A: “Companies like PepsiCo are all working on moving from the traditional Descriptive and Diagnostic analytic capabilities to Prescriptive analytics. Adopting prescriptive is critical for supply chains to gain a competitive advantage now and in the future. I firmly believe driving visibility and end-to-end optimization in the supply chain is the single biggest opportunity for transformation within a business or enterprise.”
Q: Tell us more about Prescriptive Analytics. How are you using it today and where do you see transformational opportunities?
A: “PepsiCo has been on the journey to move to prescriptive for a while now and are only at the start of what has the potential for tremendous productivity and value to our business over the next decade. Currently, it’s being used to develop a pipeline of P&L value creation to drive service, inventory and productivity for our business.”
Q: How would you describe the value add from Prescriptive Analytics?
A: “Current analytic capabilities focus on what happened and why it happened. The power of prescriptive is that it matures our decisions from “how did I do?” and “how am I doing?” to “what will happen?” and “what should I do?”. The power of being able to reinvest resources in the future to change the score versus keeping or calculating it is exciting for the future."
Q:What challenges do you see in driving broad adoption within the company? How are you managing around these?
A: “The challenge for most companies is not data. The challenges are a) too much data that is not properly organized,b) too many analytical tools and approaches across different parts of the organization and c) the limited skills in the organization. You need to align the organization on data requirements both short and long term. With something like River Logic, it actually makes sense to work your way backward — figure out what information you need and clean that up — and stop trying to clean and organize all of your data before getting started. Leaders should just focus on what information you need to answer the most valuable problems to solve.
Establishing a Center of Excellence for Supply chain Analytics and ensuring the right skills are there to understand not just the analytics but the business well enough to frame the right questions to solve for is a great step for larger companies. The team can be small (even just a few people) but needs to be dedicated to the objective of advancing analytics to be most effective. It is a journey, and you must have the discipline to stay with the transformation.
For smaller organizations that might not want to establish a COE, I would suggest investing in talent that is open to solving problems with analytics. Look for those talented with advanced analytics, data knowledge and business as opposed to programming — these types are critical to bring into the organization.”
Q: What would you want other supply chain leaders to know about Prescriptive?
A: “Many companies have been on the prescriptive journey for a while; but now, with the tools that are available today, companies can actually leapfrog to the most advanced planning stages and realize value much more quickly with significantly lower investment than those who have had to build over time. Companies no longer need to go from descriptive, to diagnostic to predictive. In fact, those starting their analytics journey today with River Logic have a competitive advantage, because it leapfrogs so much of what has been used in the past.
With respect to where companies should begin, I think at times organizations take this on and are overwhelmed with a scope that’s too large. Framing a few of the biggest areas of value creation and staring there will bring the organization along in the journey and quickly prove value early on.
I fundamentally believe that those organizations that can most effectively leverage prescriptive analytics over the next decade will be most successful in driving value creation.”
Q: How would you recommend other organizations get started? Who is the right person/role to lead such an effort within an organization?
A: “In my opinion, many efforts fail because organizations see this as the IT team’s role. Clearly, the IT team is a critical enabler — but this value will never be realized without a critical business sponsor who can champion the commitment / journey and hold the organization accountable to deliver the value. More importantly, the business leaders must be driving the problems to be solved, only then will it bring the most value.”
Q: You’ve been exposed to River Logic — what unique value do you see in RLI as a platform for prescriptive?
A: “I have been most impressed with its ease of use. It’s a platform that can be consistent across applications, so there is not a need to build multiple tools or learn new components as you grow. Further, the fact that it can sit on top of your existing applications without the need to replace or re-platform is extremely valuable.”