SC PLANNING & OPTIMIZATION
The Priority of the Chief
Supply Chain Officer Is
Strategic Supply Chain
Planning
The chief supply chain officer's
(CSCO) role provides a way for
the supply chain to earn a
place in the board room and
drive strategic decision making. The CSCO has emerged as
a key stakeholder in the company to make supply chain
transformation happen.
Supply chain planning is an
important approach for CSCOs
to create value for their enterprise. In fact, 86 percent of
respondents indicate that their
management team has asked
them to review the supply
chain process in order to find
opportunities to improve their
company's supply chain planning processes, and 71 percent
of respondents have indicated
the same for supply chain
technology improvement.
—Nari Viswanathan, vice president &
principal analyst at Aberdeen Group
he following functional areas within supply chain planning can
be described as process capability Level I: demand forecasting,
demand collaboration, supply planning and inventory management. These are areas which provide the ability for companies
to improve their inventory turns, forecast accuracy and customer service level
metrics, according to our survey, Strategic Supply Chain Planning: Priorities of
the Chief Supply Chain Officer. However, these functional areas do not address
the strategic time frame planning of their companies.
Whereas when it comes to more advanced capabilities such as simulation, network design, risk management, etc., Best-in-Class companies do not have a significant advantage over all other companies. These functional areas can be described
as process capability Level II. These are the crucial ingredients for companies to
manage long-term supply risk and long-term sustainability goals through simulation, predictive analytics and other similar approaches. Best-in-Class companies
do not have a higher capability level in these areas because mastering these
process areas is difficult.
The following are key priorities for CSCOs:
• Supply-demand-finance balancing is critical. Even though demand fore-
casting is a key area of implementation plan for companies in this survey ( 46
percent), the respondents have expressed intent to invest time and effort
towards constrained supply chain planning ( 49 percent) to simulate different
scenarios based on predictive modeling approaches ( 50 percent) and the abil-
ity to design risk management into the system ( 42 percent).
• Outsourcing is creating new supply chain dynamics—time and speed are
critical. Thirty-seven percent of respondents indicate that they are making
major updates to forecast at a frequency of less than a month, and 80 percent
indicate they are making major updates to forecast at a frequency less than or
equal to a month. Forty-seven percent of respondents indicate that they are
making major updates to supply plans at a frequency less than a month and 77
percent of respondents indicate they are making major updates to supply plans
at a frequency less than or equal to a month.
T
The Outlook
Clearly, companies without someone in the chief supply chain officer seat are
at a disadvantage. They should reconsider their current thinking and explore
adding a CSCO (or similar role).
