By: Lee A. Falk
For many in the challenging supply chain profession, golfing is a way for us to relax and get some relief from our stressful roles. Yet golfing can be just as stressful or frustrating as the very supply chains we seek to forget. Sadly, at the end of the season, we often find ourselves frustrated once again with no marked improvement in our game and no impressive scorecards covering the refrigerator door.
Like people wanting a magic pill to remedy underlying health concerns, golfers often believe that a new set of clubs incorporating the latest state-of-the-art technology and gadgetry, coupled with a slick marketing campaign, is all they’ll need to significantly improve their scores. Yet the stark reality is a bad golf swing is just that…a bad golf swing, and all the newest clubs or gadgets in the world will not help.
Ironically, when polled 85% of golfers stated they want to play better and improve their scores, yet the same 85% stated they have yet to take any professional lessons or obtain even a basic swing evaluation. Many PGA club pros will tell you that the biggest improvements anyone can make to their golf game is from the simplest fundamental changes, such as a grip change, improved stance, ball position or correcting a back swing. Speaking from experience, when I moved to New Mexico in my early 30s my golf game was lacking, to say the least, often winning the “Most Honest Golfer” award at our annual company outing. Yet after taking just two short professional lessons, changing my grip slightly and a couple minor adjustments, I reduced my average score by 20 strokes.
Golf as an Avatar of the Supply Chain
Is your supply chain analogous to our golf example above? Is your supply chain subpar? In many ways supply chains are like golf. We often think of our supply chains are ineffective, all we need is the latest technology, new systems and/or new capital investments. Yet like the example above, more times than not, we just need a review of our core business processes. In essence, we need a health check and frank assessment of our demand chain. Yet if we listen to all the supply chain publications and industry hype, a smooth-running world-class supply chain is just a mere new software or buzzword away. Control Towers, Blockchain, Digital Transformation, IOT and an Agile culture are just a few that come to mind. Albeit each of these has their place, and each are key components that can be found in any integrated world class supply chain, their implementation is generally burdened with significant change management, labor, investments and mid-to-longer-term time horizons. This is the very reason an initial demand chain deep dive is necessary to assess the real underlying issues, gaps and risks before resources are potentially wasted on large sunken investments or commitments are made that cannot be reversed.
Bottom Line Needs to be the Focus
Often significant short-term improvements in On Time In Full (OTIF), as well large operating cost reductions, can be garnered just by evaluating and identifying deficiencies in core supply chain processes. These very short-term wins in essence can help CPG companies bridge stagnant top line sales and lengthy investment payback periods. Costs associated with the movement of goods from raw materials to finished goods to ultimately the end consumer are highly variable in nature, sometimes as much as 25-30% of Cost of Goods Sold (COGS). As a result, near-term process improvements can deliver immediate positive impact to the P/L, as well as improved liquidity and cash flows. Albeit new product innovation pipelines are full and transformation roadmaps are aplenty, a demand chain deep dive and potential associated benefits may be just the answer companies in today’s business climate are looking for.
Demand chain AI, a consultancy and consortium of 30+ Food and Beverage CPG experts with over 1,000 years combined experience across the entire value chain has developed its very own “Demand Chain Deep Dive” program. The short term highly focused engagement focuses on nine key components within the demand chain, from end consumer back to raw materials. Purposedly designed with a defined beginning and end in mind, the program typically takes approximately six to eight weeks to complete. Upon completion the client can expect a comprehensive Baseline Assessment, Gap to Best in Class Metrics/Economics, Prioritized Short-term Available Wins and High-level Strategic Roadmap. So, if your supply chain is not up to par as of late, maybe you should consider skipping and/or at least pausing the new tech (i.e. new clubs) and investing a little time and resources in a demand chain deep dive.
If interested, please click HERE and a Demand Chain AI representative will contact you.
