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;
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…
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.
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.
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.
Champions aren't made in gyms, champions are made from something they have deep inside them - a desire, a dream, a vision. They have to have last-minute stamina, they have to be a little faster, they have to have the skill and the will. But the will must be stronger than the skill. -Muhammad Ali I'll be more enthusiastic about encouraging thinking outside the box when there's evidence of any thinking going on inside it. - Terry Pratchett Not to be absolutely certain is, I think, one of the essential things in rationality. - Bertrand Russell What we think, or what we know, or what we believe is, in the end, of little consequence. The only consequence is what we do. Sometimes what's right isn't as important as what's profitable. - Trey Parker and Matt Stone There are only two kinds of people who are really fascinating: people who know absolutely everything, and people who know absolutely nothing. - Oscar Wilde Sometimes I lie awake at night, and I ask, "Where have I gone wrong?"/ Then a voice says to me, "This is going to take more than one night." - Charles M. Schulz There is nothing worse than aggressive stupidity. - Johann Wolfgang von Goethe The significance of man is that he is insignificant and is aware of it. - Carl Becker A lie can travel halfway around the world while the truth is putting on its shoes. - Mark Twain "If you know how to spend less than you get, you have the philosopher's stone." So said Benjamin Franklin more than 200 years ago. How much easier it is to be critical than to be correct. - Benjamin Disraeli Of course the game is rigged. Don't let that stop you--if you don't play, you can't win. - Robert Heinlein Ability will never catch up with the demand for it. - Malcolm Forbes No man remains quite what he was when he recognizes himself. - Thomas Mann No man needs a vacation so much as the man who has just had one. - Elbert Hubbard There is no pleasure in having nothing to do; the fun is in having lots to do and not doing it. - Mary Wilson Little Books to the ceiling,/ Books to the sky,/ My pile of books is a mile high./ How I love them! How I need them!/ I'll have a long beard by the time I read them. - Arnold Lobel Leif Ostling said in a statement that his comments about Germany had been "interpreted in a way that was not intended." If a man will begin with certainties, he shall end in doubts; but if he will be content to begin with doubts he shall end in certainties. - Sir Francis Bacon "It's not the voting that's democracy, it's the counting." - Tom Stoppard Elections are won by men and women chiefly because most people vote against somebody rather than for somebody. - Franklin P. Adams Invention is the mother of necessity. - Thorstein Veblen Don't try to solve serious matters in the middle of the night. - Philip K. Dick
Ich weiß nicht was soll es bedeuten Daß ich so traurig bin; Ein Märchen aus alten Zeiten, Das kommt mir nicht aus dem Sinn.
Die Luft ist kühl und es dunkelt, Und ruhig fließt der Rhein; Der Gipfel des Berges funkelt Im Abendsonnenschein.
Die schönste Jungfrau sitzet Dort oben wunderbar, Ihr goldenes Geschmeide blitzet, Sie kämmt ihr goldenes Haar.
Sie kämmt es mit goldenem Kamme Und singt ein Lied dabey; Das hat eine wundersame, Gewaltige Melodei.
Den Schiffer, im kleinen Schiffe, Ergreift es mit wildem Weh; Er schaut nicht die Felsenriffe, Er schaut nur hinauf in die Höh´.
Ich glaube, die Wellen verschlingen Am Ende Schiffer und Kahn; Und das hat mit ihrem Singen Die Lore-Ley getan.