Six lively discussions formed the heart of last week's Intent Group Meeting. Below are short summaries of each discussion:
1. End to End - dream or reality: what should you be striving for, and how?
with thanks to our expert host, Clive Geldard, Efeso
We started with the question - where is your organisation currently on the journey? Working dysfunctionally - siloed behaviours or joined up, IBP, synchronised operating strategies, everyone working towards aligned metrics. Predominantly we found everyone in the early stages of the end to end journey. Some transitioning towards joined up thinking with positive results. Very few companies have achieved a fully synchronised business approach.
What’s inhibiting, and how to progress?
#1 - Lack of E2E systems integration and data visibility was a common challenge but this should not stop companies from working on E2E dynamics
#2 - Understanding of value creation and what end to end means for the bottom line is not always transparent - having an appreciation of cost to serve helps in driving the right decisions, for example with procurement and commercial teams.
#3 - There is a view that leadership can help or hinder the progression towards E2E. Some pointed to entrepreneurial business leaders that insist on calling the shots! This made for an interesting and difficult change dynamic in the context of making E2E working a reality.
#4 - A lot of discussion about ensuring that education was done and raising awareness between functions on what end to end working means - explaining the consequences for the business of not working in a joined up way and what are the desired behaviours.
#5- It was felt that there was no chance of working in an end to end way if the basic foundational capabilities were not in place. Good examples of foundations included clear Process RACI’s (responsible, accountable, consult, inform) and daily management systems that drive process disciplines and right first time outcomes. These are important to gain traction.
In summary, End to End remains work in progress for most companies with more to be done by Leadership teams.
2. AI for inventory: right stock, right place, right time
with thanks to Tom Summerfield and Tom Vaughan of Peak
It was proposed that there is a linear scale of getting good at data and using AI. Where are you on the scale? There are no wrong answers, just interesting perspective. Most suggested they are behind in terms of maturity. A tiny minority were further on and had some internal capability to analyse data, even start practising some data science and AI. That enables you to skip ahead. That led to - wherever you are on the scale - do you know the use cases that you want to pursue? There is a case for some imagination - it feels like - in the day to day of keeping systems and business running - there is little time to step back and consider improvements.
Correlated to the use cases list - some topics on forecasting, further optimisations. Less consideration of growth, more about optimisation. There was a surprising lack of knowledge around what use cases could be useful, which presents an opportunity to start learning about them.
There is a lot of confusion around the types of disciplines you can practise, fundamentally there is confusion around terminology. What is RPA, What is generative AI, what is a large language model, what is machine learning? Peak has a more pragmatic approach. Get the fundamentals right and then focus on value - people come along for the journey then.
There is scope for education at the senior level. If concepts are not understood this can stifle innovation.
You don’t need your data in good order to start. It can be helpful, but is not a blocker - practising inertia in this way will keep you behind your competitors.
3. Digital twins - is that the right way to scenario generation?
With thanks to Shabbir Ahmed and Kevin O’Flynn, Replan
Digital twins - is that the right way to scenario generation?
Everyone had some sort of digital twin already built. For some, it was excel models that do just enough while others have built very advanced digital twin models that incorporate tier 1 suppliers and in some cases tier 2. In some cases that intends to allow them real time visibility.
We tried to focus on three main areas as core challenges that the participants faced:
Why should you do it? There are two camps - small rapidly growing companies are more accustomed to innovation. It’s obvious for them that it will allow them to do supply chain planning esp where constrained and growing quickly - to understand where are their operational risks on the supply chain side.
For large organisations - COVID was significant - supply chain is a more strategic partner. Supply chain is being asked more difficult ‘what if’ questions - what if this supplier goes offline, what impact will that have on our supply chain? How do we prioritise on what to do this or next week? The ability to drive a discussion can then be based on a data driven approach rather than an emotional one.
How do you do it? one challenge we come across: what part should IT play in a transformation like that? Should IT own it, or the business, or a collab with a centre of Excellence. how do you apply metrics to ensure properly aligned. All kinds of dynamics were seen. Skills mix: young grads coming in more used to using advanced tech. Older more experienced planners are used to the tech they have.
What are the risks? Consider, acknowledge and address the change management risk.
Additionally, in terms of digitalisation - there was an inconsistent view in terms of how major it is to digitalise. Eg one case where digitalisation is in place but cynicism can be seen amongst key team members. Cynics will end up using spreadsheets!
3-4 week implementations were unheard of - but can now, with AI, can take weeks not months.
4. The barriers and blockages to IBP process
With thanks to Dave Food & James Gannaway of Board, and Neil Hill of Oliver Wight
Whenever you prepare for something you have to think about the training programme you want - IBP is not a sprint. Not a marathon either. The best way to describe IBP is a marathon obstacle race!
The need for continuous improvement - IBP is not a destination - it’s a journey. These dimensions were explored:
Look at different scenarios to enable the executive team to make a decision
Accountability and ownership - coming back and reviewing the process. Keeping the senior execs involved and have processes and KPIs to ensure everything on track
Data not a blocker - but understanding the data? Maybe. Understanding how it all fits together to make better decisions.
Taking down the barriers is about building flexibility into the team, empowering the team to make better decisions and remove those barriers is about having sth to allow them to make intelligent decisions more effectively.
Carbon Management and Scope 3
With thanks to Byron Cotter & Silvana Centty of Baringa
For many it’s true there is not a true understanding of carbon measurement and Scope 2,3,4. It was generally agreed that organisations are increasingly focusing on decarbonisation and the role of supply chain in that.
Measurement of Scope 3 - how is that being approached. Different approaches for diff types of suppliers.
What are the methodologies to just get started? Many are struggling to understand - is it a spend based approach, a primary data approach or somewhere in between? The answer is that it’s all of the above. So huge data complexities: lots of data needs to come together to understand where risks are. Data needs to be pulled from inside and outside organisation across disparate systems and SC. How does the data stitch together and drive decisions to drive carbon reductions?
Scope 3 - represents 80-90% of carbon emissions. Shifting focus at C Suite and board level.
There are varying levels of maturity - some have advanced approaches, many just starting.
How do we get carbon up the agenda in commercial decision making? One key strategy is to integrate the cost of carbon into strategic decision making at board level.
Organisations are trying to drive improvements - and also legislator driven advances.
Logistics Service Partnerships - Raising the Bar
with thanks to Dan Myers and Claire Freeman of XPO
It does not matter how good the product is if you can’t get it to the customer in a way that meets their expectations!
Considerations in selecting a partner
i. Importance of people and the relationship, ie trust and cultural alignment.
ii Sharing of ESG values and roadmaps will become an even bigger part of selection criteria in future.
Iii. Resilience and changing to adapt to customer expectations. B2C is creeping over to B2B in terms of expectations. Change at pace and scale.
iv.. Expectations - more than doing the basics well - they are looking for greater value in terms of investment in time and resources and cash. Also an intimate engagement - about being really aware of customer needs and ensuring the business involves in line with the needs of the client.
Check out the next meeting here. You can save your place now!
