Supply Chain's Naughty or Nice List for 2013

As the year draws to a close, and our thoughts naturally wander to all things holiday-related, I can’t help but remember a child’s golden rules of Christmas, handed down from generation to generation. The most important rule is to do whatever it takes to stay on Santa’s good side: the proverbial “nice” list. Of course, this requires avoiding the kinds of things that could land you on the dreaded “naughty” list.

The holiday season—and with it, the fiscal year-end for many businesses out there—is such a critical time of year for product manufacturers, in particular. So, I thought I might share with you some of the things that I’ve learned from our customers that can help make your supply chain wishes come true.

Here is my supply chain version of the “naughty or nice” list—a reminder to us all that we’re in this together. And with a bit of focus and resourcefulness, the following insights might help to get your organization on the right list:

Truth, Half-Truths and Untruths

Telling the truth is sort of a no-brainer for the “nice” list. But if the typical company comes up short here with regard to their supply chain, it likely isn’t intentional. They simply lack a complete view (the whole truth) of their supply chain based on the latest available information.

With outsourced supply footprints and volatile demand conditions, today’s decisions depend on global, high-definition visibility. Too often, I see critical decisions being made based on out-of-date information, or by not incorporating the collective wisdom resident in the supply chain network. We all know the result of decisions based on incomplete or outdated information. Without timely information, it’s like Santa guiding the sleigh from where he has been—and not where he is going.

The good news? The batch-driven systems of yesteryear are being pushed aside in favor of cloud-based, real-time supply chain platforms empowering decision makers with reliable information. With business networks now connecting multiple tiers of suppliers, Santa can immediately tell who is actually naughty, nice, or simply out-of-stock.

Promise vs. Disappointment

Do your suppliers trust your forecasts? Do you trust your suppliers’ commit dates and quantities? A delivery the day after Christmas, or any commit date for that matter, isn’t acceptable to a child or a customer. So having visibility to know where their stuff is matters. Hitting a commitment is no longer a “nice-to-have.” It’s essential for customers. The challenge is ensuring you can make the date. A promise is a promise, right?

Executing in line with your promises determines whether the “holiday” actually happens for your customers around the world. It is a heavy responsibility because unlike that monopolistic supplier Santa, your customers can switch to another supplier with relative ease.

Successful fulfillment is a challenge under normal circumstances. Unexpected disruptions create even more uncertainty. Think of winter snowstorms, or tsunamis, or how to fulfill the huge upside of a smash hit new product launch. We like to think of success as a product leader as being able to “commit with confidence”—ensuring your customers get the service levels they expect, while allowing you to evaluate alternatives based on profitable tradeoffs on your own naughty or nice list.

We know supply chains are dynamic, and the ability to provide answers and alternatives is the difference between promises kept or the disappointment of a tree with no presents under it.

Giving vs. Getting

When thinking about the “giving” side of a supply chain, you might wonder whether your planning process is more command-driven or collaboration-driven. We often see companies attempting to dictate or micromanage their suppliers’ actions due to their inability to orchestrate supply chain processes between themselves and their partners beyond their four walls.

It comes down to this: Is there enough mutual trust to get to the right answers efficiently? When including your often multi-tier supply chain partners in decision-making, you need better answers faster, especially when working together to avoid delays. Another holiday lesson learned: the more partners participating collaboratively, the merrier.

We have seen innovation flow from suppliers back to brand owners time and time again—whether it’s suggesting ways to split deliveries, choosing more cost-effective transportation routes, or knowing how to get clear visibility on a foggy Christmas Eve. In any case, it’s about sharing insights into real demand, orders, inventory and more. You’ll get better outcomes by giving, as well as receiving.

Rigid vs. Resilient

Unexpected events are a reality for today’s supply chain. So, when one arises, the key questions are: How fast does bad or good news travel? And how quickly and smartly can you evaluate your options and weigh your priorities to find the best solution? Take that another step and execute your decision across your trading network so everyone is aligned for success.

These are a lot of questions to consider, but tightly integrated collaborative planning and execution gets us so much closer to true resiliency—the opportunity to make strategic decisions and ensure they’re being executed upon at the times that matter most, such as Christmas.

The good news is that the shift from naughty to nice is achievable—from transformation or strategy initiatives to the values-led leadership of today’s supply chain professionals. Every year I see more and more companies driving better supply chain performance by leveraging innovations that empower partners and customers so the whole supply chain ends up on the nice list.

Have a wonderful holiday season.

As president and CEO of E2open, a provider of cloud-based solutions for collaborative planning and execution across global trading networks, Mark Woodward is responsible for leading the company’s overall operations, including its growth strategy, solutions roadmap and customer success efforts. Woodward attended University of California, Los Angeles and serves as a member of the Board of Regents for Archbishop Mitty High School in San Jose, Calif.