Part 2 – A New Supply Chain Planning Paradigm for the Digital Value Network?

In Part 1, I introduced the 3-D Cycle that integrates the 3 dimensions of orchestrating a value network.  In this post, I’ll define the 3-D Cycle in more detail.  Later, in Part 3, I’ll explore the some of the challenges and industry imperatives, drawing on some examples from retail (thought I’d pick one of the more challenging industries).  Finally, in Part 4, I’ll explore what the 3-D Cycle looks like in terms of specific examples and architecture.

Detect, Diagnose, Direct

The work of managing the value network has always been to make the best plan, monitor issues, and respond effectively and efficiently.  However, since reality begins to diverge almost immediately from even the best plans, perhaps the most vital challenges in orchestrating a value network are monitoring and responding.

 

In fact, every plan is really just a response to the latest challenges and their causes.

 

So, if we focus on monitoring and responding, we are covering all the bases of what planners and executives do all day . . . every day.

 

Monitoring involves detecting and diagnosing those issues which require a response.  Responding is really directing the next best action.  That’s why we can think in terms of the “Detect, Diagnose, Direct Cycle”:

 

  1. Detect (and/or anticipate) market requirements and the challenges in meeting them
  2. Diagnose the causes of the challenges, both incidental and systemic
  3. Direct the next best action within the constraints of time and cost

 

The 3-D Cycle used to take a month, in cases where it was even possible.  Digitization – increased computing power, more analytical software, the availability of data – has made it possible in a week.  Routine, narrowly defined, short-term changes are now addressed even more quickly under a steady state – and a lot of controlled automation is not only possible in this case, but obligatory through robotic process automation (RPA).  However, no business remains in a steady state, and changes from that state require critical decisions which add or destroy significant value.   

 

You will need to excel at managing and accelerating the 3-D Cycle, if you want to win in digital economy.

 

There is no industry where mastering this Cycle is more challenging than in retail, but the principles apply across most industries.

Thanks for stopping by.  Next up is Part 3.  I’ll leave you with this thought from Cicero to ponder:

 

A thankful heart is not only the greatest virtue, but the parent of all other virtues.

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About Arnold Mark Wells
Industry, software, and consulting background. I help companies do the things about which I write. If you think it might make sense to explore one of these topics for your organization, I would be delighted to hear from you. I am currently employed by AVATA, but I am solely responsible for the content in Supply Chain Action.

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