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Interview

5 Minutes With… Paul Clifford, Sage UKI X3

In the latest instalment of our supply chain executive interview series, we spoke to Paul Clifford, Head of Professional Services at Sage UKI X3, about his company, industry opportunities, the challenges of COVID-19 and the impact of news technology…

 Questions

Tell us about your company, products and services.

I manage the Medium Segment X3 Professional Services team at Sage. We specialise in implementation projects of X3 ERP for customers and providing Centre of Excellence Services to our business partners.

What have been the biggest challenges the Supply Chain industry has faced in light of the Covid-19 Pandemic?

The industry has faced challenges that could never have planned for, some stockrooms and distribution centres have been closed so alternative shipping arrangements had to be put in place at short notice with restricted transport options.  Other businesses have had contingency plans for problems in a hub or a region but no one anticipated a full global impact including transport.  Finally factor in the surge in consumer demand and reduced manpower and the industry have had some unprecedented challenges to solve with no rehearsals.  At Sage we have provided support to our customers to amend configurations to help them over come some of their challenges.

And what have been the biggest opportunities?

Optimised stock holdings and optimising replenishment with just in time purchasing of raw materials and manufacturing.

What is the biggest priority for the Supply Chain industry in 2020?

Resilience, efficiency and flexibility!

What are the main trends you are expecting to see in the market in 2020?

There will be a bigger focus on authenticity of product, traceability and systems driving temporary legislation such as social distancing regulations enforced.

What technology is going to have the biggest impact on the market this year?

Collaborative technologies that help authenticate traceability and authenticity of products such as blockchain.

In 2023 we’ll all be talking about…?

How we have prevented the supply chain challenges we hand in 2020!

Which person in, or associated with, the Supply Chain industry would you most like to meet?

Eddie Stobart – the founder, they turned a distribution brand into a household name.

What’s the most surprising thing you’ve learnt about the Supply Chain sector?

The complexity of getting food from source to consumers dinner tables.

You go to the bar at the Total Supply Chain Summit – what’s your tipple of choice?

A local real ale.  There are so many to choose from and they are all different.

What’s the most exciting thing about your job?

Meeting people from different businesses and helping them solve their problems.

And what’s the most challenging?

Switching off when on holiday.

Peaky Blinders or Stranger Things?

Peaky Blinders if I am forced to choose! 

Q&A: Reimagining the supply chain post-COVID-19

Patrick C. Penfield (pictured) is Professor of Practice – Supply Chain Management and Director of Executive Education at the Whitman School of Management, Syracuse University. He is a Certified Fellow in Production and Inventory Management (CFPIM) and Certified in Integrated Resource Management (CIRM). Penfield has over 15 years of industry experience in Supply Chain Management working for companies including Johnson & Johnson and Philips Electronics. He was recently interviewed by the folks from Sage about the impact of COVID-19 on the supply chain – here is what he had to say…

Sage: What has COVID-19 taught the supply chain industry?

Prof. Penfield: Above all, we have begun to understand the vulnerability of the global supply chain. The reason for that is threefold:

  • We were unprepared for this particular situation
  • The requirements on supply chains are changing daily
  • Those changes are not universal; they depend on the sector, consumer sentiment etc.

I’ve been in supply chain management for 15 years and academia a further 17 years, and I can honestly say that here in the US, we’re very good at it: we’re nimble, agile and capable; and certainly the bigger companies can usually see trends rapidly enough to react. They want to be proactive, because supply chain efficiency is all about optimizing for customer demand. But COVID-19 caught everyone flat-footed. 

A further issue is government reaction. I don’t want to pick on any specific government; we could complain about China failing to disclose the severity of the disease, or all our governments for being either slow or ineffective to react. Equally, all the governments in the developed West have done an extraordinary job of pulling together resources where they can. So business has to recognize that they cannot always rely on government support being in the right place at the right time in the case of truly Black Swan events. 

Sage: How has business performed?

Prof. Penfield: We will rake over the coals of this event for years to come. For now, it’s too early for an academic analysis, but anecdotally our experiences and the stories we see in the press point to elements of both success and failure in the management of supply chains, again with the caveat that government interventions have influenced both.

In terms of realignment, we have seen some extraordinary pieces of work, where large companies have changed their operations almost overnight. From Walmart and Amazon to UK supermarkets like Tesco, the largest players have not just managed to keep the lights on, they have thrived. Many wholesalers in individual sectors have successfully developed direct-to-consumer offers where their retailers have shut down; again in a matter of days.

Here in the US, though, even in food sectors, we have seen some dramatic failures, too. We are throwing out milk, vegetables and fresh produce because the suppliers in these sectors have been accustomed to half of their product going to individuals and half to bulk purchases. The bulk purchases have stopped, but they have not been reactive enough to flip the switch and focus on individual purchases.

Sage: But moving to a consumer model is hard…

Prof. Penfield: Yes it is, but consumers are still there. That’s the key message: certainly there is a practical issue around packaging and branding, for example. But people do still want milk. Now, it’s true that Amazon has deeper pockets than a typical midsize manufacturer, but online shopping has been developing for the past fifteen years. Amazon, Walmart and the like are certainly pioneers, but both facing the consumer and facing back into the supply chain, digital tools are now available to simplify and optimize the supply chain across the board. In fact, a producer today faces a much lower cost to optimize their business than Amazon, which has invested for two decades to build these tools from scratch.

Where suppliers have fallen short is that they have allowed Amazon to capture their markets – indeed that was often true even before COVID-19. Many commentators suggest that the key output of the current crisis will be a rapid deterioration in the state of retail. I would agree with that possibility, but there is a more optimistic view: smart producers and businesses further up the supply chain will realise the value of investing in online channels. That means not only selling direct to consumers but also optimizing upward supply chains for flexibility when dealing with manufacturers and farms.

Sage: OK, but not everybody wants to become an online retailer, or indeed compete with Amazon…

Prof. Penfield: Indeed so. This brings us to dual sourcing. Perhaps the greatest lesson for supply chain professionals here is that we have focused so exclusively on leanness that it has made us blind to the importance of resilience. 

I believe wholeheartedly in global trade and global supply chains. Globalism is better for business than protectionism and global trade fundamentally makes the world a better place; for businesses, consumers and whole economies. But supply chain experts then also must keep their eyes open to the world in which they find themselves. 

The painful truth is that the pandemic was not completely without warning to the rest of the world. In February, China used significantly less energy than the same time the previous year. Also in February, the port at Long Beach in Los Angeles saw a significant reduction in the number of container vessels coming from China. There were signs of trouble ahead.

Larger businesses – and the smaller ones who partner with them, if communication was strong enough – could and should have noticed problems on the horizon. More importantly, they should have had a Plan B for alternative sourcing from other parts of the world. 

I think that in a restructured vision of commercial supply chains, we will see many more businesses shoulder the cost of secondary channels, rather than putting all their eggs in one basket. And whilst China has traditionally been the least-cost supplier of choice such that this crisis really emphasizes the issue, I’m not specifically beating up on China – economic, geopolitical and social problems can develop anywhere. It’s crucial that businesses can flex to alternative sources.

Sage: Hindsight is a wonderful thing! What is the path to a ‘new normal’ for distribution, logistics and the supply chain?

Prof. Penfield: We are a step away from a conversation about the new normal. We know that governments want and need the economy to return to some semblance of normality, and they will encourage businesses to work out their operational needs. Right now, companies are wrestling with the day-to-day challenge of how to protect employees when they come into work, particularly: 

  • the availability of personal protective equipment (PPE)
  • how to organize for social distancing where people might have previously operated in close confines
  • and how to create a testing regime when tests become widely available.

These can be particularly challenging in labour-intensive parts of manufacturing and logistics, from food production to warehousing and distribution. 

Only then will companies be able to raise their eyes towards the long-term, but where I am optimistic is that businesses will naturally aim to flex, initially for survival, but ultimately to find opportunity. That will include:

  • Working from home for a large number of employees, many of whom (although by no means universally) are finding personal benefit in the change, too.
  • As we discussed earlier, omni-channel retail; which means both traditional retailers embracing digital and wholesale/supplier organisations joining the direct-to-consumer market.
  • A significant restructuring of business, particularly to focus on core activities, with a shorter timeline of strategic visibility and less speculative activity.

Less positively, as a globalist, I think we will see new types of protectionism, often driven by political sentiment rather than the facts, which will shorten supply chains; for example some countries will want to protect their food sources by growing more at home. This will mean changes for logistics business in the medium term. 

Travel will take several years to return to 2019 levels. My area, academia, will certainly suffer as a result, as many colleges both here and in the UK attract a global cohort of students; but more subtly, changes to air travel will also affect global supply chains. When we travel less, we do fewer deals and operate closer to home. Furthermore, most people don’t know that passenger planes carry plenty of cargo, too; so the inevitable reduction in passenger flights will take its toll on commercial cargo.

We also need to realise that the base costs of transportation and logistics are going to go up. That may be mitigated by new efficiencies, but again, it will mean change and disruption. 

These are just a few of the effects. Every business should be re-examining its supply chain, truly understanding it – because supply chains are granular and intricate; testing for vulnerabilities and understanding the impacts.

Sage: And what about the long term?

Prof. Penfield: Our industry is changing. The prognosis had always been that we would see automation truly have an impact on logistics by around 2030; and major players in the space have been moving down the automation, AI and robotics paths for a decade or so.

Now, when you have a situation where people are not permitted into a workplace, that will inevitably turn minds to the value of automation. Automation ceases to be a way to shave a few percentage points off operational costs, it becomes a financial imperative, either to keep the business going, or to shore up competitiveness. And one of the big arguments against automation; that the cost of deployment is greater, at least in the short term, than paying employees, falls out of the equation.

I therefore think that supply chain professionals will look back in a couple of years and see COVID-19 as a clear stimulus for the acceleration of automation in logistics. Add to that the rapid improvement of capability in autonomous vehicles and I think logistics will look different in five years, not 20.

There is unquestionably a societal cost there. It will cost jobs, but if I can say one consistently positive thing, it is that supply chains are populated by problem solvers. We have the world’s most flexible and opportunistic people. We will get through COVID-19 as we have got through every other shock to the system. 

I hope that we don’t lose our global outlook because that would be a real shame. But as an industry, I am hopeful: disruption teaches us lessons, and those lessons – dual sourcing, inventory flexibility etc. – will feed strategies for everyone moving forward.

5 Minutes With… Les Brookes, Oliver Wight

In the latest instalment of our supply chain industry executive interview series we spoke to Oliver Wight EAME CEO Les Brookes about his company, industry opportunities, the challenges presented by COVID-19 and the importance of data for running business scenarios…

Tell us about your company, products, and services.

Oliver Wight are a global organisation that works with businesses to improve their planning capabilities, enable end to end supply chain integration, shape demand, and alter the mindset of business leaders to unlock a whole new, improved way of working. And what follows is outstanding results. We are the originators of Sales & Operations Planning and industry thought leaders for Integrated Business Planning. Our philosophy is based on finding the sweet spot between process, people, and tools to enable business sustainability and success.

What really sets us apart as a business is that each of the Oliver Wight Partners who deliver education to clients, understand that client’s ambitions, challenges, and concerns because they were, themselves, once a client of Oliver Wight. They have all held senior positions in a variety of industries so understand the necessary steps businesses need to take in order to succeed. 

What have been the biggest challenges the supply chain industry has faced over the past 12 months?

Of course it’s easy to talk about the current COVID-19 related challenges and the need to re-evaluate the source of supply etc, but I would say the biggest challenge (and where the biggest opportunity lies) is gaining true end to end visibility and management of the supply chain. 

And what have been the biggest opportunities?

The opportunity could also be seen as a company threat, for example if we don’t take the opportunity to plan and manage the end to end supply chain it is likely that our costs will be higher than those of our competitors. The opportunity is in delivering the lowest cost throughout the entire supply chain – not just for what we own.

What is the biggest priority for the supply chain industry in 2020?

The integration with demand, based on the levels of volatility that we are going to continue to see and being able to run and execute multiple scenarios. 

What are the main trends you are expecting to see in the market in 2020?

I would expect organisations to re-evaluate how they are able to be flexible and agile whilst also understanding how they can adapt their process to fit the current levels of volatility. For example, how to use DDMRP – that was designed for use in a steadier state – to manage increased levels of fluctuating demand.

What technology is going to have the biggest impact on the market this year?

I think that organisations will want to extract data to run business scenarios, plan the end to end supply chain for all partners, and extract data for Integrated Business Planning. So it’s likely that new technology such as 09 or SAP IBP with its other modules will roll to the top.

In 2022 we will all be talking about…?

We will all be discussing the ongoing impact of COVID-19 re. the global recession, and hence we will be talking more about Integrated Business Planning’s capability to effectively plan and manage the integration of strategy and the latest bottom up plans.

Which person in, or associated with, the supply chain industry would you most like to meet?

I am always interested in meeting Supply Chain VPs but in this changing world I would also like to meet the Heads of Digital.

What is the most surprising thing you have learnt about the supply chain sector?

That there are still so many organisations that are average at planning albeit they have all the systems known to man. With this in mind I don’t actually think it’s the tools that are the issue.

You go to the bar at the Total Supply Chain Summit – what is your tipple of choice?

I tend to be a gin and tonic man, but since I work with some big clients in beers, spirits, and soft drinks I do feel I have to support their brands too! 

What is the most exciting thing about your job?

Working with people to realise improved performance that helps to deliver a competitive advantage.

And what is the most challenging?

Typically the most challenging aspect of the job is getting people to change what they have always done so that they can realise the opportunities that exist.

What is the best piece of advice you have ever been given?

Failing is okay providing you learn from your mistakes. 

5 Minutes With… Jonathan Ogg, sofco

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?

Coors Light.

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.

5 Minutes With… Kevin Rogers, Elanders

In the latest instalment of our supply chain executive interview series, we sat down with Kevin Rogers, President of Global Sales at Elanders, to talk about the company’s offering, industry issues, market opportunities and Peaky Blinders…

Tell us about your company, products and services.

Elanders offers global integrated E2E solutions in supply chain management. We can take an overall responsibility for complex and global deliveries encompassing procurement, transportation, warehousing, configuration, production, pick/pack, e-fulfilment, distribution and reverse supply chain. Our offer also includes e-commerce services, order management, payment solutions and after sales services for our clients. Elanders’ business concept is to be a global, strategic and long-term partner to our customers, to help streamline and develop their business critical processes.

What have been the biggest challenges the Supply Chain industry has faced over the past 12 months?

Aside from the uncertainty of Brexit and the US/China trade war, I would say the rapid growth in e-commerce which requires more sophisticated supply chain solutions being driven by consumer behaviour.

And what have been the biggest opportunities?

e-commerce and the demand from the consumer side. More and more brands are working hard to keep up with the growth and demands in e-commerce. Each brand wants to create their own experience and the flexibility of Elanders is creating some fantastic opportunities for our clients and our business. This is also driving more innovation which is required to support brands develop an effective solution to satisfy their consumers.

What is the biggest priority for the Supply Chain industry in 2019?

From a UK perspective it has been preparing for Brexit, whatever that will look like. Globally it is solutions to optimize speed to market without increasing inventory.

What are the main trends you are expecting to see in the market in 2019?

Definitely more uncertainty about Brexit, increased pressure from the consumer side regarding lead-time and more cross border e-commerce.

What technology is going to have the biggest impact on the market this year?

Automation, automation & automation!

In 2022 we’ll all be talking about…?

Blockchain solutions.

Which person in, or associated with, the Supply Chain industry would you most like to meet?

Jeff Bezos.

What’s the most surprising thing you’ve learnt about the Supply Chain sector?

The many different demands from so many different clients.

You go to the bar at the Total Supply Chain Summit – what’s your tipple of choice?

Single Malt, an 18 year old Dalmore will do nicely 😊

What’s the most exciting thing about your job?

Discussing customer requirements, they’re all so different and technology is driving some exciting changes in the supply chain sector.

And what’s the most challenging?

For the UK it’s Brexit again and for some for our global business it’s the trade war.

What’s the best piece of advice you’ve ever been given?

Never stand still, keep innovating and embrace change.

Peaky Blinders or Stranger Things?

Without hesitation it’s Peaky Blinders.

5 MINUTES WITH… Philip Lavin, Development Consultant IT for Axit (a Siemens Company)

AXIT’s Development Consultant IT discusses Brexit, Digitalization, AI, Big Data, tardiness and more…

Tell us about your company, products and services.

AXIT are a wholly owned company of Siemens Postal Parcel Airport Logistics. We offer a Visibility and Collaboration solution used by some of the largest 3PLs in Europe, as well as being the platform of choice for many global manufacturing corporates.  Our USP is the simplicity and ease in collaborating with numerous disparate systems in global supply chains achieved by embracing digitalization and realizing true visibility. This is a cloud solution and is supported by the experience and know-how of Siemens, leveraging their engineering, IT and global infrastructure.

What have been the biggest challenges the supply chain sector has faced over the past 12 months?

Brexit is obviously a real concern. Supply chain security, Compliance and Customs expectations are all huge challenges which have created serious concerns for SME’s and global corporates.  Security and particularly AEO applications are processes that benefit greatly from Collaboration and Digitalisation  of all parties in the supply chain.

And what have been the biggest opportunities?

Enabling companies to actively join the ‘digital world’ by mapping and joining functions and systems as one.  This speeds up results and reduces costs in terms of time, labour, investment and shareholder value.

What is the biggest priority for the supply chain sector in 2018?

Digitalisation.

What are the main trends you are expecting to see in the market in 2018?

Increasing ‘Brexit’ solutions.

What technology is going to have the biggest impact on the market this year?

From Siemens point, without a doubt, Mindsphere.

In 2020 we’ll all be talking about…?

AI, Big Data, Digitalisation 

What’s the most surprising thing you’ve learnt about the sector?

Its never ending evolution.

What’s the most exciting thing about your job?

The people I meet and the solutions they want.

And what’s the most challenging?

Timescales.

What’s the best piece of advice you’ve ever been given?

Early is on time. On time is late. Late is unacceptable.