Boxer Mike Tyson famously said, “Everyone has a plan until they get punched in the mouth.” Everyone has a great supply chain plan as well – until exceptions and disruptions occur. Then you’re forced to either modify the plan or come up with a new one. That’s easier said than done, of course, because historically, there’s been a disconnect between supply chain planning and execution. What are the main hurdles companies face in overcoming this disconnect? Why is breaking down these functional silos so important? And how are advancements in technology helping?
Those are some of the key questions I discussed with Janice Lucas, Sr. Director, Supply Chain at Badcock Home Furniture &more, and Vijay Natarajan, VP, Business Consulting, Supply Chain Execution at Kinaxis, on a recent episode of Talking Logistics.
Badcock Home Furniture
For readers not familiar with Badcock Home Furniture, it is a home furnishing retailer with about 380 franchised stores across eight states in the Southeast. Janice notes that the company is unique in that it owns all the inventory in the franchised stores which it delivers with its own fleet of trucks. She explains that her job is to get the products from suppliers into their distribution centers and from there to the stores.
“It’s more than just planning,” Janice says. “It’s planning, logistics, distribution and fleet.”
Challenges of Inbound Logistics
One of the challenges Badcock faces is that many of its products are made overseas where the order, manufacture, shipment process takes months to complete. “Unfortunately, what many people know about supply chain is that planning cuts a purchase order, it goes to the factory, the factory makes the item, it gets on a boat, and it comes here,” says Janice. “They don’t realize the intricacies and the months that it takes for all of that to happen.” She elaborates further in the short clip below:
The domestic supply chain also has its own challenges and complexities, which Janice describes as well.
The bottom line, “this is where you have to manage that disconnect [between planning and execution], manage that business partner and education them about all the complexities involved,” says Janice.
The Planning – Execution Disconnect
What are the main hurdles companies face in overcoming this planning-execution disconnect?
Vijay explains that the problem is that planning traditionally focuses on the longer-term questions about what and how much to make/order and where, while execution deals with the immediate challenges of managing orders, working with freight forwarders and logistics service providers, managing the flow of goods, and so on. He notes that the demand and supply disruptions caused by the Covid pandemic forced companies to consider the advantages of bringing planning and execution together.
Another challenge is the fragmented nature of the execution landscape itself, as Vijay explains in the short clip below:
With all these parties operating in silos, each with their own disparate systems, “this further complicates bringing planning and execution together.”
Breaking Down the Silos
Janice says, “The most important part in bringing planning and execution together is your people. Our planning team is down the hall from our logistics team. We are team players. We communicate with each other, we meet every day to discuss what’s happening, what issues are out there that both planning and execution should be aware of. In order to communicate you need systems that provide you with accurate information. Kinaxis gives us live, accurate information to tell us ‘Here’s what’s coming, here’s when it will get here.’”
As an example, Janice mentioned the current delays at the Panama Canal due to the drought situation, which is what their teams discussed in a recent meeting:
Another aspect of collaboration is metrics. Janice comments that although they have a common cross-functional metric of “Available for Sale” they also have many metrics specific to their unique parts of the supply chain. “You can have all the data in the world [that feed the metrics], but you need people who can understand what the data is telling you,” she says. “That’s what’s great about Kinaxis. They have people there who can help you understand the system and how to learn from it. You need the system and you need the people to interpret what the system shows.”
Bridging Planning and Execution with Technology
Many of the technology issues that hindered collaboration between planning and execution in the past – such as disparate in-house systems and protocols – have been alleviated by advancements in technology such as cloud computing and APIs. How are these innovations helping to bridge the gap between planning and execution? What advice do Janice and Vijay have for those beginning this journey? I encourage you to watch the full episode for all their insights and advice on those questions and more. Then keep the conversation going by posting a comment and sharing your perspective on this topic.
