In the latest instalment of our supply chain executive interview series, we sat down with Jonathan Ogg, Senior Solution Architect at sofco, to talk about his company, industry opportunities, challenges, new technology and Breaking Bad…
Tell us about your company, products and services.
sofco is a leading provider of integrated and collaborative End-to-End Planning Solutions for the Consumer Goods and Manufacturing sectors. The applications cover planning, intelligence and execution, and support strategic business processes including Sales & Operations Planning, Trade Promotion Management, Supply Planning, Production Planning and Scheduling.
sofco serves leading global organisations including many household brands, providing an End-to-End Planning and Supply Chain Visibility solution which fully supports ‘Operational Analytics’ including ‘What If’ scenario-based planning and supply chain financial view. Our customers have seen significant benefits from reduction in inventory, reduction in stock-outs for fast-moving goods, increased product availability and a reduction in working capital.
What have been the biggest challenges the Supply Chain industry has faced over the past 12 months?
The challenges in themselves seem to be in the same areas as previous years such as Volatility of Demand, Customer Service, Inventory Levels, Production Efficiency, Obsolescence, Driving Costs Down, reducing Lead Times, shorter Product Life Cycles, more Consumer Choice/Customisation options. So, the challenges appear to be the same but the difficulty in achieving them increases as the gap between “Feasible and Optimal” narrows because of achievements already made.
The focus on these different challenges of course varies by industry sector. For example, sofco do a lot of work with Food Manufacturers who supply products with short shelf life. As consumers demand longer shelf life on products, the retailers respond by demanding greater “Minimum Life on Receipt” from the Manufacturer, therefore reducing the flexibility of holding stock. Stock can buffer against demand volatility whilst maintaining service levels and not increasing costs in a highly competitive environment. Whilst reduced stock is no bad thing, it can drive smaller production batches and more frequent manufacture, which can increase product changeovers and required “Clean Downs”, meaning less productive time. Given that demand volatility remains the focus is on the accuracy of Demand Planning and flexibility of the Supply Chain.
And what have been the biggest opportunities?
Given the challenges an area of significant opportunity remains, collaboration, particularly between organisations. Many sofco customers have Demand Planning processes that are collaborative in relation to functions within the organisation with the critical relationship being between Planning and Commercial/Account Management. Information sharing between Customer/Supplier is also a common place, but this is not necessarily Collaborative if it does not result in the alignment of Supply Chains. There is still opportunity here.
In the area of End to End Supply Chain Planning software we are still coming across numerous organisations with fragmented and primarily Excel based Planning Systems that rely on significant manual intervention. This can be exacerbated with underlying data absence/quality problems along with related process and collaboration issues. All the previously mentioned challenges still exist which means the opportunity gap can be larger and therefore so can the benefits, although some of this can be catch-up.
We are also finding that the way organisations plan their Supply Chain is changing, this can be because of sales growth/decline, companies being bought/sold and therefore processes/systems changing and business models changing e.g. in house manufacture rather than outsourcing. As a result, they need flexibility in their Supply Chain Planning systems to adapt to the changes with limited business and IT involvement. Without this they can be left with Planning Systems that are not fit for purpose. Therefore, quick and simple remodelling are key to ensuring that Planning Systems are consistently aligned to both the business model and that they are addressing the current and future challenges described previously
What is the biggest priority for the Supply Chain industry in 2020?
This is different for different sectors/organisations but can be summarised in the following Groupings:
- Catch Up on process and systems best practice to avoid falling behind
- Flexibility and agility as change is here to stay
- Keep looking for and implementing “Wins” in areas that impact Customer Service and costs
What are the main trends you are expecting to see in the market in 2020?
From a systems perspective we expect to see a continuation in Organisations looking to make a step change in their Planning Systems where they are heavily reliant on individual skills and Excel. We also expect a continuation in the remodelling of systems and process to match the changing business environments. Companies will want to do this more but incur less time and cost in doing so, both to ensure they don’t fall back, but also to take advantage of new opportunities.
A continued focus on addressing the challenges previously mentioned.
What technology is going to have the biggest impact on the market in the near future?
Over recent years a lot of the technology changes have been in relation to the delivery of the Planning System to the user e.g. Cloud based systems. One of the current technologies being focused on is Machine Learning. Here, the potential is to impact the quality of the Plan because there are all kinds of factors that can be subject to this technology. The obvious one is Demand Planning. However, there are many things in Supply Planning that are currently set/managed by Planners where Machine Learning could drive improvements e.g. What throughput rates should we use for Production Planning, is there a better frequency of manufacture? Which is the best routing? What is the best lot size? How many people do we really need, and what is the best use of them, where should we invest in extra capacity? Many of these questions are answered by Planning systems but the input data is usually static coming from ERP systems, and reliant on people updating this static data. If it was dynamically updated in line with reality then opportunities for learning and better systemised decision-making increase.
In 2023 we’ll all be talking about…?
Machine Learning, because for this to come into everyday use it requires a lot of Software Vendors and Businesses to go on a journey together.
Certain businesses still have challenges with structural data e.g. accurate and up to date Routings/BOM’s and Planning Rules. For machines to learn they need good quality data to do this and the timely and accurate provision of this data will be key to the success of machine learning. The base data will be different as it will need the input required to make systemised choices instead of people creating the data e.g. this is the best way to make this product. This change will take time to deploy and part of the process will be users understanding how the system has derived the Plan, as Planners quite rightly only let the system take over when they both understand its decision making process and have confidence that the results are of the best quality. Our experience with complex Cost Optimisation Projects tells us that this does not happen overnight and changes in systems, process and mind set are required in achieving these goals. There is much to be done to turn this into an everyday reality in the Supply Chain.
Which person in, or associated with, the Supply Chain industry would you most like to meet?
The Supply Chain Director of Lidl or Aldi.
What’s the most surprising thing you’ve learnt about the Supply Chain sector?
The gap between what people talk about as being their ideal operation and what often happens in reality on the ground. This is where sofco can help most, closing that gap to get our customers closer to where they want to be.
You go to the bar at the Total Supply Chain Summit – what’s your tipple of choice?
What’s the most exciting thing about your job?
Meeting a prospective new client, understanding their process and issues and presenting a sofco Solution which then goes on to be deployed and meet the project objectives. It is about seeing and deploying something that drives benefits for our client and generates income for sofco.
And what’s the most challenging?
Any software implementation requires commitment and it can be challenging getting everyone to move forward at the same pace. We do this for a living, but our customers have businesses to run and their own challenges to face. Building in appropriate levels of contingency and managing everyone’s expectations and involvement is absolutely key to success.
What’s the best piece of advice you’ve ever been given?
Listen more than talk, and see the world through the eyes of who you are talking to.
Peaky Blinders or Stranger Things?
Neither – Breaking Bad.