Especially in the high-tech electronics sector, the supply chain is gaining in complexity and breadth even as technologies evolve to help automate many critical supply chain processes. More than ever before, OEMs need to evaluate their supply chain in relation to evolving technology in order to capture and maintain competitive advantage.
We sat down with Akhil Oltikar, co-founder and CEO of Omnics, which makes supply chain planning solutions, to talk about the ins and outs of the shifting supply chain landscape. Oltikar, who has over 15 years of experience in supply chain planning and management, previously worked for Riverwood Solutions, which offers design and manufacturing services. Oltikar led over 50 major global supply chain strategy and implementation projects with $100M to $6B supply chains. He is a member of the Council for Supply Chain Management Professionals (CSCMP) and APICS.
EBN: Where would you say electronics and high-tech industry are on the adoption curve for digital supply chain planning?
Oltikar: I would say that the electronics and high-tech industry are on the path to digitizing its operations and supply chain. They are not there yet. However, the transformation journey has begun. It will only accelerate from here on. Compared to some other industries like healthcare or construction, electronics and high-tech are way ahead on this path. Digitization of supply chains enables automation in supply chain planning. We see greater adoption of technology in the sectors where data is more accessible. Advanced real-time solutions are making better, faster decisions that improve supply chain performance.
EBN: What do you see as the biggest issues facing supply chain executives today?
Supply chain executives have always faced challenges; they do today and will in the future. It is such a dynamic field, which makes it wickedly complex but fun to work in. There are several core issues faced by supply chain executives, one of which is availability of talent/workforce in this space. This issue will only exacerbate going forward unless companies, academia and the supply chain community invests in grooming, cultivating the next-generation supply chain practitioners.
I also think there’s an issue with supply chain technology that the executives must deal with. The problem is old, but it requires new thinking. Software is not the end but means to an end. The market is flooded with solutions and it becomes very difficult to separate the needs vs. wants and no solutions offers a full set of capabilities to meet business requirements. Lastly, I think one of the biggest issues we’re facing is ’shifting supply chains’ whether driven by economic, politics or natural demand-supply shifts. Executives need to be proactive and look forward, tweaking the supply chains to minimize disruptions to their supply chains.
EBN: What advice would you give organizations who want to invest in supply chain planning in terms of people/process/products?
Oltikar: The question has the answer – People + Process + Products, or rather Technology. My advice to organizations is to start by setting up a team with right skills in supply chain planning. This could be a mix of visionary thinkers, data gurus, operations/supply chain practitioners and strong forward-looking leadership. That’s the people payer, then comes the process layer which is crucial for any successful planning team. As supply chains shift and businesses evolve, the underlying processes should be adaptable and agile to manage such shifts in operations. Lastly, the technology layer that is used to make faster, ‘smarter’ planning should fit the business process on-hand and not vice versa.
The technology or product that enables the people and process should make them efficient and effective. Technology should bear the load of repetitive work, data chasing and crunching while the team focuses on decision making from the insights derived. One of the most common challenges that I’ve seen is the use of spreadsheet in supply chain planning. The spreadsheet planning scenario becomes exponentially complicated and unwieldy as days, weeks and months go by and ‘urgent’ firefighting tasks take priority over ‘important’ planning. Make it a priority to fix it before your spreadsheet planning implodes. Put together a ‘tiger team’ with domain expertise in planning along with senior operational leaders and work together to get the right result for your business.
EBN: How can supply chain pros sell this type of initiative to the C-suite? (Since they are having to choose between many competing technologies and facing limited budgets.)
Oltikar: There needs to be a fundamental shift in the business model that has been prevalent in the industry over past several decades. We need to incentivize for value added delivery rather than just software delivery. We also need to avoid ‘one size fits all’ approach. No two supply chains are the same and thus plug-n-play or out-of-box software in supply chain planning won’t work. You cannot fit a generic software to a specific supply chain planning process, and trying to fit the problem to the available solution doesn’t make sense. Implement a 'focused' planning solution that works with your underlying transactional systems. Not vice-versa. And remember that software is not the end goal, it is the means to an end!
Implementation of planning solutions is unlike others due to the complexity of the problem at hand. This problem is exacerbated because planning is cross-functional, cross-border and cross-organizations so ‘think big, act small’. The implementation can be managed through a ‘minimum viable product’ approach. Do not try to automate everything from the start or fall into the classic ‘death by features/functionality' trap. Breakdown the process map to identify key areas that would provide immediate results to make the life of your planning team easy without making this a year (or two) long process. Remember, solutions need to be agile and adaptable to changing business conditions and processes.
EBN: What can organizations do to identify some of the low hanging fruit of implementing supply chain planning?
Oltikar: Look at the speed and efficiency of your planning team. Are they spending long hours and weekend crunching numbers so that they can churn out the next plan and, in the process, have minor improvements? If so, they need help to automate the process so that they can spend most of their time making decisions, playing what-ifs with the outputs rather than data collection and crunching.
How is your data managed? If spreadsheets are the primary tool then you are losing more than 90% of the data once a planning run is completed. This is data gold and should be captured and used in predictive analytics.
Supply chain planning should be continuous. Long gone are the days of going through the planning cycle once a month or once every two months. The planning should be at the speed of the business. This means the data inputs and outputs must be close to real-time.
EBN: What measurable key performance indexes (KPIs) should organizations track to understand whether they are successful?
Oltikar: An important KPI is planning team efficiency. How many hours do you save going from spreadsheet planning to automated planning? We have seen more than 20X improvement in this area making your planning team efficient and effective. Another is inventory improvements. We typically see 15% to 35% improvement. Other KPIs are landed product costs due to flow optimization, supply chain responsiveness, and customer service level improvement, leading to higher customer satisfaction.
EBN: What are the biggest changes you see on the horizon for the supply chain industry in the next five years?
Oltikar: Talent is huge! A McKinsey Global Survey of more than 900 C-level executives found that talent shortages top the list of challenges companies face in meeting their strategic digital aspirations. I frequently get requests asking if I know someone that could fill a gap in supply chain spanning from execution to strategic planning.
Data is also huge! We have an unprecedented data deluge and we need better, smarter tools to manage “glocalization” of supply chain. Glocalization is a term used for global supply chains meeting local requirements. This drives the need for speed and customization while managing costs and assets to deliver the products.
— Hailey Lynne McKeefry, Editor in Chief, EBN