Adaptive SCM [17] presupposes the activation of close collaborative relationships between channel members, the application of connective technologies that not only provide data concerning demand and supply events, but also merge intelligence, planning, and execution of plans, and a common goal to provide the customer with an exceptional buying experience that welds them to a product and a delivery channel. Regardless of whether they are purely transaction-based with minimal dependency on other channel players or organized into closely integrated partner networks, all agile supply channels must be willing to design, continuously improve, and execute channel processes and customer-facing values.
In contrast to these traditional methods of managing supply and delivery chan-nels, which depend on forecasting and inventory buffers, adaptive networks seek to counter demand variability by abandoning static plans in favor of mechanisms
that provide immediate feedback regarding the marketplace and the flexibility to quickly devise alternative plans that can be rapidly communicated to channel part-ners. As illustrated in Figure 4.6, adaptive networks possess information tools that permit them to sense changing conditions in the supply and demand channel when they occur. Illuminating potential or actual problems anywhere in the network requires technologies that quickly provide visibility to threats concurrently to all channel partners. Data is crunched to reveal potential troubles and then aggregated to disclose systemic patterns of variation and contributing factors. Awareness of variation and understanding of the level of potential risk is then driven by system alerts that provide detailed action messages to all network planners. Exception mes-saging supplies warnings on both tactical and strategic levels. Strategically, alerts may reveal emerging challenges that endanger the fundamental assumptions of the supply chain. Tactically, alerts may indicate that market conditions have altered the supply chain’s ability to execute originally planned courses of action.
Exception messages enable channel planners to assess the degree of required plan revision. For example, action to correct a tactical problem, such as an inventory short-age at a network supply node, would result in an emergency effort to relocate stocks
Channel network fabric
Execute Communicate
Respond Plan Alert Sense
Events Events
Technologies
Business objectives
Learn Collaborate
Network capabilities
Visibility
Adaptability Velocity
Level of variation
Figure 4.6 Components of adaptive SCM.
from other channel warehouses to the affected location. On the other hand, a major disruption at a critical supplier might require a fundamental revision of the entire supply chain strategy. The goal is to ensure that events occurring anywhere in the sup-ply network are visible to all participants so that effective analysis, ending in changes to the plan, can begin. Actually, the intensity of the resulting response is dependent on the information supplied by the live event. The simplest response may be correct-ing an out-of-balance process. A more complex response would involve replanncorrect-ing a local supply/delivery point in order to put the plan back on track. Finally, a significant disruptive event may require complete reformulation of the entire channel strategy.
In all cases, event data should be complete enough so that standard operating proce-dures and planning optimization tools can rapidly and accurately assess the resulting impact on performance of a fundamental change in plans.
Before a determined response can be executed, it is critical that possible solutions be communicated to affected supply network participants. The speed of response by channel partners to plan revision is driven by two factors: the level of exist-ing network collaboration and the availability of communications tools. The more integrated and collaborative channel relations the quicker alternative plans can be communicated and consensus reached. The actual message must be delivered via communications enablers that present data and analysis in a format and style that can be easily transposed into local planning and diagnostic dialects. Once solutions have been agreed upon, plan execution can follow. Disruptions can be handled by adjusting the standard channel process by applying an alternate solution to the prob-lem area and directing it back on track to the original plan. Incremental, focused event adaptation permits event obstacle resolution without adversely disturbing and destabilizing standard processes occurring at other network points. If the volume or magnitude of adaptive planning becomes too great over time, fundamental change to the overall supple network is probably warranted.
Motorola and adaptive supply chains
“Motorola wireless mobility solutions address some of the most challenging issues for the distribution supply chain:
thinning margins, shorter product lifecycles, accurate demand fore-casts, increased customer expectations, and a global economy. With motorola mobility solutions, you can count on real business value by synchronizing the many aspects of your supply chain and providing workers and managers with the tools and real-time informa-tion needed to improve business pro-cesses and create adaptive supply chain strategies to reduce costs and meet changing consumer demands.
Motorola mobility solutions create a tighter collaboration across the supply chain that results in a more agile, flexible supply chain capable of improving quality, reducing the cost of doing business and improving customer service and satisfaction levels for a real competitive advantage.”