Shift in cycles. The traditional leader values cost reduction but is blind to how to value time. Over the past three years, supply chain cycles have shift- ec ydc. lCeus –r rt ehne trl ye,qtuheesct ey dc l et ismaer ef rooumt oofr db ea rl atnoc de .eOl i vr de reyr – decreased while supply cycles –the time to procure materials– increased. E-commerce models exacer - boradteedr rtheliisatbrielintdy. while supply variability challenged Higher variability. Demand and supply planning processes assume low variability and use history to guide the future. However, today, supply chains are uT nh tee ot hr de reer di s. Ha i ps tooorry pi sr oax py of oo rr gd ue imd ea nf od r. Tt ho es if du et u- sr tee. p tdhaitsai.sAsbuaen, bduoinldthpelanning processes to use market approach es focused on multiple lnai yz ea rt isoonfs mt heaett ianrges nt oo t i aml ipgrnoevde bc uo tl l faobcoursaet di o onno tf roa rngsa- - actional data. The bloom off the rose on digital transforma- tion. The answer is not digital transformation. In tt hr aenssuf or vr me ya, t4i 8o %n , bouf tc od me spc ar inpi teisv ewaenr ea l dy triicvsi nwg adsi gt hi tea l only element that improved performance . Companies of opremr atthi ne gi r apde iegri tgarlotur apns sdf uo rr mi n ag tti ho en pdai ds tntohtr eo eu typeearr-s . To vheer r- he ay spoend?wDiitghi taa ll ascukp opfl yc lcahrai ti yn ot rna vnas lfuo er m. Taht ei ocne ni s- tral problem is the lack of a clear roadmap to define core capabilities.
Figure 2.5. United States Inflation Rates and GDP
84 alignment. Process latency, the time for an orga- nization to decide on the use of a traditional S&OP process, is two to six weeks. In the face of variability, this is six weeks too long to make allocation or pro- curement decisions. As shown in Figure 2.5, inflation is the highest in for - tuymyee-abrass. eTdr addei ct ii os inoanl spbl aunt nniontg t ph reotcreasdsee-so ff of sc uo fs mo na rvkoel t- price shifts and product mix changes. Challenges Traditional definitions of supply chain excellence focus myopically on cost but are too slow in making decisions in inflationary periods. Companies needed quicker an - spwr oecres s ws ei st ha br ee tstl eorwi ,nps ui gt ht itns g, bs uu tp cpul yr rcehnat i no sr goann it zhaet iboancakl fpol oa nt . nDi nu gr i snygs tt he me ps ,atnudr enmi nigc , ocfof mt hpeaonpi et isms itzr eurgsg, laenddwui st hi n g the technology as a system of record. S&OP is too slow and cannot achieve the needed
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