More than half of internal Supply Chain analytics centers of excellence do not survive beyond 3 years (U of Michigan and Llamasoft joint research, 2015)
Start with finding the purpose of the team
All strategic initiatives in the world of business should have a purpose. Some are intended to decrease cost, others are aimed at increasing revenue and/or capture more market share and likewise. The argument holds for establishing internal Supply Chain analytics capabilities as well. You need to carefully define some aspects even before you start thinking about establishing a team.
So how exactly do you find that purpose- the factors that propel the need for an internal analytics team focussed on Supply Chain ?
The Four step process
Step 1 : Map the Supply Chain challenges
At a very high level, this journey generally starts with corporate strategy but for this article, let us assume that all of those high level strategy (corporate, operations etc.) have already been defined. Your Supply Chain strategy is already aligned so major redesign needs to happen.
Given all this-why do you need an internal analytics team ? It’s simple- your Supply Chain is a process that has kinks and issues, like every other real world process. You want to establish a scientific approach to tackle these challenges. You want to have a proactive approach towards managing your Supply chain. You want to provide your operations team facts, figures and recommendations that will help them run a world class Supply Chain.
And to do all that, you need to get a good handle on what are your analytics requirements since it forms the foundation of the process of building a Supply Chain analytics team.
What tools can be used to capture Analytics requirements ?
The key aspect here is that you need to map your Supply Chain process in enough detail so that you can map the challenges at a high level. The process view of the Supply Chain is very useful for this exercise. You can use any tool of your choice-the tool I find most useful is a tool frequently used in Six Sigma, termed SIPOC.
A SIPOC diagram is a form of process mapping. Process mapping is a term used to describe the task of putting a project’s goals and, in some cases, detailed steps on how those goals will be accomplished. It’s a simple but effective method for ensuring every project team member – as well as executive leadership – are on the same page.
It also offers an overview of a project at a glance. In the case of SIPOC, the resulting diagram provides a high-level process map, the sort used by leadership to quickly explain a project and provide common reference points for all team members. It also can help identify problems and isolate areas that are not needed or add little value.
Elements of SIPOC
So, what do the five areas of the diagram include? Here are short explanations.
- Supplier – The provider of inputs into a process
- Input – Materials, information and other resources needed to complete a process
- Process – Structured steps used to convert inputs into outputs
- Outputs – Products or services resulting from the process
- Customer – Recipient of the outputs
Mapping SIPOC elements to a Supply Chain
Use SIPOC to map your key challenges
Let us use an example for a CPG company to understand the process. If you were to capture some of the key challenges, for each of the SIPOC process elements described above, the resulting SIPOC diagram will look like this:
In subsequent parts of this post, we will cover:
- How to define Analytics opportunities to tackle the challenges captured above
- Defining a Team structure and headcount