Volatility, uncertainty, complexity and ambiguity have become ever-present factors in the market. The result? Some traditional supply chain processes are stretched to breaking point. How do organizations build the required capabilities to sustain and grow their businesses in this increasingly volatile and unpredictable environment?
Confronting the Harsh New Reality In S&OP and Demand Planning
Supply chain teams across all industry sectors have been forced to confront this reality and improve S&OP to reduce risk. This initially leads many companies to implement workarounds in an attempt to cope with these environmental factors. However, many organisations have taken a bolder view and are embarking on programmes to enhance their execution of existing and established supply chain management approaches (such as S&OP or IBP). Businesses are also beginning to explore emerging and innovative tools (such as leveraging Big Data, digital connectivity/the Internet of Things (IoT) and new analytics techniques).
Going Beyond Supply Chain To Enterprise-wide
It is tempting to see these initiatives as supply chain transformation programmes but the reality of the Volatility, Uncertainty, Complexity and Ambiguity (VUCA) environmental challenges, and the nature of the solutions that can address them, is that they are enterprise-wide transformation initiatives.
Attempting to run an improved version of S&OP, or develop to full Integrated Business Planning (IBP), is pointless without full cross-functional participation. Similarly, if a company cannot operate a joined-up and enterprise-optimised decision making process today with the limited data it has available, adding even more data from the world of Big Data and IoT will simply create overload rather than provide better market understanding.
Most crucially, these changes require fundamental behavioural and mindset change across functions and at all levels.
The Buzzword That Has Never Been More Important in S&OP: Cross-functionality
Achieving and sustaining such enterprise-wide change is challenging; these processes are highly cross-functional and have many inter-dependencies across the business that must be aligned. Deploying S&OP/IBP or exploiting new customer data requires a diverse scope of solutions spanning people, process and systems to be coordinated carefully. Most crucially, these changes require fundamental behavioural and mindset change across functions and at all levels to secure a sustainable and effective change. All these factors point to the criticality of excellent change management both across functions and multiple dimensions. Soft-skills, influence, leadership and collaboration are key.
Gladwell provides a clear toolbox for change and the ability to track and measure key progress measures.
Selecting a Change Management Model – ‘The Tipping Point’ By Malcom Gladwell
There are many established frameworks to codify and plan change, but which one do you select and deploy? A key consideration in this context is the challenge outlined above – achieving sustainable mindset and behavioural change through the whole enterprise. This requires a change approach that engages individuals at all levels right from the start and provides them with the tools and the ability to drive change from their own area of activity.
A change framework worth exploring in this context is the Tipping Point change approach (based on the concepts first developed by Malcolm Gladwell in his book of the same name) and later described by Shapiro in ‘Creating Contagious Commitment’ (2003). The great benefits of its approach are its intuitive simplicity, a clear toolbox for change and the ability to track and measure key progress measures. Addressing the many upcoming supply chain challenges increasingly requires excellent cross-functional change management – now is the time to start exploring and building this capability.
Neil spoke recently at IBF’s ‘Business Planning, Forecasting and S&OP Conference: Europe’, in Amsterdam. We look forward to welcoming you to the next conference in Amsterdam, from 14-16th November 2018. Reserve your place here.