Given all the above uncertainty it is important to ensure timely, data driven decisions. These changes are always occurring to some extent; it just happens that they were accelerated during the Great Recession. Decision making is an important organizational process.
Unfortunately, complex organizational supply chain rationalization decisions are not made every day at most companies. Instead these decisions are made every few years with the assistance of a supply chain partner or consultant. These studies often look at the recent trends and factor in expected future growth to map out where demand was, is and is going.
Interestingly, as the amount of data available increases so does the complexity of formerly simple decisions. Supply chain strategy is evaluated every few years for this exact reason. Given the complexity around changes and the amount of data that can be put to any decision it is easy to fall into “analysis paralysis.”
Instead, the optimal method of evaluating the supply chain is to do it constantly and in a controlled environment. There is an emerging concept known as “agile strategy” which comes from the agile software development process. This process involves setting strategies for change, implementing and constantly testing changes, and evaluating the outcomes.
This methodology gives organizational supply chain teams an opportunity to make decisions within a controlled framework and gives executives a framework for understanding whether a decision makes sense within the business strategy. At all points decisions must be defensible and data driven but they should be constantly evaluated. This constant evaluation is the step which dramatically changes the process – it trains teams to look for the hidden costs and question everything.
Decision making is not a function that occurs on a calendar, it is a process that people and organizations do on a daily, hourly and ad hoc basis. Decisions never stop being made.
Marrying the concept of Agile Strategy to that of Business Intelligence creates a powerful foundation for active, on-going supply chain analysis. Given the growth of operational data, Business Intelligence provides a framework for managing the data and using it in manageable ways. Aligning a business intelligence view with the data analysis methodologies of agile strategy creates the ultimate methodology for allowing internal teams to actively monitor supply chain alignment with reality.
When there is a separation between operational execution, data analysis and strategy a tension is created. This tension can lead to a misunderstanding of which trends in the data reflect real issues and which indicate only coincidental occurrences. True analysis comes by giving tools and training to those that are actively involved in the running of the operation and then incentivizing them to identify improvement opportunities. From this a functional strategy can be implemented.