6 Questions With … Steve Johanson

Steve Johanson is the SVP industry principal for network optimization at Logility, where he draws on 25 years of helping clients optimize their supply chains. Johanson works with the Logility team to bring new solutions to the greater supply chain community and to help the client base build skills and knowledge to sustain competitive advantage.

Logility, a wholly-owned subsidiary of American Software, Inc., offers the Digital Supply Chain Platform, which delivers optimized demand, inventory, manufacturing, and supply plans.  The cloud-based platform leverages Generative AI, advanced AI-driven algorithms, and machine learning to help deliver integrated planning and operations across the end-to-end supply chain.

(Answers have been edited for clarity and length)

SCMR: Can you tell us a little about your career journey and why stepping into a leadership role in network optimization at Logility was right for you?

JOHANSON: My career journey began in management consulting, where I always focused on delivering the best outcomes for clients, regardless of technology or process.

I noticed that many technologies were geared toward academics or consultants, not end users. This gap shaped my leadership vision, as I aimed to put powerful technological tools in the hands of end users so they could make informed decisions without constantly relying on outside experts.

In some ways, this philosophy was a continual process of eliminating my own job, which is counterintuitive but also reflects what’s ultimately best for the customer.

Joining Logility allowed me to pursue this vision of making network optimization more accessible and user-friendly for clients, addressing a key pain point in the industry. It was the right step to truly help end clients and bring methods directly to the users who need them most.

SCMR: Logistics is predicated on coordination and predictability. Through 2024, how have both become more difficult to achieve?

JOHANSON: Logistics in 2024 is uniquely challenging as a combination of factors, including economic uncertainty, geopolitical conflicts, sustainability initiatives, and growing pressure for transparency make coordination and predictability more difficult to achieve.

Meanwhile, businesses have shorter planning horizons and increased variability in supply and demand, which always makes logistics more difficult to predict and coordinate.

This has created a need for more flexible and responsive supply chain networks, which can be frustrating for leaders who have to invest additional time and effort into managing their networks effectively.

There’s now a need to design and redesign networks more frequently, as the building blocks of supply chains have become smaller and more dynamic. This increased flexibility comes with significant benefits, but it also introduces new complexity when coordinating efforts, making predictability more challenging.     

SCMR: Why do global manufacturers need to design and improve their supply chains to account for variability and elevate resiliency? Are most already taking this approach?

JOHANSON: Global manufacturers need to design and improve their supply chains to account for variability and elevate resiliency for several reasons.

First, unmanaged and undesigned networks typically have an 8-25% suboptimal cost structure. With businesses facing growing pressure to deliver cost efficiency and service reliability, this is an untenable dynamic.

At the same time, modern supply chains require shorter-term commitments and more flexible options, like seasonal warehousing, that demand more frequent network adjustments.

Global manufacturers need the ability to respond quickly to disruptions and market shifts. Right now, few are embracing this priority. According to a Forbes analysis, just 9% of manufacturers “actively design their supply chain flows,” creating an opportunity for forward-looking companies to outpace the competition through better supply chain management.

SCMR. What best practices do you recommend companies use to gain a better competitive advantage in their supply chain management?

JOHANSON: To gain a competitive advantage in supply chain management, companies should start by designing supply chain flows. They achieve this by implementing rapid iterations of supply chain design and creating “what if” scenarios around potential disruptions. This allows them to sense changes and respond more quickly to even small supply chain shifts.

Supply chains are increasingly data-driven entities, and companies can outpace the competition by analyzing supply and demand variability data. Treat the supply chain as a system, looking at supply and demand variability and rapidly integrating new data into your supply chain analytics to sense and respond to changes quickly.

Additionally, companies should align assets to improve supply chain reliability. They should integrate strategic network optimization processes into tactical planning and phase changes into operations logically but efficiently. This helps bridge the gap between network design and planning systems to ensure execution.

Companies should also consider creating a center of excellence for network optimization to perform network optimization as often as possible.

Of course, advanced technologies, like artificial intelligence (AI), can be leveraged to predict changes and develop responsive, resilient strategies. Platforms that can handle heterogeneous data sets can also be used for more comprehensive analysis.

SCMR. Why is analyzing and modeling sustainability scenarios a critical step in this process?

JOHANSON: Increasing regulatory pressures and stakeholder expectations make analyzing and modeling sustainability a critical part of supply chain management in 2024 and beyond.

Companies are measuring emissions in anticipation of future government and corporate-direct sustainability goals, and they’re incorporating sustainability metrics alongside cost and service in scenario analysis to prepare for future emissions limits and gain a competitive advantage.

To be sure, sustainability data also provides valuable information for marketing, public relations, and investor relations initiatives, so its overall impact is multifaceted and far-reaching.

SCMR. As we head into 2025, what recommendations do you have for global manufacturers to navigate the unseen challenges that may lie ahead?

JOHANSON: Every industry is being reimagined by generative AI, and the supply chain sector is no different. For instance, this rapidly improving technology can help predict changes and develop responsive, more resilient supply chains. It can also unlock more comprehensive analysis and faster decision-making so manufacturers and supply chain stakeholders can move beyond rigid models and adopt a more agile approach.

I believe that generative AI will help global manufacturers more precisely anticipate as yet unseen challenges that may lie ahead, helping solve problems before they proliferate.

SCMR: Thank you.

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