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Unlocking Supply Chain Decision-Making Secrets

By Bernard Milian
Train tracks leading to a warehouse

At our French user conference in June 2023, our partner DFYA reminded us that we’re constantly making a huge number of decisions.

One figure put forward is 35,000 decisions per day for an adult human. If you do an Internet search on the number of decisions per day, Google will indeed give you 35,000. However, the scientific source of this statistic, which is repeated on several sites, seems dubious – notably influenced by a Microsoft advertisement – nor does it refer to a real scientific study… I confess I didn’t ask ChatGPT – lest he invent a study out of thin air.

Welcome to the wonderful digital world where a statement becomes truth when it’s repeated enough, and let’s keep trying to take our 10,000 steps a day since no study has shown that it’s the right number, but it can’t hurt…

On a company scale, the number of decisions taken inevitably increases, in proportion to the number of individuals – even if we can see that sometimes the decisions of some go against the decisions of others – and that the more decision-makers there are, the more inertia there will be – I’m sure you have some juicy anecdotes to share on the subject.

Whatever the actual statistic, the fact is that each and every one of us makes a lot of decisions every day and that the number of decisions taken within the community that is a company is staggering, probably several million a day for an international company. When you extend the scope to a supply chain – that is, beyond the company itself, to a network of partners – customers, suppliers, service providers – how is it possible to orchestrate so many decisions to give them sufficient coherence?

Automation and intuition

As individuals, what enables us to make so many decisions every day is that we make them without thinking. Either because we’ve automated the decision-making process, after learning how to do it quickly (breathing, for example) or over a longer period of time (walking, cycling). Automation in supply chain decision-making is also welcome. We cycle automatically, instinctively, because we’ve gained confidence, through an experimental process and a few scratches. Automating supply chain decisions requires acquiring this same confidence in the system, without having to resort to Excel, which most ERP and APS systems have failed to do…

Intuition also helps us make decisions on a day-to-day basis. We don’t have to think about it much – we make a lot of decisions because they’re obvious. I decided to stop at a red light without having to think about it. As we’ve already mentioned, far from being irrational, intuition is above all the automatic implementation by our brain of knowledge accumulated in our long-term memory. So, when it comes to making a large number of day-to-day decisions in the supply chain, there’s nothing better than having an operating model and intuitive digital solutions at your disposal.

Consistency and operating model

But automation and intuition are not the answer to everything. Our businesses are communities involving multiple functions, multiple sites, a myriad of interactions. Extended to suppliers and customers, the equation integrates multiple unknowns.

Even to implement automation and exercise intuition, you need coherence – common sense – a consensus on an operating model, missions, and objectives.

The proposal of the Demand Driven approach is to go back to basics to bring coherence. The core mission of a company or supply chain is to transform raw materials to deliver finished products to the market. This is called flow in the supply chain. Focusing on this flow that brings value to the market ensures consistency for all contributors.

To support this flow, we need an operating model. Lean VSMs have been popularized – that is, physical and information flow modeling. In the age of process mining, we can debate the need to evolve the old-fashioned VSM, but formalizing material and information flows is essential to establish shared understanding and consistency in decision-making processes.

Data, Visibility, Collaboration

“Without data in decision-making, you’re just another person with an opinion,” said Edward Deming. To feed your decision-making processes, and even more so collaborative decision-making involving several players, you need to set up a business intelligence platform that makes the current and past situations visible and sheds light on future options and causal links.

Beware: having visibility is not enough – you need to establish review and adaptation processes, exchanges with internal and external stakeholders, and an S&OP decision orchestration process.

Intuiflow of decisions…

Our Intuiflow solution is streamlined, intuitive, and automated, allowing you to define and adapt operating models in conjunction with an S&OP process, and business intelligence integration. It’s designed to make it easy to orchestrate a multitude of decisions on a day-to-day basis!

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