The Big Game & Supply Chain Planning
Did you watch the Super Bowl this past Sunday? Whether you were pulling for the Panthers or betting on the Broncos, I wonder if you were drawing any analogies to supply chain planning?
While I was watching the game, it occurred to me that much like football, business success depends on having good personnel and a precise, but flexible game plan. You need both to succeed, but the best game plans will make your people as effective as they can possibly be.
Wade Phillips and the Denver defense did well to understand and shut down the strengths of the Carolina offense. They put tremendous pressure on Carolina quarterback Cam Newton and used a dedicated spy to prevent him from scrambling. This forced Carolina to try and pass more than they were comfortable with, and in this situation Denver relied on a strength of their own – the defensive backs – to lock down the passing game.
Bottom line: Denver predicted the Carolina offense to a ‘T,’ positioned themselves to maximize their own strengths and executed perfectly.
If winning in business means making your customers raving fans while still improving your sales and profit, then demand planning is your game plan for making that happen.
The more precisely you can predict what your customers are going to do, the more effectively and efficiently you can serve your customers. Yet, since it is impossible to know the future with 100% certainty, it is equally important your plan is flexible enough to respond to unforeseen circumstances.
Predicting the Next Play
You might think that it’s easier for football teams to predict and game plan because they can clearly see the big picture—the whole football field—and there are simply fewer moving parts compared to the complex commerce demands of your business...
In the recent past, that would most certainly be true. But have you ever thought about what it would be like if your business could have clear visibility into customer demand? Because you know what? Now you can.
The truth is that big data and the ability to analyze and act on it has revolutionized our understanding of customers (whether your customers are other businesses or end consumers). With a deep, granular understanding of customers, visibility and planning precision is enabled on a whole new level. If you’re not taking advantage of this type of data, you may find yourself attempting to compete without the ability to change plays at the line of scrimmage (in other words, analyze data and adjust your plan in real time).
Imagine this: Instead of trying to generate a forecast by just using raw statistics based on a day’s or week’s activity, imagine that you could do the following:
- Analyze every customer interaction.
- Understand the influences, events and conditions that determine customer demand.
- Predict demand more precisely than statistical forecasts ever could.
- Use your understanding of your customer to build the most economically proficient plan for positioning and moving goods into your customers’ hands.
Can you imagine the additional sales you’d capture, the unnecessary inventory and costs you’d cut, and the competitive advantage you’d gain?
Now that’s a winning formula!
Coping with the Unexpected
One of the other things I witnessed this Sunday was how the teams coped or didn’t cope with those unexpected adverse situations.
Von Miller, Denver’s All Pro defensive end, proved to be a serious disruptive force, causing two fumbles, multiple sacks, and tackling several Panthers for a loss or minimal gain. Some would say the Panthers system was simply not adaptable enough to adjust to the pressure put upon them by the Denver defense.
I wondered though, which is more important?
- How a team responds to an interruption of momentum?
- How a team anticipates what move the other players are going to make?
Ok, I have to say, it’s not one or the other. It’s clear to me that the combination of both is what determines who wins the game.
When it comes to your supply chain...
- Are your planning tools predicting precisely what your customer will buy, when, and where based on indicators they’ve given you?
- Are you just taking guesses based on last year’s stats?
- Is your technology flexible enough that when a disruption occurs, such as a supplier shortage, that it can automatically adjust and create a new plan that meets your customer demand?
You probably heard Peyton Manning yelling “Omaha” a lot this season...and you probably also realized that this often signaled to his team they were going to change the play on the fly. Manning constantly responds to the real-time “data” he's collecting in game-time situations, and capitalizes on new opportunities presented by information changes.
Can your planning tools do that? What if, when your supplier has a capacity constraint, your technology could automatically source the goods from another supplier and ensure product availability to your customers without any interruption?
What’s your playbook look like?
It’s time the supply chain playbook starts to take a more proactive mindset, instead of the reactionary mode that the supply chain industry has been stuck in for decades. Let’s leave behind the simplistic approach of hoping the past will repeat itself, and let’s play a more predictive game that’s more connected to your customers and in synch with your business goal.