Supply chain management: Remember the three-point stance

A friend of mine who is the CEO of a medical device manufacturer in Vermont, tells a story about sitting at a conference with one of the Pittsburgh Steelers coaches. Two a days were about to get underway and he asked what was the first thing the pros would work on at practice. “The three point stance,” the coach said. “We always go back to the basics.”

If you've walked through a highly-automated distribution center, visited a factory of the future, or looked at a real-time display of all the transportation assets on the highway at a trucking company, you know that what we do in the plant, DC, or on the road is changing before our eyes. Automation is everywhere. Add to that a whole new world of collaborative software and concepts like digital business, and its no wonder that most professionals' heads are spinning. But the basics – the three-point stance of supply chain management – are still fundamental. That was one of the takeaways from conversations I had at last week's Gartner supply chain conference in Phoenix. I wasn't alone.

“Our customers hear about these new concepts and technologies, and they're asking: What does that mean for us,” Prashant Bhatia, a software industry veteran and currently the vice president of product marketing for JDA, told me following a session. “I think we're all trying to figure it out.”

Bhatia was not alone. In many respects, the supply chain of the future was on display, both in the presentations from Gartner's analysts and at the booths of a number of the software vendors in the exhibition hall. It's sexy and exciting. At the same time, the fundamentals of forecasting and inventory management were also very much a part of the conversation. For instance, I sat through a presentation on collaboration by one executive that began with the confession that prior to this project, his company really didn't have good visibility into what was happening down at the SKU level. Or, as Justin Seifert, director of media relations for Logility, put it, “Companies are definitely trying to move up the supply chain maturity level, but I look at where are they spending their money: It's still the basics like demand planning and forecasting.”

I ran that idea past Bhatia, who agreed. He added that despite all the sophisticated bells and whistles available from JDA, the business in three-point stance applications like WMS was booming. Companies are realizing that they can't get to that next level of efficiency with a legacy supply chain execution system. “I was just in a presentation on WMS and the room was packed,” Bhatia told me. “I think the attendees realize that warehousing, transportation, and labor aren't going away. You still have to move goods.”

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