Stefan Krusselmann: "Few supply chains have integrated the new reality: agility and anticipation."

Stefan Krusselmann leads the Supply Chain practice at SpinPart, a strategic and operational consulting firm in management and organisation. He reflects for us on several standout elements of a very eventful 2022 for a profession – the Supply Chain – which remains in flux following the COVID crisis.

— Can you tell us a few words about your interventions?

We approach our consulting mission – primarily serving large international companies in the automotive, industrial, and energy sectors – with a five-axis vision. First, we ask ourselves the following question: what is the purpose of the supply chain, or rather, what should it be used for? Do we simply want to reduce stock, have the most flexible supply chain possible, the least costly, or even improve availability for better customer service? By focusing on the need in this way, we generally find more relevant answers.

Next, our thought focuses on performance: what needs to be implemented so that the company's network, from production to transport, operates optimally.

The third axis – undoubtedly the most strategic – concerns the management of the supply chain, with different layers, first the Business Plan in the long term, then the Sales & Operations Planning and finally the Master Scheduling, "old school" with Material Requirements Planning (MRP) or with more innovative methods like Demand Driven MRP.

— Does the rise of the Demand Driven approach, which influences the S&OP and Master Scheduling layers, illustrate the imperative of agility that now presides in Supply Chain?

Absolutely, it's a different way to approach Master Scheduling since we no longer rely solely on forecasts but instead dimension buffers (of stock, time, capacity) to be able to manage with better flexibility based on actual demand, with a forward-thinking dimensioning that persists through Sales & Operations Planning. This new mechanism offers more agility. A key criterion for all businesses today.

After methodology comes the question of tools, which is our fourth axis. I should note that we are neither software vendors nor integrators, so we remain neutral in our recommendations. However, it is evident that the maturity of tool usage is rarely as expected, even within large, or very large CAC40-type companies that we support. Everywhere it’s much the same; tools rarely function efficiently.

Last axis: organisation in its human dimension. The challenge here is to establish an organisation that operates harmoniously and efficiently.

We have thus covered all the levers that condition supply chain performance and more broadly the competitiveness of the company.

— Your finding on tools illustrates a paradigm shift, namely the necessity of having a demand-led supply chain in an ever more volatile and uncertain context, with existing tools still poorly adapted to this new situation...

Yes, it's very clear, I know few systems that work well, however, I know many “gas factories”!

We are always confronted with inertia, yet we must be able to make decisions and act more quickly, with a certain level of anticipation. It’s a competitiveness issue, even survival! Few tools, and ultimately few supply chains, have integrated this new reality.

— Precisely, what notable fact(s) do you recall concerning the past year?

In 2021, many of our clients had immense difficulties completing their projects following lockdowns and the disruptions that could have caused. It was during this period that we noticed an enthusiasm for Demand Driven projects.

Post-COVID, we are still facing waves of disruptions in supply chains, and we are witnessing a strong comeback of Sales & Operations Planning among many of our clients, indicating a search for agility and resilience at the management level, not just strictly operational.

With all these often poorly anticipated supply crises – we discover new ones every day, between semiconductors in the automotive industry, shortages of steel parts produced in Ukraine for the railway industry, or even the mustard shortage – each time causing significant cascading disruptions on the value chains, the Supply Chain has established itself as a strategic function of the company, a key factor of their competitiveness.

At SpinPart we notice this daily, the demand is enormous. We have many requests for projects aimed at reducing inertia and improving anticipation, these are really the dominant themes.

— So you see the S&OP process being developed to address this need for anticipation, one imagines that the question of tool adaptability resurfaces too?

Unquestionably. Companies need to strengthen their ability to make globally adapted decisions – this is the subject of S&OP – but there is a second subject where techniques like DDMRP come into play, namely how to link these anticipations to better reactivity to adapt quickly, because even if we manage to decode the future well, there are always surprises and they are rarely good. So we need to be able to react quickly, without inertia, and the Demand Driven vision responds well to this imperative.

— Is sustainability becoming a priority topic with your clients?

Yes clearly, it is a subject that weighs increasingly. My conviction is that we often make the mistake of opposing sustainability to economic efficiency, whereas in many cases it goes the same way and will have to go, in the long term, in the same direction. From my point of view, it is by aiming for more efficiency and much less waste that we will get there. In this regard, the Supply Chain is a tremendous lever to achieve our neutral goals. For example, when we see the products that are destroyed because they are not sold, the raw materials extracted that are not repurposed… There's a whole circular economy to be developed with significant productivity gains at stake. It will quickly become an imperative anyway, starting with electric cars if we want to deploy them on a large scale.

— Ultimately, the Demand Driven vision, which aims in particular at the goal of producing only what is necessary, also addresses this concern?

Absolutely, also in that it significantly reduces the abrupt adjustments due to poor anticipation – leading supply chains to alternate between inertia and overreaction – with all the harmful effects this generates on the ecological footprint of the value chain. The Demand Driven approach has much more efficiency, we are in finer adaptation and better connected to actual demand. Thus, in terms of sustainability, DDMRP undeniably adds a significant contribution.

Interview by Ghislain Journé.
Main photo: Stefan Krusselmann.
Credits: Welcome To The Jungle.