Today I had the opportunity to take part at a Master Class on Supply chain management with Professor Martin Christopher from Cranfield University, Bedford, UK. The master class was hosted by Implement Consulting and the attendants were coming from all Industries in Denmark.
Professor Christopher succeeded to draw a relevant picture of the future trends and challenges to global supply chain management and to manufacturing in particular, and I would like to share a couple of quotes and thoughts.
- Move from forecast driven to demand driven – Instead of planning to replenish inventory, establish supply chains that allow you to fulfill demand as a single event.
- For products, where individuality and responsiveness are relevant, the agile supply chain – and the agile manufacturing process – must be designed for responsiveness, not for the lowest cost. Responsiveness has to be built in the process and comes with a certain cost.
- Substitute information for inventory – sharing information on demand and supply chain execution across the supply chain helps reducing or even eliminating inventory.
- Flexible capacity – Move from static capacity to flexible capacity models, that allow to scale according to actual demand. Instead of acquiring manufacturing and distribution capacity based on forecast before the fact, a now model of
acquiring capacity options that can be used on specific actual demand is emerging in the markets. - Economics of scale vs. Economics of scope – Instead of the volume of products, the bandwidth of products that can be delivered out of a supply chain drives the economic success.
It was an inspiring morning, leaving me with a lot of thoughts and ideas.
If you are inspired as well about these topics, join Roxana, Sverre and me at our session on Mass customization in a distributed supply chain in Microsoft Dynamics AX 2012 R2 at Convergence EMEA in Barcelona next
week, where we will share our vision on how the combination of product configuration, intercompany planning and lean manufacturing can bring you to the next level of supply chain excellence.
Thanks for sharing.
Excellent ideas – thanks for capturing and sharing, Conrad. See you in a couple of days at the conference.
Martin Christopher has actually been promoting the agile supply chain structures for the last decade. The typical figure which is often show-cased is the variety vs. variability relation in which either the lean
or the agile approach can/should be determined for defining a given supply chain design.
Although quite entertaining – participated in a similar session a couple of years back – it is still
flawed in the sense that it (1) too high level, (2) lacks a holistical approach to supply chain design and (3) refers more to the general concept than the actual context.
Although agreed that a more demand driven approach should be implemented if e.g. the demand follows a more intermittent demand pattern with a typical negative binomial probability distribution. But if the customer delivery date requirements is a max of e.g. two weeks and some components' lead time in the product delivered are + 10 weeks – the "responsive" supply chain is a bit harder to implement.
Likewise it would be easy to outline 6-8 critical and very different parameters in which highly affects a given supply chain design in relation to demand planning, supply planning, distribution setup and manufacturing execution. Too often the supply chain philosophies (lean, agile, leagile, quick response manufacturing etc) has a simplistic approach and miss critical design elements.
Whether it is labelled as demand or forecast driven is really not that important – particularly since a given company is presumably utilizing a combination of different operational tactics.
But in relation to what is being done at Microsoft in the supply chain and operational area we in the Dynamics market surely welcomes all the exiting functionality that is being released. Whether it is mass-customization through the constraint-based product configurator, the lean manufacturing module, forecasting through SQL analysis services or WAX / TRAX integration.
It is definitely solid work that is being done in Vedbæk and Redmond as we speak – therefore keep getting inspiration from the outside, listen to customer requirements and the sky must be the limit for the future Dynamics AX platform!