Supply Chain Network Design: “Plans Are Nothing; Planning is Everything.” - Dwight D. Eisenhower
By Steve Ellet, Principal, Supply Chain Strategy Practice, Chainalytics LLC.
Last weekend I attended my 20-year high school reunion. I hadn’t been to any previously, so it was a bit of a shock and prompted me to reflect back on the past 2 decades. I realized that I’ve been doing supply chain network strategy work for 16 years now and I started thinking about how this work has evolved over time.
When I started supply chain network modeling, the field was dominated by a few small tools that could generously be called “beta” and the then-Big 6 management consulting firms. The projects were executed on a one-off basis and involved considerable efforts to build a team, collect historical data, run a model with shaky software, and develop a business case that would get management approval.
The process was long and the effort was great. Subsequently, it was done at most annually, but usually every few years. But it did work -- savings were often identified in the multi-millions of dollars. However, since the time between asking the strategic questions to implementing the findings was often a year or more, it worked best in relatively static environments where the key inputs didn’t change quickly. Remember those days?
Faintly.
More recently, the tools have grown more stable and easier to use. As inputs like fuel costs and customer requirements change rapidly, we needed a more nimble approach – one that recognizes Newton’s First Law of Motion:
“An object in motion tends to stay in motion; an object at rest tends to remain at rest.”
Or, in other words, don’t stop (unless you want to spend a lot more energy to get going again).
Chainalytics has been advocating Continuous Analysis for several years now as a better, more agile approach to supply chain network planning. As you can imagine, our clients are more eager to adopt this approach given the dynamic environment of the past couple of years.
With this approach, data feeds are continuous both into and out of the supply chain modeling environment. With the models always up to date, the flows can be constantly tweaked while leaving the overall strategy and network intact. Some industries, particularly retail, refer to these periodic adjustments as “Flow Path” analysis which my colleague Tim Brown will be discussing in an upcoming blog in the next few weeks.
It’s not just optimizing the flow. More strategic questions like facility expansion, M&A opportunities, or changes in demand can also be supported more quickly since the data and models are kept up-to-date.
We’ve found that doing this type of work as a part of a continuous process produces better results more quickly and the results are more likely implemented because:
• data sources and assumptions are up-to-date, validated, and trusted;
• the team is assembled and familiar with the business, data, and decision process; and
• the models are already constructed and can be easily modified to accommodate more strategic scenarios.
As General Eisenhower said when planning Operation Overlord -- the D-Day invasion of France – “Plans are Nothing. Planning is Everything.” Reflecting back, this is truer today than ever.
Last weekend I attended my 20-year high school reunion. I hadn’t been to any previously, so it was a bit of a shock and prompted me to reflect back on the past 2 decades. I realized that I’ve been doing supply chain network strategy work for 16 years now and I started thinking about how this work has evolved over time.
When I started supply chain network modeling, the field was dominated by a few small tools that could generously be called “beta” and the then-Big 6 management consulting firms. The projects were executed on a one-off basis and involved considerable efforts to build a team, collect historical data, run a model with shaky software, and develop a business case that would get management approval.
The process was long and the effort was great. Subsequently, it was done at most annually, but usually every few years. But it did work -- savings were often identified in the multi-millions of dollars. However, since the time between asking the strategic questions to implementing the findings was often a year or more, it worked best in relatively static environments where the key inputs didn’t change quickly. Remember those days?Faintly.
More recently, the tools have grown more stable and easier to use. As inputs like fuel costs and customer requirements change rapidly, we needed a more nimble approach – one that recognizes Newton’s First Law of Motion:
“An object in motion tends to stay in motion; an object at rest tends to remain at rest.”
Or, in other words, don’t stop (unless you want to spend a lot more energy to get going again).
Chainalytics has been advocating Continuous Analysis for several years now as a better, more agile approach to supply chain network planning. As you can imagine, our clients are more eager to adopt this approach given the dynamic environment of the past couple of years.With this approach, data feeds are continuous both into and out of the supply chain modeling environment. With the models always up to date, the flows can be constantly tweaked while leaving the overall strategy and network intact. Some industries, particularly retail, refer to these periodic adjustments as “Flow Path” analysis which my colleague Tim Brown will be discussing in an upcoming blog in the next few weeks.
It’s not just optimizing the flow. More strategic questions like facility expansion, M&A opportunities, or changes in demand can also be supported more quickly since the data and models are kept up-to-date.
We’ve found that doing this type of work as a part of a continuous process produces better results more quickly and the results are more likely implemented because:
• data sources and assumptions are up-to-date, validated, and trusted;
• the team is assembled and familiar with the business, data, and decision process; and
• the models are already constructed and can be easily modified to accommodate more strategic scenarios.
As General Eisenhower said when planning Operation Overlord -- the D-Day invasion of France – “Plans are Nothing. Planning is Everything.” Reflecting back, this is truer today than ever.
Labels: Steve Ellet, Strategy, Supply Chain Network Design
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posted by Chainalytics @ 7:24 AM
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