals with Supply Chain Strategies

Priorities for the CSCO: Key Trends Action Plan for the CSCO: Key Takeaways


Top Business Goals of 2010

n=350 for Executive Management ; n=226 for Supply Chain Professionals Aberdeen Business Review

Mis-alignment


Top 2 Challenges in Meeting 2010 Goals


Supply chain and management agree on need for execution of strategy


Top 2 Strategic Actions Being Taken in 2010



Session Agenda

Mandate for the CSCO: Aligning Business Goals with Supply Chain Strategies

Priorities for the CSCO: Key Trends Action Plan for the CSCO: Key Takeaways


Priorities of the Chief Supply Chain Officer

Gaining Supply Chain Visibility & Responsiveness is key requirement

BI is becoming more focused on Operational Issues

Sales and Operations Planning is evolving into Integrated Business Planning

Collaboration is back: Trading Community Management

Cloud & SaaS approaches are ideally suited to enable Integrated Demand-Supply Networks


Why Should Companies Focus on Supply Chain Visibility? Customer Service Advantage

Best-in-Class versus Laggards - their percentage of complete and on time orders delivered to customers is 15 percentage points higher

A large gap in today’s customer driven environment Landed Cost Advantage

Best-in-Class versus Laggards - more successful in reducing their year-over-year landed costs per unit (an almost 13 percentage point gap with Laggards)

A big achievement in today's cost-conscious business climate









Role Based BI Approaches

High-level / KPI reporting (or "overlay") tools - most relevant to C-level executives and top-level directors.

Analytics / data-intensive analytical reports - most relevant to specialized data analysts. These applications should provide advanced analytics capabilities (including historical analysis and forward-looking estimates) for supply chain specialists, with the ability to perform root cause analysis and to drill down into specific business areas. More focused on historical data

Embedded analytics / SCI tools incorporated into other functional applications (e.g. S&OP, procurement, transportation, manufacturing shop floor etc), business analysts or mid-level supply chain / operations managers for which BI is not a primary job responsibility (operational users). More focused on real-time data

Analytics & Operational BI: Enablers of Visibility and Responsiveness


Supply Chain BI Capabilities – Key to Success in Multi-Enterprise Demand-Supply Networks

22%

47%

19%

7%

36%

51%

78%

55% 51%

28%

45%

65%

36% 37% 30%

0%

25%

50%

75%

100%

Internal supply chain performance

dashboards

External supply chain performance

scorecards

Reports Analytics (statistical

analysis, trending, route cause analysis etc)

Supply chain modeling (e.g.

what-if scenarios, network design,

etc.)

Best-in-Class Average Laggards




BI is becoming more focused on Operational Issues Sales and Operations Planning is evolving into Integrated

Business Planning Collaboration is back: Trading Community Management Transportation and warehousing needs to be Integrated

with overall supply chain Cloud & SaaS approaches are ideally suited to enable

Integrated Demand-Supply Networks


Elements of Integrated Business Planning


Traditional S&OP Integrated Business Planning (S&OP 2.0)

Volumetric supply demand balancing only.

Profitable alignment of supply, demand, product and service. Risk management an important part of the process.

Tactical process with limited linkage to overall business goals.

Strategic technology-enabled process aligned and integrated with financial and corporate goals and metrics (C-Suite).

Primarily spearheaded by Sales or Operations organizations.

Balanced process with equitable participation from key stakeholders: Sales, Operations, Product development, Finance and Service. Financial planning and budgeting process integrates with S&OP process

Limited sponsorship via LOB management. Primarily driven by top executive-level sponsorship (C-Suite).

Internal process—no customer, partner engagement

Engages players in the value chain—active strategic customer and partner engagement.

Typically monthly or bi-weekly static process focused on tactical exception management.

Dynamic, global, even event-driven based on frequently scheduled and on ad hoc basis.

Some technology enablers to support the process. Typically, spreadsheet oriented or a standalone solution.

Advanced technology enablers covering analytics, collaboration, optimization, simulation and what-if analysis. Global and local capabilities with real-time visibility to demand, supply, and product status. Integrated with ERP.









Process Steps Associated with Trading Community Management









Highest Adoption Rates for SaaS in Supply Chain Execution


Key Takeaways Chief Supply Chain Officer role is becoming a reality Lowered workforce – 63% of companies indicate that

they are not going to hire in 2010 However 38% indicate an increase in technology spend in

2010 50% of companies indicate that sustainability has been

incorporated into some of the SCM processes and 25% indicate that it has been incorporated into ALL SCM processes Improved energy management and changing

transportation strategy are top two approaches towards making supply chain more environment friendly

Now more than ever, supply chain processes needs to be customer facing
