Kinaxis and Deloitte Consulting LLP have announced an alliance to develop scenario planning capabilities for business supply chains. The alliance is intended to create “what if” scenarios for large enterprise customers, so that they can make informed decisions and develop their end-to-end supply chains. The intention is to develop the capability in their clients to meet the demand of rapid market changes in real-time.
This is the second announcement about supply chain scenario planning that we have covered in recent weeks. Plex announced enhancements to their supply chain solution to introduce scenario planning capability within their software. As the capability of software increases to support business decision making in this way it is a natural progression. Royal Dutch Shell, developed scenario planning in the 1970’s. The company was able to react to the oil crisis in 1973 better than any competitor. It used strategies developed in its scenario planning teams that could be implemented rapidly in such an event. One downside of scenario planning is that it is often expensive in terms of cost, both in terms of direct resource costs and opportunity costs for the personnel involved.
This announcement and the cloud-based SCM and S&OP applications that Kinaxis brings with Deloitte consultancy will alleviate some of these costs. The intention is to allow companies to develop scenario planning capabilities and the ability to implement them faster. John Sicard, chief executive officer for Kinaxis commented “Enterprises today need a comprehensive global supply chain strategy coupled with deep industry knowledge and the technology to support the organization’s vision.”
“By teaming with Deloitte, our customers benefit from Deloitte’s worldwide presence as well as cross-industry and country-specific supply chain expertise. The alliance between our two organizations will enable supply chain transformations at some of the largest companies in the world.”
There are companies and business leaders hesitant to adopt a scenario planning approach. This article by Prof. Dr. Torsten Wulf, Philip Meissner pand Dr. Stephan Stubner argues that a traditional approach to strategy is not mutually exclusive to a scenario planning approach. It uses their work in the German photovoltaic industry as an example.
Deloitte has the global experience of delivering advice across the supply chain for companies and the supply chain consulting is part of the strategy and operations consulting team. Deloitte Supply Chain consultants “provide leading edge supply chain advice in all aspects of strategic and tactical assessment, design and implementation to improve supply chain operations, profitability and create significant commercial advantage.”
Ken Olsen, director, Deloitte Consulting LLP, and supply chain planning market offering leader commented “With our clients facing changing market demands in supply chain, it’s important we provide holistic solutions that bring together leading industry business practices with key technology solutions to improve performance.”
“Our integrated Kinaxis solution, with in-memory processing, provides critical capabilities for our clients.”
With increasing uncertainty in many regions the importance of supply chain planning for companies is becoming more critical. The impact of a volatile oil price, EU cohesion, climate change and even cyber terrorism can shape the future for many global firms. The consultancy offered by Deloitte is integrated with RapidResponse, the cloud based application offered by Kinaxis that delivers the basis for the planning including supply chain planning, demand management, S&OP, supplier collaboration.
This is a smart move by Kinaxis as it looks to expand the reach of its software. In developing a relationship with Deloitte the alliance will be able to offer something greater than they could have done individually. This is more than just Deloitte offering an implementation service for the Kinaxis RapidResponse software as it looks to build and utilise the software going forward within companies. If Deloitte gains more engagements from this they will be able to expand not only their expertise but also their reach as they deliver a capability that is growing in popularity at the moment.
Scenario planning seems to be back. For some companies such as Royal Dutch Shell it has never gone away, their scenario planning team has continued to develop the strategy for that company despite the costs having proven itself early on. For other companies however “What-if” scenario planning has sometimes been a budget too far. With Cloud software and a SI/consultancy able to deliver a complete solution it may just be coming back into vogue again.