Global supply chains and the CIO

Global supply chains and the CIO

---

InformationWeek has a very interesting and timely article entitled “Global CIO: Global supply chains and the CIO.” This discussion goes hand in hand with what I’ve been thinking (and blogging) about recently. (See my post last month “The right supply chain management priorities during the downturn position you for future success“) Our natural inclination during a recession is to batten down the hatches and wait out the storm. Stop all spending, suspend projects, layoff anybody not critical to the functioning of the business. The question to ask is “How does this strategy position my company after the recession ends?” Don’t get me wrong. Companies should always be looking at trimming projects, processes and people that don’t contribute value to the organization. Cut out the fat so to speak. However, when these cuts start cutting into meat and bone, you’ve left your company weaker rather than stronger.


In fact, recessions are exactly the time to make careful, strategic investments in your business. In your article, you’ve identified some great areas on which to focus, both for cost cutting and for strategic investment. Some additional areas of investment are as follows;

1. Implement lean manufacturing: Take apart your processes, examine each piece, identify which steps add value to the customer and which steps are waste. Then you put the process back together, keeping the parts that add value and discarding the steps that don’t. Once you have your internal processes in order, reach out to suppliers and customers to help them improve. Then you continuously improve. Sounds simple but it’s devilishly difficult to do – especially when you are struggling to meet demands. But then again, in a down market meeting demands isn’t such a big issue…
2. Implement Sales and Operations Planning (S&OP): S&OP provides two key benefits; visibility to demand and supply projections into the mid to long term (typically 12- 18 months) and the ability to bring the various departments together (Sales, Marketing, Supply Chain Management, Finance) to define a plan that all understand and agree to.
3. Implement a Supply Chain Risk Management process: Companies that have the tools and processes to predict and mitigate risk as well as respond quickly when the unexpected happens will be able to survive a supply chain event relatively unscathed.
4. Implement tools and processes to help you respond to change: Successful companies have tools and processes that allow them to very quickly react to change and re-align on a corrected course. To successfully respond to changes you need tools that deliver supply chain visibility, provide the ability to simulate changes and responses, enable collaboration with your team inside and outside the company and provide alerting mechanisms to let you know when something has happened.

The interesting thing about these investments is that while they position your company for growth when the recession ends, they also are excellent tools to help you manage your business during the recession. And that can’t hurt.


John Westerveld is a Product Manager for Kinaxis, provider of the on-demand RapidResponse service that empowers multi-enterprise manufacturers with the collaborative and integrated demand-supply planning, monitoring, and response capabilities.