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Supply Chain Analytics: The New Frontier

Presentations by industry speakers and student teams at this year’s SCRC meeting on December 2 were once again outstanding.  The topic this year, supply chain analytics, provided a wealth of new thinking that provided ample fodder for new developments in the field.  I kicked off the meeting by reviewing some of the fundamentals around performance management systems, and the fact that analytics development is really a process that begins by understanding the business plan, and the indicators that people NEED (not what they WANT) to make effective decisions.  Some of the key challenges and lessons learned are shown below:

•Make sure you build the business process before building the front-end metrics reporting

•Different systems support different business processes – so match the system to the metric (e.g. JDA for planning, SAP for financial reporting)

•Develop a global data warehouse and ensure rigor and accuracy from the outset

•Metrics need owners – who who drives them?  Who’s is accountable?

•Establish a centralized independent analytics team accountable for data collection, update schedules, cleansing, analysis, and communication

•Metrics can change a culture – spend time at sites and in the field explaining the metrics, training, illustrating applications, and establish transparency

This was followed up by a great presentation by Steve Fecho, Manager of Market Intelligence at Merck.  Steve shared the origins of the MI function, and how it has evolved to become a critical strategic weapon for leveraging supply chain relationships globally at Merck.  Central to his discussion was the fact that good MI not only serves supply chain stakeholders, but can better inform customers and key business unit stakeholders on the trends in the market and how they shape the future.

Finally, Pierre Mitchell from the Hackett Group wrapped up the day, and provided some fantastic insights into the future of analytics.  He talked about the increasing focus on analytics as a strategic priority for management, but the high degree of complexity associated with trying to boil the ocean to extract the metrics that matter.  Analytics need to focus not just on savings, but on risk, and the challenge of pulling data from multiple stacks and systems to provide a single view of performance.  He also referenced the future of analytics, around the “mash up” of cross-referencing data in supply chain to other applications, actors, external systems, and associations.  Finally, he urged people to “Be deliberate in building supply chain analytics capabilities” – start with the problem/requirement, and then work backward.  He urged people to consider the “eight habits of supply chain analytics”:

1.Having Accountability and Resources for Supply Analytics

2.Using a CoE model within Supply and across the Enterprise

3.Self-Funding.  Many aspects to this.

4.Pick the right solution approach, then the right provider, and the right collaboration

5.Having an “architecture” that is self-funded, time-phased, tied to project portfolio.  “Loosely coupled applications, but tightly integrated knowledge” 6.Starting with business problem / requirement and associated needed information – and only then working backwards to the solution alternatives

7.Using Organizational Judo to tie analytics not just to PSCM, but also to enterprise TLAs: EPM, GRC / ERM, PMO, GBS, TQM (e.g., DMAIC), KM, CO2 and be flexible to not call it Analytics if that’s a dirty word.

8.“Benchmarking” for the Art of the Possible… and for the reality of the probable

A great first day!  I’m sure there will be more tomorrow!