The other week I had a call with Richard Powell, CEO of Crimson & Co, the global SCM consultancy. We started our conversation by looking at what was the Holy Grail in SCM. Powell felt that a contender for this title was the ability of suppliers to deliver to van on the road. Technology was now in place to enable such a van to be located through 3G phones. I followed up this point by talking about the new market review on the Mobile Supply Chain in which I had independently raised the issue of managing the inventory in a van.
Powell then talked about what Crimson see as the 3 parts of the Supply Chain; these parts being process, people and systems. Crimson see that there is currently a power struggle between these 3. Currently the hot area is having the right experienced people in place to make changes happen. The lack of experienced people causes restrictions on growth.
Powell and I went on to talk about the different approaches organisations were taking to manage the supply chain. He highlighted Amazon's approach where they use MSc students to configure their warehouse operations. These people analyse to death the processes. They have freedom to debunk SCM myths and ignore collective wisdom and use technology to gain efficiency and effectiveness.
Powell sees that there are 3 major changes in the SCM market over 2015. The first of these centres around "cost to serve" and "channels to market". This change means that the supply chain has become more complex to manage and is resulting in businesses needing to cope with multiple supply chains at the same time, all with different routes to market, service requirements and cost structure.
The second change is around capability development. Crimson have found through experience with their clients that although they have the processes and software in place to make the changes they haven't got the personnel in place to make it happen. This is now seen as a big blocker to make change happen. Crimson are using training programmes and their own experience to support their clients, but there are still square pegs in round holes! Powell sees that to tackle this issue is a big investment for organisations and that it is not an HR issue only - it needs to be run by the business, driven by the CEO.
The third change is the move to run businesses at a local level rather than from centre. The developed world has developed rapidly and the change is to empower the local organisation to manage the process in as uniform a way as possible but allowing for local subtleties to be taken into account. If you look at India and China as examples, they want locals in place to do the managing, as they understand better the language as well as local nuances, and they also believe that they have the skills within their own countries to make the changes happen. Therefore it is the local markets which are driving multinationals' supply chains.
Crimson & Co has gone through a rapid expansion since I last talked to Powell. They now have offices in Atlanta, Melbourne, Mumbai, São Paulo and Singapore to add to their starting point in London. The company provides consultancy across all supply chain functions from sourcing through manufacturing, planning and logistics to customer delivery. They help set the supply chain strategy at Board level and deliver operations improvements for blue chip businesses across the world.
One of their key deliverable is an improvement approach called scprime. This combines process and people capabilities to ensure that the right people are in the right jobs, consistently doing the right things. It is based on benchmarking, an objective assessment of capability and a toolkit of implementation techniques that defines supply chain excellence in terms that are meaningful to each specific organisation and ensures that improvements are sustainable. Crimson continually improve this as the Supply Chain evolves and it is currently in its 4th edition.