>Supply Chain Management – 10 Key Learnings from the 2011 Aberdeen Summit

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by Nari Viswanathan

First, I would like to express my thanks to everyone who participated in this event and contributed to its success.  March 29th and 30^th was a time of learning, sharing and networking for industry leaders seeking to address current global supply chain challenges, and bring new solutions and learnings to the fore, doing justice to the event theme “From Strategy to Execution: Priorities of the Chief Supply Chain Officer”.
Below is a quick summary of ten key takeaways from the Chicago event…

10. Business model specific SCM solutions – Configure-to-order environments require special capabilities to gain significant business benefits. Terry Beachey, Director of Global Supply Chain, Rosemount Measurement, a division of Emerson Process Management discussed how their business model has unique challenges due to the large number of configurations and how their APS solution was able to solve them.
9. Vested outsourcing – As presented in the session by Kate Vitasek, Faculty, Center for Executive Education, College of Business Administration, University of Tennessee at Knoxville and Author, Vested Outsourcing, companies need to look at the outsourcing problem through a different lens given the large extent of outsourcing occurring in companies. It is crucial to gain insights from game theory and behavioral studies to identify and implement “win-win” situations between suppliers and manufacturers.
8. Supply chain transformation should not be disruptive – Customers should not be aware of transformation. It should be seamless to them. Example: Dave Harrington, Vice President Supply Chain & Corporate Quality, Stratus Technologies talked about how they were able to transform their entire supply network with minimal hitch to their customer fulfillment process. Kelly Abney, Vice President International Logistics, Wal-Mart, Rick McDonald, Vice President, Global Logistics, The Clorox Company, Jose E. Melendez, Supply Chain Team Lead – Global Walmart Team, SC Johnson & Son, Inc. were in a first of its kind panel sharing detailed insights on how their inbound collaborative transportation processes were evolving. As with any transformation activities, there will always be challenges but with collaborative effort they can be resolved was the gist of the discussion.
7. Expanding role of BI solutions – Companies should focus more on the data analysis. Tom Dadmun, Vice President, Program Management Office, Adtran  shared how they were initially focusing 80% of their time on data collection and only 20 % on data analysis. Now, with the utilization of a robust BI solution, they are able to reverse the situation with their analysts utilizing 80% of the time for data analysis. Also, their top executives are now able to view the reports and dashboards in a self-service fashion as well. Brian Margolies, CIO, Allied Beverage Group LLC also shared a similar story regarding their data acquisition and analysis procedures in a round table discussion.
6. Total Cost to Serve – Companies are looking at costs closely. Every penny matters. There is a need for technology solution to manage these costs at a granular level. Example: Kelly Abney, Vice President International Logistics, Wal-Mart and Bob Gooby, Vice President, Process Redesign, McKesson discussed how they were looking at the highly- detailed level costs and arrived at transformative approaches to reduce costs for the entire supply chain.
5. Football and supply chain have much in common – Both games require significant team play and collaboration. The game may be short, but in preparation for it the teams must prepare extremely well, otherwise their lack of preparation will be exposed to everyone. Based on the presentation by Michael A. Massetti, Corporate Vice President, Supply Chain, AMD, the same is true with supply chain, where execution will be seamless only if there is good planning. Both have concepts of process playbooks where you could have an offensive play or a defensive play. An example of a defensive play is storing additional inventory in buffers, while an offensive play is to do Direct-to-Store delivery while eliminating intermediate inventory buffers.
4. Response management – Traditional siloed planning approaches do not work in today’s highly dynamic business environments. You need a real-time solution and supply chain visibility focus. This was a theme across several different presentations, particularly those delivered by Don Esses, Vice President, Supply Chain, Qualcomm, Jim Matthews, Senior Director, Business and IT Solutions Group, Research in Motion (RIM) and Neil Hampshire, VP IT – Global Business Units & Business Support Functions, Avon Products, Inc.
3. Risk management – Risk management is a key focus area due to the myriad catastrophic events happening around the world. Companies need to create buffers in the supply chain to manage disruptions and have a contingency plan in place, as we saw in a session from Kevin Harrington, Vice President, Global Business Operations, Customer Value Chain Management  which addressed this topic in detail.
2. S&OP must integrate with finance- Sales and Operations Planning continues to be a critical driver in companies. We had several sessions – Matt Filbern, Vice President, Operations and Supply Chain, Jarden HomeBrands, a division of Jarden Corporation, Terry Beachey, Director of Global Supply Chain, Rosemount Measurement, a division of Emerson Process Management, Nikhil Sagar, Vice President, Retail Inventory Management, OfficeMax and others that reviewed the pivotal role of their S&OP process. The one difference we saw this year was the success these companies achieved by developing a robust process and implementing associated technology.
1. Emergence of the Chief Supply Chain Officer – The CSCO is becoming a key role in companies today, although many companies do not yet have a formal CSCO title. In fact, one outcome of the panel and round table discussions was that the title does not matter – all that matters is the extent of empowerment associated with the role. CSCOs need to be empowered to make transformation decisions, including technology spend, so that they can align their supply chain strategies and tactics with the business goals. Dennis Omanoff, Senior Vice President, Worldwide Supply Chain, Procurement, Travel & Corporate Real Estate also talked about this in his keynote address.
As we indicated in a previous press release the 2011 SCM excellence award nominees are:

• Sonoco (NYSE: SON), global supplier of industrial and consumer packaging, provider of packaging solutions,
• Stanley Black & Decker (NYSE: SWK), formed by merger of Stanley Works and Black & Decker, manufacturer of tools, hardware and provider of security products,
• Nash Finch Company (NASDAQ: NAFC), second largest publicly traded wholesale food distributor in the United States,

We announced at the event that Nash Finch Company won the award. Please congratulate them in their success.
 I would also like to thank the following:

• Summit attendees for all their support in participation, networking, and high levels of engagement throughout the event,-Summit publication partners for their ongoing support
• Summit sponsors for helping make this event possible through their generous support. There are thought leaders and domain experts in these companies who can really help your companies gain business value.
• The entire Aberdeen team who worked hard behind the scenes to make the entire experience a productive and rewarding experience for all the Summit participants.

It is my great privilege to mark the conclusion of the extremely successful 5^th Annual Aberdeen Supply Chain Management Summit. We look forward to meeting you next year!

Related articles

• Virtual Knowledge Supply Chains (manufacturing.hubspot.com)
• How to Automate and Manage Supply Chain Purchases (demandmetric.com)
• High-profile industry experts to address Supply Chain Canada conference (roadwarriar.wordpress.com)
• Strategies for Measuring Supply Chain Performance (brighthub.com)
• Global supply chain unease rises (search.japantimes.co.jp)

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>Actionable Insight: Engaging Consumers and Suppliers

>

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Sustainable practices: engaging consumers and suppliers — by Grace Segran, London — Coca-Cola is one firm that knows very well that its environmental and economic impact extends well beyond its factory gates. This starts with the ingredients it needs for its products to the natural resources required to make the packaging, “extending all the way to the people who buy and consume our drinks and handle the packaging,” says CCE Europe’s Communications Director, Shanna Wendt who spoke to INSEAD Knowledge on the sidelines of a supply chain conference here recently. Shanna Wend With companies increasingly being held accountable for the environmental and social practices of their supply chain, how then do they go about engaging consumers and suppliers in their supply chain? Engaging consumers CC has carried out research into the consumers’ perspective on the environment- what they care about, their level of knowledge, and how this influences their purchasing decisions. “What’s clear to us from the available research is a growing interest from consumers for environmental information about the products they are purchasing,” says Wendt. “It also confirms that when it comes to food and the environment, consumers find food waste and packaging most relevant. Nevertheless, we have less evidence to pinpoint the best way to communicate this information.” CC is aiming to encourage sustainable behaviour such as recycling their drinks packaging, and have started putting recycling messages on some of their packs, that is, at point-of-sale. “It’s still early days, and we need more time to understand whether this is leading to more sustainable consumption and use of our drinks,” says Wendt. “What we do know for certain is that corporate responsibility and sustainability is one of the top three drivers of employee engagement,” she adds. “So, our commitment to sustainability and our communication on sustainability start with our employees. And these employees are consumers, too.” In recent years, CCE has ramped up communication on sustainability across all its sites with the purpose of moving from awareness to involvement. “We are making progress in the right direction. In a recent survey of employees on our internal communication, 80 per cent told us they knew more about sustainability within CCE, and almost half told us they had changed their behaviour,” says Wendt. Two diverging trends Certification is one means to assess the sustainability of a product or business. There are many different avenues today by which products can be certified on different sustainability measures: How was the product sourced? What impact does the product have on the area from which it sourced? According to Wendt, there is no consistently-agreed approach today for communicating with the consumer about sustainability. Even comparing one product with another is not necessarily helping consumers make choices that are relevant to the way they live. “We think consumers may be interested to know not just the carbon footprints of a soft drink and a steak but how that compares to a car journey or flight, and a shower or bath.” A personal carbon ‘allowance’ would be one way in which consumers could begin to make sense of the environmental trade-offs between activities, says Wendt. For example, ready-made lamb curry meals eaten in the UK amount to an annual carbon footprint equivalent to 5,500 car trips around the world, but the same meal made at home would have a 20 per cent lower carbon footprint, according to research carried out by Manchester University and funded by the Carbon Trust, the Engineering & Physical Sciences Research Council and the Natural Environment Research Council. Labelling is one means by which to communicate on sustainability. This could be either the sustainability of the product and packaging, or a specific call to action for consumers in how they use the product. “While it is one way to talk to consumers, it isn’t the only way, and our view is that this is not the best way to communicate really complex information,” argues Wendt. “Instead we use the web, point-of-sale and events – such as making recycling easier and rewarding at music festivals across Great Britain this summer, to engage consumers on sustainability enabling them to get more information and ask questions.” Engaging suppliers One of the main concerns of companies who want to operate a sustainable supply chain is engaging suppliers who are based across the world to measure and improve their sustainability performance. Pierre-Francois Thaler “This exercise can be very complex due to the cost of auditing thousands of suppliers, and the different environmental and social issues and regulations in each sector,” says EcoVadis Managing Director Pierre-Francois Thaler (MBA ’99D). “This is even more complex when you realise that the ‘sustainability’ performance of a product depends not only on the performance of tier one suppliers, but also from all the suppliers (raw materials, transport, etc.) engaged in the lower tier of the supply chains.” In order to address these issues, EcoVadis has launched a collaborative online platform, which allows companies to share the costs of assessing suppliers’ sustainability performance, while increasing the reliability of the information. “Our solution combines information technology and data verification by expert CSR (corporate social responsibility) analysts to gather, analyse and score the performance of suppliers on 21 criteria (CO2 emissions, biodiversity, health and safety, corruption, etc), covering 150 industry sectors, and 80 countries,” Thaler told INSEAD Knowledge. The platform allows buyers to identify and reduce risks associated with suppliers’ environmental and social practices, while suppliers can use the tool to benchmark their practices with their peers. “We hope that, in the future, sustainability will become a more and more important criterion in the suppliers’ selection process,” Thaler say, “thus contributing to improvement of practices of companies worldwide.” The LCA (Life Cycle Assessment) Sustainable Supply Chain Conference was held in London on May 25-26. O2ibm Visit this Open Forum

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>Actionable Insight: Engaging Consumers and Suppliers

>

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Sustainable practices: engaging consumers and suppliers — by Grace Segran, London — Coca-Cola is one firm that knows very well that its environmental and economic impact extends well beyond its factory gates. This starts with the ingredients it needs for its products to the natural resources required to make the packaging, “extending all the way to the people who buy and consume our drinks and handle the packaging,” says CCE Europe’s Communications Director, Shanna Wendt who spoke to INSEAD Knowledge on the sidelines of a supply chain conference here recently. Shanna Wend With companies increasingly being held accountable for the environmental and social practices of their supply chain, how then do they go about engaging consumers and suppliers in their supply chain? Engaging consumers CC has carried out research into the consumers’ perspective on the environment- what they care about, their level of knowledge, and how this influences their purchasing decisions. “What’s clear to us from the available research is a growing interest from consumers for environmental information about the products they are purchasing,” says Wendt. “It also confirms that when it comes to food and the environment, consumers find food waste and packaging most relevant. Nevertheless, we have less evidence to pinpoint the best way to communicate this information.” CC is aiming to encourage sustainable behaviour such as recycling their drinks packaging, and have started putting recycling messages on some of their packs, that is, at point-of-sale. “It’s still early days, and we need more time to understand whether this is leading to more sustainable consumption and use of our drinks,” says Wendt. “What we do know for certain is that corporate responsibility and sustainability is one of the top three drivers of employee engagement,” she adds. “So, our commitment to sustainability and our communication on sustainability start with our employees. And these employees are consumers, too.” In recent years, CCE has ramped up communication on sustainability across all its sites with the purpose of moving from awareness to involvement. “We are making progress in the right direction. In a recent survey of employees on our internal communication, 80 per cent told us they knew more about sustainability within CCE, and almost half told us they had changed their behaviour,” says Wendt. Two diverging trends Certification is one means to assess the sustainability of a product or business. There are many different avenues today by which products can be certified on different sustainability measures: How was the product sourced? What impact does the product have on the area from which it sourced? According to Wendt, there is no consistently-agreed approach today for communicating with the consumer about sustainability. Even comparing one product with another is not necessarily helping consumers make choices that are relevant to the way they live. “We think consumers may be interested to know not just the carbon footprints of a soft drink and a steak but how that compares to a car journey or flight, and a shower or bath.” A personal carbon ‘allowance’ would be one way in which consumers could begin to make sense of the environmental trade-offs between activities, says Wendt. For example, ready-made lamb curry meals eaten in the UK amount to an annual carbon footprint equivalent to 5,500 car trips around the world, but the same meal made at home would have a 20 per cent lower carbon footprint, according to research carried out by Manchester University and funded by the Carbon Trust, the Engineering & Physical Sciences Research Council and the Natural Environment Research Council. Labelling is one means by which to communicate on sustainability. This could be either the sustainability of the product and packaging, or a specific call to action for consumers in how they use the product. “While it is one way to talk to consumers, it isn’t the only way, and our view is that this is not the best way to communicate really complex information,” argues Wendt. “Instead we use the web, point-of-sale and events – such as making recycling easier and rewarding at music festivals across Great Britain this summer, to engage consumers on sustainability enabling them to get more information and ask questions.” Engaging suppliers One of the main concerns of companies who want to operate a sustainable supply chain is engaging suppliers who are based across the world to measure and improve their sustainability performance. Pierre-Francois Thaler “This exercise can be very complex due to the cost of auditing thousands of suppliers, and the different environmental and social issues and regulations in each sector,” says EcoVadis Managing Director Pierre-Francois Thaler (MBA ’99D). “This is even more complex when you realise that the ‘sustainability’ performance of a product depends not only on the performance of tier one suppliers, but also from all the suppliers (raw materials, transport, etc.) engaged in the lower tier of the supply chains.” In order to address these issues, EcoVadis has launched a collaborative online platform, which allows companies to share the costs of assessing suppliers’ sustainability performance, while increasing the reliability of the information. “Our solution combines information technology and data verification by expert CSR (corporate social responsibility) analysts to gather, analyse and score the performance of suppliers on 21 criteria (CO2 emissions, biodiversity, health and safety, corruption, etc), covering 150 industry sectors, and 80 countries,” Thaler told INSEAD Knowledge. The platform allows buyers to identify and reduce risks associated with suppliers’ environmental and social practices, while suppliers can use the tool to benchmark their practices with their peers. “We hope that, in the future, sustainability will become a more and more important criterion in the suppliers’ selection process,” Thaler say, “thus contributing to improvement of practices of companies worldwide.” The LCA (Life Cycle Assessment) Sustainable Supply Chain Conference was held in London on May 25-26. O2ibm Visit this Open Forum

ACTIONABLE INSIGHTS >>> KNOWLEDGE YOU CAN TRUST >>> ENJOY IT!