In this blog post, I discuss two supply chain trends that we expect to continue in 2021. The first is related to Resilient and Sustainable Supply Chains. The second is related to Sales and Operations Execution (S&OE). In the second post, I’ll cover two additional supply chain trends to watch in 2021 and beyond.

 

Resilient and Sustainable Supply Chains 

Supply chain resiliency became a common topic in business discussions in the past year due to COVID-19. The word “resilient” is defined in the Merriam-Webster dictionary as “an ability to recover from or adjust easily to adversity or change.” The word “resilient” in a supply chain context has a more focused meaning. According to Professor Yossi Sheffi at MIT, supply chain resiliency is “the ability of a company to quickly respond or bounce back from a significant disruption.”

Supply chain resiliency has, in fact, become a priority for some governments. On February 24, 2021, U.S. President Biden signed an executive order related to strengthening the resilience of America’s supply chains. The policy states that “The United States needs resilient, diverse, and secure supply chains to ensure our economic prosperity and national security. Pandemics and other biological threats, cyber-attacks, climate shocks and extreme weather events, terrorist attacks, geopolitical and economic competition, and other conditions can reduce critical manufacturing capacity and the availability and integrity of critical goods, products, and services.” One can imagine that many governments in other countries may also make supply chain resiliency a top priority.

At the same time, a renewed focus on sustainability has emerged in many chemical companies as they set new targets to reduce energy use, emissions, and waste while governments include green energy policies in economic recovery packages. The lesson from the past year is that sustainability and resiliency are two sides of the same coin. 

Supply chain digital twins can help manufacturers achieve their resiliency and sustainability goals. For example, AspenTech’s work with FP Corporation (FPCO), along with Time Commerce (an Aspen Implementation Services Partner), was recently recognized with a 2020 Green Supply Chain Award from Supply and Demand Chain Executive. FPCO is the largest maker of plastic food containers and related packaging materials in Japan.

 

The Aspen Supply Chain Management (SCM) planning and scheduling system used by FPCO to optimize its extensive supply chain.

 

The President of FPCO, Morimasa Sato, will be an executive speaker at our upcoming OPTIMIZE 2021 virtual conference. President Sato’s presentation “Our Strengths in the Supply Chain and Recycling” will provide insights into how the company utilizes Aspen Supply Chain Management (SCM) planning and scheduling to economically optimize its extensive supply chain on an ongoing basis and consistently supply more than 10,000 types of food containers to supermarkets across Japan, support food infrastructure, and build a recycling-oriented supply chain with the goal of a sustainable society.

 

Managing Change through Sales & Operations Execution (S&OE) Digital Capabilities 

As every manufacturing company knows, things don’t always go as planned. Supply and demand uncertainty bring forth inevitable daily events and disruptions that must be managed. This can include production quality issues, logistics delays, last-minute changes to customer orders, etc. For most organizations, COVID-19 amplified supply-and-demand disruptions to a whole new level.

We are seeing a trend in the market related to manufacturers wanting to become much more agile. This is driving numerous customers to implement Sales and Operations Execution (S&OE) processes and related digital solutions. S&OE is a process that allows manufacturers to align their day-to-day activities on an ongoing basis to achieve their longer-term Sales & Operations Plans (S&OP) while also improving agility. 

 

Sales and Operations Execution (S&OE) capabilities are vital because things don’t always go as planned.

 

The October 2020 Forbes article Hexion Is Blazing New Trails in Improving Profitability, authored by Steve Banker from ARC Advisory Group, focuses on how Sales & Operations Execution helps Hexion specialty chemicals improve profitability through high operating leverage and increased productivity. The article provides some insights into how “AspenTech’s collaborative platform allows the demand, inventory, production planning, capacity planning, and quality teams to interact and create better production schedules based on the inevitable disruptions that are occurring.” I strongly encourage you to read the Forbes article, if you have not had the chance to do so yet.  

I am also delighted to announce that there will be a free and live webinar on April 20th entitled “Enabling Agile:  How Hexion uses Sales and Operations Execution (S&OE) to Enable Business Transformation” featuring Hexion’s Vice President of Global Supply Chain Javier Invernizzi in conversation with Steve Banker from ARC Advisory Group.  In this webinar, they will discuss how S&OE and Agile help Hexion adapt to change and the velocity of change.  Make sure to register for this “not to be missed” event!

In next week’s blog, I’ll cover two additional supply chain trends we’ve observed that we expect to continue in 2021 and beyond. 

 

Optimize 2021 Virtual Conference – Supply Chain Management (SCM) Track 

For the first time ever, AspenTech’s OPTIMIZE conference will be a virtual experience, and registration is free. Please visit optimize2021.com to register.