Managing new age operations

In the contemporary world characterised by frequent disruptions in technology and business models, it is imperative that organisations evolve new practices to manage their operations and stay relevant to their consumers.

Let’s look at the emerging trends at the consumer level. Consumers are getting more demanding with the plethora of options and their need for instant gratification. Their purchases are getting more unpredictable in terms of product basket, timing and choice of retail channel. At the same time, most of their seemingly untenable demands are actually met by start-ups through innovations in their business model.

Such magnitude of change in consumer expectations has serious implications in the way manufacturers manage their operations. Contemporary knowledge and practices are fast becoming obsolete. However, the underlying principles and concepts behind them still remain valid. It is imperative that we build new practices leveraging these basic principles and respecting the emerging consumer trends.

If we look at some of the bedrocks of contemporary practices like forecasting, S&OP, planning optimisation, vendor managed inventory - these are no longer sufficient to run an effective supply chain network. Time has come to reimagine operations. We must go back to the drawing board and redesign the full gamut of operations from vendors to customers, keeping it contextual and specific to the organisation. There is no one-solution-fits-all.

The design must be consumer centric and should focus on maximising customer order fulfilment. In my experience, optimising for cost almost always leads to a sub-optimal solution compromising on certain critical customer needs.

I would recommend maximising three important parameters:

1.First and foremost is the flow of value from manufacturer to consumers. If there are any impediments, either manifested or hidden, which result in loss of value, we should identify the root cause and eliminate them.

2.The second one is to improve flexibility in each leg of the supply chain like planning, procurement, manufacturing and distribution, across all the channel partners involved.

3.The third one is fast response across the entire chain. In case of sudden acceleration or deceleration of demand, it is important that all the partners respond in a concurrent rather than sequential manner. New technologies like IOT, drones, robotics, computer vision and additive manufacturing come in pretty handy in solving some of the response issues.

I’ll delve deeper on these suggestions in my next post.