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21st Century Supply Chain

1,203 posts
by Teresa Chiykowski

2018 eventsAs we bid farewell to 2017 and usher in a new year, what can we expect to see in 2018?

 

As per usual, folks will flock to the gym in record numbers to burn off those extra holiday pounds and then, all too soon, workouts will become a distant memory (These are “January people” according to an article in the Huffington Post).  I know this to be fact because I am a January people.

 

This year will also see athletes from around the globe gather in Pyeongchang, South Korea to go for gold at the 2018 Winter Olympics. “Royals” fans will be glued to their TVs and personal devices to watch Prince Harry wed actress Meghan Markle at St. George’s Chapel in England. In November, space travel enthusiasts will follow the launch of NASA’s InSight as it embarks on a journey to the “Red Planet” – Mars.

 

But wait, there’s more.

 

When it comes to big events in 2018, let’s not forget about the world of supply chain planning. There are some cool events in 2018 you might want to check out. Here are just a few at a glance.

 

SCM World Live Americas: Feb. 4 – 8, 2018 (Miami, FL)

 

Catch SCM World’s Live Americas 2018 in Miami, Florida – an exclusive forum for SVPs and VPs of supply chain looking to drive the roadmap to digitize their supply chains.  The event will see the world’s most influential supply chain practitioners gather to hear from cross-industry leaders and explore how digitization is revolutionizing the capabilities of supply chain, and the practical steps to building a digital roadmap to transform the entire business.

 

3rd BME Global Pharma Supply Chain Congress: Feb. 26 – Mar. 1, 2018 (Frankfurt, Germany)

 

BME Global Pharma Supply Chain Congress is Europe’s only true peer-for-peer event for Supply Chain Leaders in pharma, medtech and global healthcare. Over the course of three days, attendees can find inspiration from plenary keynote speakers, gain valuable insights from case study presentations, expand their knowledge through in-depth workshops, and more.

 

LogiMed US 2018: 6 – 8, 2018 (Atlanta, GA)

 

LogiMed is a focused conference for supply chain VPs and directors from medical device and diagnostics manufacturers. Through case study examples, small group discussions, and structured networking activities, attendees will learn about best practices to improve end-to-end supply chain processes and minimize cost in today’s dynamic healthcare environment.

 

Gartner Supply Chain Executive Conference: May 14 – 17, 2018 (Phoenix, AZ)

 

One of two Gartner Supply Chain Executive Conferences held during the year, the North American event features analysts specializing in all supply chain disciplines. The conference offers an unrivaled resource for chief supply chain officers and their supply chain leadership teams when it comes to advice and expertise, and it provides a platform for the informed and provocative debate that is essential to raising the bar on supply chain performance.

 

Kinexions ’18 User Conference & Training: Oct. 15 – 18 (National Harbor, MD)

 

Kinexions is the premier annual event for the Kinaxis® RapidResponse® user community, including customers and partners. The conference offers two full days of networking, inspiring keynotes, informative general sessions and a variety of breakouts delivered by customers, product experts and partners. Last year’s mainstage presentations included market-leading companies such as Honeywell, Schneider Electric, Merck, Lippert Components and DJO. You can get a taste of Kinexions by visiting the 2017 site. Not a Kinaxis customer or partner yet? You might be eligible to join us and see what the hype is all about. Contact us to learn more.

 

Do you have any suggestions for places to be in 2018? Let us know and we’ll add them to the list!

 

The post 2018: The Winter Olympics, a royal wedding, space exploration and, of course, big supply chain planning events appeared first on The 21st Century Supply Chain.

 

Future of supply chain

 

Originally posted by Teresa Chiykowski at https://blog.kinaxis.com/2018/01/2018-winter-olympics-royal-wedding-space-exploration-course-big-supply-chain-planning-events/

by Dr. Madhav Durbha

business case for your supply chain investmentsOver the years I’ve had the opportunity to engage in or witness the process organizations go through to prepare business cases in support of supply chain investments, from the successfully crafted and executed, to those that fail to gain traction.

 

Based on that experience, I wanted to share my eight most important pieces of advice for those being asked to prepare a business case for their supply chain investments.

 

  1. Ensure clarity on the strategic objectives of your organization.
    Any sizeable supply chain investment draws the attention of the senior leadership. Rightfully, your leadership will look to understand how the initiative supports the overall strategic objectives of the business. Being well versed with these objectives and able to demonstrate how the proposed initiative will support them is paramount to getting buy-in from your executives.
  2. Show how the initiative supports strategic objectives.
    Are your executives measured on servicing strategic customers better than your competition and reducing regulatory risks? If so, your business case will need to show how you can align with these objectives. For example, understanding your customers’ buying behaviors and segmenting and serving them based on these behaviors will help differentiate strategic customers. By enabling end-to-end visibility across your entire network, you can put a flashlight on looming regulatory risks. Make strong links between the strategic objectives and the enablers as directly and explicitly as possible.
  3. Use analysis and anecdotes to craft a compelling story.
    If your business case comes down to driving a reduction in inventory or an improvement in employee productivity, providing sufficient operational data analysis along with anecdotal evidence of how the initiative can make a difference will help provide a compelling backdrop. Even a simple segmentation analysis on your customer or SKU portfolio, or bringing together your demand, supply and inventory in one place can be eye opening. For example, if 50 percent of your on-hand inventory is tied to supporting products that represent only six percent of your gross sales, you may have a prime opportunity. Apart from data driven insights, sharing anecdotes about the risks of not doing anything can be a strong motivator. For example, if better visibility could have avoided a regulatory fine of US $4 million, bring it up!
  4. Factor in competing projects.
    From time to time I come across a business case that’s built with no consideration of competing projects. If you sum up all the business cases claiming inventory reduction, organizations with such business justification should be running on negative inventory! The key is for you to understand what other initiatives are in flight in your company and reflect an appropriate entitlement for the benefits you’re claiming. For example, if you’re making a business case for a supply chain planning project and there is an inflight Warehouse Management Systems (WMS) project, you should engage with the team driving that project to identify synergies and appropriately reflect the entitlements without double counting them.
  5. Understand your stakeholders and ensure their buy-in.
    A young logistics executive who was pitching for a transformation project once lamented to me about how his business case presentation to his leadership team failed. It turns out this young executive worked very hard and analyzed a lot of data to put together what he thought was a compelling, objective business case. As part of his business case, he proposed a 12 percent reduction in inventory while enabling a 1.5 percent revenue growth driven by better management of the inventory mix and ensuring product availability. It turns out the executive in charge of sales who was responsible for delivering revenue growth was in the room with his peers and saw the business case for the first time. The project manager was asked to go back to the drawing board as the commercial executive challenged his assumptions. The young executive in this case could have avoided the agony by testing and validating his assumptions with the commercial lead ahead of time.
  6. Identify your sponsor and let them bat for you.
    The aforementioned situation could have been avoided if the young executive had engaged the help of another executive with significant interest in the success of the initiative; someone who had enough gravitas and a knack for navigating the organization. Remember, you’re selling your business case to stakeholders who often have conflicting objectives. Building consensus for change can be a delicate process. A sponsor can be of great help!
  7. It is your business case. Own it!
    While your company may have engaged external consultants to help you build a business case, you are the owner of the business case. At the end of the day, it is not your consultant who’s signing up for the business case – it’s you and your executives who will commit, and then be measured on it. So, you must understand, own, and stress-test every assumption driving the business case. Use multiple triangulation points so you gain confidence in the business case. Needless to say, you must factor in all internal and external costs to drive ROI, a breakeven point, and Net Present Value (NPV) to make it comprehensive.
  8. Measure the value to ensure success and sustain momentum.
    This last step is often easily forgotten, as I’ve seen some projects get the necessary buy-in and funding only to falter in execution. Your business case with all its stated objectives and enablers should serve as a guidepost for successful project execution that can be sustained over time. However, when an organization struggles with change management, it can be of great help to refer back to the business case to remind stakeholders of the overall project objectives. When you measure, socialize and celebrate the value a project has delivered to date with both your team and broader audiences within your organization, it will prove to be very meaningful and fulfilling for your entire team.

I hope you find this helpful in the development of your next business case.

 

What advice would you have based on your own experiences on the topic? I’d love to hear your thoughts!

 

The post 8 steps for a successful business case for your supply chain investments appeared first on The 21st Century Supply Chain.

 

Demand planning: 4 ways to outplay your competition

 

Originally posted by Dr. Madhav Durbha at https://blog.kinaxis.com/2018/01/8-steps-successful-business-case-supply-chain-investments/

by Alexa Cheater

Focus on a practical approach to implementing artificial intelligence (AI) and machine learning (ML) in your supply chain planning.

A pragmatic approach to getting started with artificial intelligence in supply chain planningThat’s the advice from industry-leading experts, as heard in our recent webinar, A pragmatic approach to getting started with artificial intelligence in supply chain planning, now available on-demand. Hosted by Robert Bowman from SupplyChainBrain, guest speakers Brian Tessier from Schneider Electric, Paul Cocuzzo from Merck and Trevor Miles from Kinaxis, discussed what you could do right now to take advantage of this trend.

 

From finding a practical application that provides tangible value for your business, to ensuring you have the right organizational structure in place, Tessier and Cocuzzo provided real-world advice driven by their organization’s own quests to implement AI in supply chain planning.

 

“Having AI take a world view based on best practices, and then applying it to your legacy data structures and business rules can give you insights into things you don’t even know are problems for you,” notes Tessier. “We found very quickly we had some very poor assumptions about lead times, both from suppliers and interplant shipments from within our supply chain. Given the number of transaction we do, the complexity of our product portfolio and the number of entities involved, there’s no way we would have found this any other way.”

 

“You need to get out of the classroom and into the lab,” explains Cocuzzo. “You need to experiment as often as possible. Don’t be afraid to fail. You really need to get yourself out there practicing with these new capabilities, attempting some of these experiments with these new technologies. And you need to start to thinking about how you’re going to execute both on these experiments and for those experiments that are successful, how are you going to bring them forward?”

 

Speaking on the required talent and organizational structure to implement AI, Miles added, “It’s about having the right combination of skills, because you do need to go and make those algorithms do stuff, but you must always know it in the context of the overall business objectives that you’re trying to achieve.”

 

Interested in hearing more from these experts on how to implement AI and ML in your supply chain planning? Watch the complete on-demand webinar now.

 

 

 

The post [On-Demand Webinar] Getting started with artificial intelligence in supply chain planning appeared first on The 21st Century Supply Chain.

 

Demand planning: 4 ways to outplay your competition

 

Originally posted by Alexa Cheater at https://blog.kinaxis.com/2017/12/demand-webinar-getting-started-artificial-intelligence-supply-chain-planning/

by Jonathan Matthews

Supply Chain Software Christmas Story T’was the night before Christmas and all through the house, not a creature was stirring, not even a… well, that’s not quite correct.

 

There was some stirring in the Clause house as Santa slowly shifted positions in his easy chair, looking out the window into the howling snow storm outside. The weather forecast said the storm would be blowing over soon and, and truth be told, it wasn’t that bad of a snowstorm. Certainly not like the famous storm eleven years ago.

 

But the weather had been poor the past month, and certainly not conducive for the last minute production crunch leading up to Christmas. Mentally preparing himself for the insanity the next 24 hours would bring, Santa mulled over the past year.

 

He should have been notified about production delays by now, but strangely, nothing had crossed his plate. Not even the unsavory incident he had overheard about in early November, when an elf drank a little too much eggnog and broke machinery, leading to a production delay. Even in the best years there are delays and problems. Right?

 

“Honey,” Santa Clause said softly, getting Mrs. Clause’s attention from the book she was reading. He noticed that it wasn’t her usual novel type book, but rather looked more like a technical manual. Without his glasses on, Santa didn’t try to strain his eyes to make out the title; he’d ask her later about it.

 

“Why haven’t I been told about the production delays? Tonight is, after all Christmas Eve and with all this poor weather we’ve been having, I’m sure we’ve run into delays. Yet nobody has said anything to me about it!”

 

“Well,” Mrs. Clause responded, “You haven’t been told anything because there’s been nothing to report. You know the old saying, no news is good news!”

 

With a puzzled look in his eyes, Santa sat upright in his chair and turned his focus on Mrs. Clause.

 

“But how can that be?” exclaimed Santa. “Remember the great present shortage of two years ago? That was a disaster! I had to “borrow” some toys from the local toy stores,” Santa gestured air quotes around borrow.

 

“Well,” Mrs. Clause responded “After that Christmas, I met with Alabaster Snowball and the other department head elves to discuss how we could better prepare for future problems that we may run into. We brought in a supply chain expert who suggested using a specialized supply chain software rather than just the worksheets we had cobbled together.”

 

“Go on,” Santa said, shifting forward in his chair with keen attentiveness.

 

“We moved forward, bringing in an evaluation team,” Mrs. Clause explained, pausing to snicker as she recalled the events. “The team knew we would be their biggest implementation ever, by a long shot, but they really hadn’t expected us to have a Bill of Material for every toy made that year! One even fainted in disbelief! Poor fellow. Fortunately, Pepper was nearby with some of her famous eggnog.”

 

“Oh yes!” Santa said, his eyes growing wide. “Her eggnog would be world famous, if she hadn’t signed my NDA, ho ho!”

 

“Once the consulting team overcame shock, we were able to quickly and efficiently get the software implemented last year, with go-live in January, perfect for starting this year. We were able to use the software to account for every scenario we may encounter, like poor weather! On top of it all, we were able to work around that nogg-induced production shut-down we had last month.”

 

“Hmmmm….” Santa pondered, stroking his long white beard hair, recalling that stoppage. “I remember the sense of urgency, but nobody panicked! I never heard much of it since, so I just sort of, let it go!”

 

“And thanks to our excellent software, we were able to accommodate that outage, so we really didn’t lose much production at all.”

 

Santa, now standing and stretching, became even more curious.

 

“And what of the weather these past couple of months?”

 

Chuckling to herself, Mrs. Clause responded, “Do you want me to go into the advanced analytics behind our what if’s?”

 

“Ho, Ho, Ho,” Santa laughed, “I knew there was a reason I married you! I shall leave that to people smarter than me. After all, I’m just the guy that travels at light speed!”

 

Santa walked over to Mrs. Clause, bent down to kiss her cheek, and captured a glance at the title of the book she was reading — Strategic Supply Chain Essentials and Master Management Planning!?!

 

“Well, that explains the book,” Santa said “But tell me, since when did you become a supply chain expert?”

 

To which Mrs. Clause said with a wink, “You don’t think I sit around all year just baking your cookies? Somebody has to get some real work done around here!”

 

With another jolly laugh, Santa headed towards the coat rack and silently mumbled under his breath, ‘advanced this-and-that’.

 

“I heard you,” Mrs. Clause said. “And don’t think I haven’t met with the master supply chain planner to account for ALL possibilities… including any and every *cough* unfortunate happenings.”

 

This caused Santa Clause to stop dead in his tracks. He looked at his wife with a hint of concern.

 

“Don’t worry Dear Santa,” Mrs. Clause re-assured him, “I learned how to fly that fancy sleigh just this summer. And with a little tailoring, your jacket will fit me just fine!”

 

“I don’t know if I should be worried, or if I should be surprised!” remarked Santa. “But then again, that’s why I married you! You are amazing, always thinking ahead!”

 

And with that, Santa flung open the front door while bellowing out, “Ho, Ho, Ho! Merry Christmas to all!” And walked through the door.

 

In the comfort of knowing his wife and elves had a mastery over the entire North Pole Supply Chain, Santa would never need to worry again. Now he could focus on his expertise, delivering presents to children in peace.

 

“Merry Christmas to all, and to all, a Happy Supply Chain New Year!”

 

The post A Supply Chain Software Christmas Story appeared first on The 21st Century Supply Chain.

 

Demand planning: 4 ways to outplay your competition

 

Originally posted by Jonathan Matthews at https://blog.kinaxis.com/2017/12/supply-chain-software-christmas-story/

by Alexa Cheater

Outplay your competition with a smarter, stronger demand planning strategy

Demand Planning GameCustomer demands are changing. So why isn’t your demand planning strategy? It’s time to level up your demand planning and experience revolutionary breakthroughs in supply chain performance, planning and profitability.

 

Demand complexity is increasing thanks to consumers who now want more customization, omni-channel purchasing options, rush delivery, easy returns, and environmentally and ethically crafted merchandise, just to name a few present-day requirements. So how can your supply chain handle it all?

 

The key is to recognize solving today’s demand planning challenges just isn’t possible with yesterday’s dated processes and technology. It’s like trying to play Call of Duty: WWII on a system designed only to handle the technical requirements of Duck Hunt. The inevitable lag time, glitches and poor visibility destroys the experience. Yes, once upon a time you may have considered those old systems cutting edge. Now they just don’t have the capabilities you need.

 

Successful demand planning is quick, collaborative and up-to-date – not slow, siloed and full of stale data. It can’t take weeks to make critical decisions that don’t even align with reality. When changes to your demand plan happen, communication between business functions has to be immediate. Everyone needs to understand the ramifications of the change and come to a compromise-based corrective path.

 

The only way to do that is to have processes and technology that enable critical demand planning functionality like:

 

Forecasting: Stop chasing that perfect score. It doesn’t exist! You’ll never reach 100% accuracy. Instead, work to improve your forecasting by using a complete, accurate data set that includes information from across the organization – sales, marketing, finance, etc. You’ll get a more complete picture. And just as importantly, develop a supply chain that lets you plan, monitor and respond simultaneously and continuously. That way you’ll be able to spot trends, or get ahead of a problem, before your supply chain starts to feel the impact.

 

Segmentation: Balance complexity with efficiency and flexibility by segmenting your supply chain. You’ll be better equipped to meet shifting demand. Since segmentation doesn’t have a one-size fits all approach, weigh the demands of your customer base against corporate priorities and key performance indicators (KPIs). Then decide how to segment, basing your decision on factors like product complexity, market demands, manufacturing process or risk.

 

Collaboration: Make sure everyone’s playing the same game, on the same platform. Eliminate corporate silos to avoid fractured functionality and get everyone focused on the same end goal. That will help create a seamless, responsive supply chain. Don’t forget, the best demand plans are ones everyone has confidence in and include input from all stakeholders.

 

Technology: Go next-gen with your demand planning software. Pick a solution that gives you the ability to connect data, processes and people in a single system. The right technology for game-winning demand planning will provide end-to-end supply chain visibility, cross-functional collaboration, prescriptive analytics and some level of automation.

 

No matter who your customer is, or what you’re supplying to them, the growing number of potential combinations means your supply chain has to be ready to respond. When it comes to demand planning, you’ll need to be faster, smarter and more flexible if you want to outplay your competition.

 

Want to learn more about how you can level up your demand planning processes? Check out our latest eBook, Demand planning: 4 ways to outplay your competition.

 

The post Get your demand planning and forecasting game on appeared first on The 21st Century Supply Chain.

 

Demand planning: 4 ways to outplay your competition

 

Originally posted by Alexa Cheater at https://blog.kinaxis.com/2017/12/get-demand-planning-forecasting-game/

by John Westerveld

supply chain planning crystal ballTwenty-five years ago, I bought my first personal computer. One of the first applications I installed was a cookbook — the killer home PC application of the time. The second application was Quicken to manage my finances. Funds were tight then and I really needed to keep tabs on my spending.

 

Every transaction was meticulously entered, every statement validated against my records. Then I discovered the calendar function. With the calendar, I was able to schedule my known income (paycheck) and my known expenses (car loan, mortgage, utilities, taxes, groceries, etc.) and Quicken would project my bank balance into the future.

 

For me, this was game changing!

 

When making discretionary purchases, I could look at my projection to make sure that if I made that purchase, I would have enough money in the bank, not only now, but at the end of the month when my mortgage and car loan came out. It was my crystal ball, and I regularly asked it questions like:

 

What if I buy that awesome new 27″ Sony Trinitron television this week, could I still make my mortgage payment? What if I save my money this month? Or don’t go out for supper on the weekend? Then could I buy it?

 

Today’s supply chain professionals need a crystal ball, too. The only difference is that the decisions are much more complex and far reaching than balancing my finances.

 

For example, if a supply chain professional accepts a new order, can they deliver it on time? If they offer a promotion, can the supply chain support it? When should they shut down the line for scheduled maintenance, and what orders are impacted if they do it now?

 

If we think about traditional supply chain planning systems, they’re like balancing your check book by hand, which while necessary, is time consuming and error-prone. Planning systems, however, are not designed to allow you to ask ‘what if?’ questions.

 

Traditional supply chain planning systems have rudimentary scenario support — at best. Worse, once you have configured a scenario, understanding the impact of a change is very difficult given the silo-based data and the challenges of reporting from these systems. This tends to be why supply chain professionals are still forced to use Excel to model so many of the decisions they need to make. This isn’t to disparage Excel because it’s a great tool for many things — managing your supply chain just isn’t one of them.

 

If you were to design a crystal ball for your supply chain, what would it look like?

 

What capabilities would be needed to help you anticipate and eliminate risk in your supply chain? How would you answer some of those what-if questions posed above?

 

  • What-if planning

Most traditional ERP systems (if they support scenarios at all) limit them to either a subset of data or to a single scenario, significantly reducing the effectiveness of scenario planning.

 

Imagine having the ability to instantly create a scenario using a complete copy of all your supply chain data. You’d also be able to make changes to the scenario, and if necessary, create additional scenarios to further explore options and solutions. You also have the ability to understand the implications of the changes you’ve made to key corporate metrics, and finally, the ability to accept and implement those changes within the business process.

 

With all this, you would be able to make decisions based on real data, with a true understanding of the impact those decisions will have.

 

  • In-memory analytics

Supply chain decisions can’t wait. When a customer wants to place an order, you can’t tell them to wait for three and half weeks while you figure out if you can deliver it when they want. Traditional systems are slow because they use disk-based IO to store and retrieve data, which is why they must run batch processes overnight.

 

Imagine if you can store your planning data in-memory and use highly optimized analytics. Now you can assess the impact of a demand change across your entire supply chain in mere seconds.

 

How would this impact your decision making process?

 

  • End-to-End visibility

A supply chain is a collection of interconnected nodes. The problem is that with most large companies, these nodes were either managed as discrete units or were obtained through mergers and acquisitions. This means that a given company is often a mosaic of different ERP systems and versions. Changes in demand and supply are often communicated via system to system transfers, often with nightly batch job processing required at each node. A change can take days to work its way from one end of the supply chain to the other.

 

Imagine if the supply chain data from all these systems could be brought into a single environment. Within this environment, the analytics from each system could be emulated so that decisions made based on this data could be reliably executed in the host environment.

 

  • Collaboration

A supply chain is not a single person, it’s the combined effort of many. And in most cases, supply chain decisions can’t be made unilaterally. It takes the cooperation and agreement of several people to resolve issues and make decisions. Unfortunately, traditional ERP tools do a terrible job facilitating this interaction, leaving planners to rely on e-mails, phone calls, screenshots and again, Excel.

 

Imagine if the system helped identify the best person to collaborate with on a specific issue, then brought you together in a supply chain centric collaboration space within the tool. Then, as discussions occur and decisions made, these decisions are tracked and the impact of these decisions are displayed in a scorecard.

 

Now, let’s put this all in our supply chain planning system crystal ball.

 

Imagine you’re planning a promotion for a family of parts and that if successful, a 20 percent increase in demand would result. You create a new scenario within the tool and modify the forecast for the time period of the promotion. You instantly get visibility into a new supply chain risk associated with that change – an alert that’s a result of the demand planning system and supply planning system now reside in the same system, use the same software and share the same data.

 

Using interactive visuals, you can then drill into the data and identify a set of components and a production constraint that is causing the supply chain risk. You discover the issue is the components are at one plant and the constraint is at another. You can see this because data from multiple disparate ERP systems are brought together into a single view.

 

Next, you create a collaboration that brings together the responsible planners who can see the scenario you created and who add scenarios of their own. By sending messages using the built in collaboration tool, a couple of solution scenarios are proposed.

 

By bringing all of the scenarios together, you compare them against key corporate metrics and discover that one solves the issue with a minor impact to margin, while the other solves it by stealing supply from another product line.

 

Based on this information, it’s determined that the margin hit is acceptable and the decision is executed.

 

Total time? Hours.

 

Total time using traditional ERP planning? Days. And you still probably didn’t know for sure if that was the right decision.

 

How do you make supply chain decisions today? Comment back and let us know!

 

The post The supply chain planning system crystal ball appeared first on The 21st Century Supply Chain.

 

Get started with AI in SCP

 

Originally posted by John Westerveld at https://blog.kinaxis.com/2017/12/the-supply-chain-planning-system-crystal-ball/

by Trevor Miles

Much is being written about Artificial Intelligence (AI) and Machine Learning (ML) recently. It is the topic du jour. There is undoubtedly a lot of opportunity in this space for automating highly manual and repetitive tasks, and even for redefining tasks. But there is little evidence that we have even begun to explore the opportunity to redefine whole supply chain planning processes.

 

To be honest, I have some doubts about the use of AI or ML to assist significantly in this space. More importantly, there is compelling reason to rewrite many processes with or without AI/ML. Most supply chain planning process definitions date back to before the advent of computers. In fact, most organizational structures, which dictate the processes, date back to military concepts of communications.Process definition

 

I was prompted to write this blog based on an article published in Inc on Aug 30, 2017: This Email From Elon Musk to Tesla Employees Describes What Great Communication Looks Like. I will quote from the article quite liberally because there is a lot that Musk writes that is relevant to this discussion.

 

“There are two schools of thought about how information should flow within companies,” he writes. “By far the most common way is chain of command, which means that you always flow communication through your manager. The problem with this approach is that, while it serves to enhance the power of the manager, it fails to serve the company.

 

“Instead of a problem getting solved quickly, where a person in one dept. talks to a person in another dept. and makes the right thing happen, people are forced to talk to their manager who talks to their manager who talks to the manager in the other dept. who talks to someone on his team. Then the info has to flow back the other way again. This is incredibly dumb. Any manager who allows this to happen, let alone encourages it, will soon find themselves working at another company. No kidding.

 

“Anyone at Tesla can and should email/talk to anyone else according to what they think is the fastest way to solve a problem for the benefit of the whole company. You can talk to your manager’s manager without his permission, you can talk directly to a VP in another dept., you can talk to me, you can talk to anyone without anyone else’s permission. Moreover, you should consider yourself obligated to do so until the right thing happens. The point here is not random chitchat, but rather ensuring that we execute ultra-fast and well. We obviously cannot compete with the big car companies in size, so we must do so with intelligence and agility.

 

“One final point is that managers should work hard to ensure that they are not creating silos within the company that create an us vs. them mentality or impede communication in any way. This is unfortunately a natural tendency and needs to be actively fought. How can it possibly help Tesla for depts. to erect barriers between themselves or see their success as relative within the company instead of collective? We are all in the same boat. Always view yourself as working for the good of the company and never your dept.”

 

At the heart of Musk’s email is a challenge to existing company structures of command and control hierarchies. And Musk articulates the business impact very succinctly: “Instead of a problem getting solved quickly, where a person in one dept. talks to a person in another dept. and makes the right thing happen, people are forced to talk to their manager who talks to their manager who talks to the manager in the other dept. who talks to someone on his team. Then the info has to flow back the other way again. This is incredibly dumb.” In other words, Musk is talking about much leaner processes. And these changes do not require AI or ML. Notice that Musk is referring to email and human-to-human communication. He does not mention mathematics at all.

 

My challenge to Musk would be to change the organizational structures first and the process/communication challenge will resolve itself automatically.

 

Why is Musk’s email relevant to supply chain planning?

 

In reality, Musk’s email is all about information flow, and making this as short as possible. Notice that Musk isn’t talking about material flow through a factory or supply chain. Instead, he is talking about information flow through an organization, particularly when there is a business issue that needs to be resolved across several functional groups such as a large customer placing an unexpected order, a supplier going bankrupt, or a hurricane wiping out a large part of the supply for a particular commodity group.

 

Each of these situations requires rapid decision making across organizational boundaries within teams. Often in cases such as a hurricane, companies will form a ‘tiger team’ to analyze and resolve the issue. But once the crisis is over, the teams revert back to the traditional hierarchy and silos. And yet, these tiger teams contain all the aspects referred to by Musk, and they were formed specifically to overcome the issues highlighted by Musk.

 

As a practice, supply chains have spent a lot of time analyzing the flow of materials through a factory or supply chain. One of my heroes, George Stalk of BCG, wrote a seminal piece in 1988 called “Competing Against Time”. I have referred to Stalk’s work many times in my blogs because the key concepts simply do not fade in significance, and are only made more apparent in Musk’s email. Stalk sets out some Rules of Response very clearly:

 

  • The .05 to 5 Rule
    Across a spectrum of businesses, the amount of time required to execute a service or to order, manufacture, and deliver a product is far less than the actual time the service or product spends in the value-delivery system.
  • The 3/3 Rule
    During the 95 to 99.95 percent of the time where a product or service is not receiving value while in the value-delivery system, the product or service is waiting. (Stalk breaks this out into 3 components of waiting, hence the 3/3.) The amount of time lost is affected very little by working harder. But working smarter has tremendous impac
  • The 1/4-2-20 Rule
    For every quartering of the time interval required to provide a service or product, the productivity of labor and of working capital can often double. These productivity gains result in as much as a 20 percent reduction in costs.
  • The 3 x 2 Rule
    Companies that cut the time consumption of their value-delivery systems turn the basis of competitive advantage to their favor. Growth rates of three times the industry average with two times the industry profit margins are exciting – and achievable – targets.

Stalk describes both the costs and benefits of operating in silos, in the manner Musk described in his email. In supply chain, we have paid tremendous attention to the flow of materials through factories or the entire supply chain. But all too seldom do we sit down to analyze the process by which we plan for the material flow. These processes are stuck in the 1950s, and are based upon the organizational hierarchies we inherited even earlier than that.

 

Did I mention that getting rid of the silos does not require AI or ML?

 

So how then does this topic relate to AI and ML?

 

I attended the Constellation Research Connected Enterprise conference earlier this autumn and was very fortunate to hear Tricia Wang speak. I felt as if I had come home. For one thing, Tricia talks about “thick data” and contrasts this with “big data”. Thick data is all about defining new operating models and new business models. As Tricia states “your surveys and questionnaires have been designed to optimize an existing business model”, which is a big data approach. As Tricia states, “[Companies are] so focused on getting the right data to fit their models, that they never even bothered asking the right questions.” Tricia also commented on the manner in which decisions are made in organizations, which I could not resist tweeting:

 

 

 

And of course, this wraps all the way back to the email from Elon Musk. To be fair, the author of the Inc article states:

 

“There’s only one problem with Musk’s proposed solution: It’s extremely difficult to cultivate in the real world.”

 

But that is only because we have been conditioned to operate in hierarchical command-and-control organizations. Let’s not forget that digitization is not the same as digital transformation. AI and ML are the former. I’m talking about the latter, which I think is a lot more interesting.

 

The question of course is what is meant by digital transformation. I think the terms transparency and visibility are over-used and don’t go far enough. The Sloan Management Review has a comprehensive discussion “The Nine Elements of Digital Transformation” published four years ago. Interestingly, the article breaks digital transformation out into three buckets:

 

  • Transforming Customer Experience
  • Transforming Operational Processes
  • Transforming Business Models

In this context, I’d like to focus on the operational processes. After all, that is at the heart of Musk’s email. But it is in the section of business models that they make the point in which I’m most interested:

 

Companies are not only changing how their functions work, but also redefining how functions interact and even evolving the boundaries and activities of the firm.

 

In the section called Worker Enablement they state that:

 

The tools that virtualize individual work, while implemented for cost reasons, have become powerful enablers for knowledge sharing. Salespeople and frontline employees, for example, are beginning to benefit from collaborative tools in which they can identify experts and get questions answered in real time. They are also increasingly gaining access to a single, global view of the company’s interactions with a customer.

 

But it is to Tricia Wang and others that I turn for pithy statements. I asked on Twitter how several analysts would distinguish between digitization and digital transformation, to which Tricia replied:

 

A lot of companies treat digital as if they are “doing digital” – this is “digitization” at its worst – as if it’s some checklist of things to do. It’s very transactional, and people are so busy doing digital they don’t even know WHY they are doing it in the first place!

 

Whereas companies that embrace “being digital” – this is “digital transformation” at its best – it’s a total paradigm shift in the culture and operations – it’s not just about buying the latest digital tool, but about creating a new system, new cadence, new mindset.

 

Amen to that.

 

What’s the role of Kinaxis?

 

Our purpose at Kinaxis is to revolutionize supply chain planning for all the reasons outlined by Musk and described by Stalk: because it makes sense. While undoubtedly we need all the mathematics that has formed the basis of the individual supply chain planning functions such as demand, inventory, and capacity planning, it is how the functions are linked that defines the processes, and where the opportunity lies for digital transformation. Applying yet more mathematics or AI/ML algorithms may make individual functions more efficient, which is what Tricia Wang describes as “doing digital”, but doing so will not make the overall process of supply chain planning and response management more effective. That is the prize.

 

We have long described the value of Concurrent Planning, which is our term for the digital transformation of supply chain planning, in our tag line of “Know Sooner. Act Faster.” One of our customers, Atul Tandon of Mylan, described the result of digital transformation best to his senior team when he said:

 

Two to three years after deploying RapidResponse we will no longer have demand planners, and capacity planners, and inventory planners, and material managers. We will just have network planners.

 

That is what digital transformation looks like, and how we achieve this is by connecting data + process + people:

 

  • Data: Until you have the data connected, you don’t even know that you have a problem.
    • We do this with a single data model that spans the supply chain across multiple ERPs and functions.
  • Process: Until you have the processes connected, you don’t know the scale of the problem because you cannot calculate the knock-on effect on other areas of the supply chain.
    • We do this with a single set of very fast in-memory analytics and scenarios that give a “before” and “after” picture.
  • People: Until you have the people connected, you have no-one to take action and no team to resolve the issue in “earth time”.
    • We do this by codifying self-declared responsibilities and providing an in-context adaptive collaboration capability.

SCM World Concurrency ModelSCM World, a division of Gartner has described the future of supply chain planning in a white paper titled “Concurrency”, in which they outline the core capabilities required for Concurrent Planning. In the white paper they state:

 

One benefit of democratizing decision-making is that the ability to simulate various scenarios can be distributed across the entire organization. … Further, the democratization of decision making will equip all areas to better understand the end-to-end financial impacts of decisions and, therefore, make more informed trade-offs.

 

These capabilities are available and deployed today.

 

Like everyone else, Kinaxis has active projects in AI and ML. These projects in isolation would be “doing digital”. However, when coupled with the concept of Concurrent Planning, we are enabling our customers to “become digital”.

 

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Originally posted by Trevor Miles at https://blog.kinaxis.com/2017/12/digitization-is-not-the-same-as-digital-transformation-and-ai-cannot-help-supply-chain-planning/

by Bill DuBois

Supply chain planning - data integrityEvery business plans, but not every business runs as planned. Delays, shortages, quality issues, catastrophic weather events and fluctuating commodity prices are just a few examples of the exhaustive list of worries that will throw plan into disarray. Achieving a realistic forecast and aligning supply plans is an extreme long shot at best. The best supply chains need to manage business when it’s not business as usual. That’s what sets them apart.

 

However, even the best supply chains struggle with a recurring issue – data integrity. The alignment of demand and supply is more difficult because most, if not all, supply chains have data integrity issues. That means even if you take away all the supply chain disruptions, your plans are off before you even get started.

 

Successful supply chain planning starts with data

Setting yourself up for successful planning starts with your data. What could arguably be the single biggest deterrent to undertaking a supply chain planning improvement project is, “my data is crap.” Even though it’s likely true, you’re using the current state of your data to plan, and there’s still value in that. Data integrity shouldn’t be the reason not to take on a process improvement initiative, it should be a part of any supply chain planning improvement project.

 

Why the data issues?

Like the supply chain disruptions listed earlier, there are just as many reasons why data accuracy is as difficult as maintaining forecast accuracy. Here are the big reasons:

 

  • First off, there is just a lot of data. Depending on your company, you’re likely looking at record counts in the millions or billions. In addition, these record counts are never static. With that amount of data, something is going to be off.
  • New data sources. With mergers and acquisitions, new data sources are added along with the data in these systems. Depending on the system and processes inherited with the new source, data issues could be significant.
  • Product proliferation. Product innovation means new products being added and older versions or products becoming obsolete. One data slip and you could be planning to the wrong revision of a product.
  • New supply chain relationships. Establishing new customer or supplier relationships brings with it all the data elements like order policies, cost and lead times, all of which are error prone.
  • Things change! As we all know, when it comes to supply chains, things change. Planning parameters set today may not be what’s required tomorrow.

For these reasons, it’s wise to have a plan of attack against data integrity issues.

 

What’s wrong with data?

The low hanging fruit of data integrity issues is simply missing data. Standard costs, bill of material records like quantity per, safety stock or order policy information are all typical records that may be left unattended for any of the reasons mentioned above. Missing a lead-time or quantity per record means your plan will be wrong no matter how good your planning processes are.

 

Speaking of being wrong often, even if the field is populated the number can be wrong. With fractured data systems, data elements may be different in each system and it can become a challenge to know which one is right. Yield and scrap factors will change as manufacturing processes improve after first runs of a part. You may set a Kanban policy based on current demand patterns, cycle times and lot sizes, but if any of these factors change, like demand, Kanban policies could be driving excess or shortage conditions. You may also have order status details that are not up to date, one of the most common being completed orders not closed. For these reasons, cleansing data isn’t a one-time event.

 

What’s the data integrity plan?

  1. Shine a light on the problem. There are companies that have found a way to interrogate their data with standard data integrity processes, views and metrics. It’s important to be able to identify and prioritize data cleansing efforts. One company had a “top 10” view into data cleansing priorities. They knew they couldn’t fix all of them, but were able to sort based on revenue impact or customer to ensure the highest priority issues were addressed first. Because you need to be able to look at all data across the entire network, one source of the truth will be invaluable.
  2. Continually monitor your data. Some data anomalies may be less obvious to spot and slowly come to a boil rather than explode on the scene. Actual lead times may trend away from planned lead times, so it’s important to get notifications when planning parameters may need to be reviewed and adjusted. In these types of situations, it would be difficult for a planner to spot the trend and will make a strong use case for some machine learning.
  3. Use scenario planning. When it’s time to set or modify data like planning parameters, it’s beneficial to be able to test the results of changes to planning data. Planning parameters impact each level of the supply network and the compounding effect on demand, supply, capacity and inventory can be staggering. Testing the impact of data changes will not only let you set more realistic performance expectations, but will also put out some fires before they start.

Data integrity challenges are not going anywhere anytime soon. Recognizing there will always be issues and that data cleansing is a continual process is the hardest part of the battle. Let us know if you’ve taken any unique approaches to solving your own data issues.

 

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Originally posted by Bill DuBois at https://blog.kinaxis.com/2017/12/data-integrity-bad-data-3-good-things-supply-chain-planning/

by Alexa Cheater

TrinityRail Supply chain managementSupply chain management without an operational forecast – is it possible?

Yes. Yes it is. At least if you’re one of the world’s largest providers of railcar services and products. TrinityRail, part of Trinity Industries, Inc., ditched operational forecasting in favor of a sense and respond supply chain, and the results speak for themselves.

 

As outlined in a recent Kinaxis case study, TrinityRail was able to realize sizable improvements in its supply chain, including nearly removing its reliance on Excel for planning and dramatically reducing the need for manual data transfers. Using supply chain management software that connected its data, processes and people into a single, harmonized system, TrinityRail reduced the risk of error, since everyone was using the same, up-to-date data set. It was even able to reduce its days of inventory on-hand (DIOH) by an average of 12 days and reduce its buyer team by more than 25% while still improving the on-time delivery (OTD) of inbound materials.

 

Dealing with a complex, make-to-order environment

“Rather than trying to get better at forecasting, we decided just to figure out how to live without one [a forecast],” explained Mike Hegedus, Vice President Supply Chain Management, Trinity Industries, in the case study.

 

That bold decision came on the heels of a supply chain transformation project that highlighted how simulation was the better goal than optimization for their unique supply chain. TrinityRail needed to have the available capacity to meet lead-time demands on products with a 30 to 50 year lifecycle and a two to three year backlog at any given time. It’s increasingly complex manufacturing environment—every freight railcar is configured to unique customer specifications—made accurately forecasting demand a near impossible feat.

 

TrinityRail used rapid scenario simulations, robust exception management, enhanced visibility and collaborative planning to remove operational forecasting and change the very culture of how the company works. Now TrinityRail works by focusing on action, not anticipation, and has discovered how to operate “on the edge of control” without sacrificing results.

 

Want to learn more on how TrinityRail ditched its operational forecast and developed a more robust sense and respond supply chain as a result? Check out the full case study, Where’s the easy button? Enabling a Sense and Respond Supply Chain.

 

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Originally posted by Alexa Cheater at https://blog.kinaxis.com/2017/12/trinityrail-ditches-operational-forecasting-gains-sense-and-respond-supply-chain/

by John Westerveld

Supply chain visibility growthI came across a KPMG study last week covering a survey of 360 senior executives Forbes Insights did in 2016. There were a couple of key takeaways from the report:

 

  1. Manufacturers are planning on growth, but the overall market isn’t likely to grow. This means companies will need to battle for a bigger piece of the pie.
  2. The need for supply chain visibility is greater than ever, yet only half of the executives surveyed say they have the visibility they need to make decisions and mitigate risk.

Let’s dig into both of these highlights a bit more.

 

Growth within a static market

 

According to the study, most companies are planning to grow by entering new sectors, new geographic areas or by adding to the products and services on offer. The challenge is that other companies are looking to grow (73 percent of companies say growth in the next two years is a high to extremely high priority).

 

“Every company wants profitable growth. But according to our data, today’s manufacturers are much more focused on driving new growth than ever before.”

 

At the same time, baseline growth is expected to be limited. This means that for your company to be successful, you’ll need to outperform the other companies vying for the same market share. Your supply chain plays a key role: getting your product to market with excellent quality, in the quantity needed, at the right price, with the right design.

 

Supply chain visibility

 

This is actually tied to the first point. If you suffer a supply chain failure, you are potentially opening an opportunity for your competitors to steal market share. The study frames this around the need to identify supply chain failure risk factors.

 

“With much now riding on their supply chain’s ability to meet new demands and growth expectations, many are increasingly worried about an unexpected supply chain failure.”

 

Supply chain failure can be anything from a significant quality issue (exploding phones anyone?), to a supplier not able to meet a shipping deadline, to a factory being shut down due to geopolitical issues, labor disruptions or (more frequently it seems) natural disasters. According to the study authors, the key to mitigating the risk of supply chain failure is visibility across your supply chain.

 

“The best way to reduce the risk of supply chain failure is by achieving greater visibility, and managing it cross-functionally deeper into the end-to-end supply chain,”

 

We aren’t talking about a crystal ball, here. I’m not aware of offerings from any supply chain software vendor that can predict when a strike will occur or when the next hurricane will shut down production. However, when those events do occur, having software that provides true end-to-end visibility of your supply chain can mean the difference between maintaining, or gaining, market share, or not.

 

So what does end-to-end visibility mean? It means a single system that:

 

  • Brings data in from multiple disparate systems into a single view. How many ERP systems do you have in your supply chain? Sites that were introduced through mergers and acquisition often run different ERP software. How do you bring that planning data together?
  • Emulates the analytics within each of those systems so that when you view the data together, the results align to the results you would get from each system.
  • Allows users to create and evaluate as many scenarios as they need to effectively anticipate and resolve supply chain issues.
  • Senses and responds to supply chain events. Sensing not just an event, but through the power of the interconnected analytics, understanding that the event will have an impact on inventory, customer service, revenue and/or margin.
  • Allows for collaboration between users across the extended supply chain to effectively respond to supply chain issues when they occur. This means not just knowing what part is at risk four levels down your supply chain, but WHO to work with to resolve that risk…and facilitating the discussion to drive to a solution.
  • Presents data from across the supply chain in a logical, understandable and customizable format so the data becomes actionable information.

You and your competitors are going to be battling to grow while baseline growth is limited, meaning you’ll need to tackle new markets, new geographies, new sectors and new products. The key to making this happen is a supply chain that’s capable of supporting that growth. A supply chain that’s flexible can react quickly to changing demand signals and can sense and respond when events happen.

 

How is your supply chain positioned today? What steps have you taken to better prepare your supply chain? Comment back and let us know!

 

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Originally posted by John Westerveld at https://blog.kinaxis.com/2017/11/supply-chain-visibility-key-growth/

by Iman Niroomand

Football - demand planning and forecastingWhat does a machine-learning (ML) algorithm have to do with the Super Bowl?

 

When it comes to forecasting and demand management, a lot.

 

Consider this: According to the National Retail Federation, approximately 189 million people watched Super Bowl LI, and viewers spent an average of $82.19 on electronics, apparel and food specifically for the game, up from $77.88 compared to the previous year.

 

For events like the Super Bowl, retail demand planners create forecasts using data from a variety of sources to adjust product demand profiles in anticipation of which product, or group of products might be in demand the most.

 

This is a daunting task when one considers the variety of products available to football fans – from cheeseheads to cheezies and everything in between. In the past, only about one brand in 50 was able to precisely adjust their football-frenzy driven supply chain to meet demand during the short two-week window between the conference championship games and the Super Bowl.

 

The ability to forecast the uplift in demand reliably to guarantee consumer product availability and to evaluate the economic returns on the promotions has largely been a dark art. Without improved technology, very few companies can plan effectively in a promotion-heavy environment to help people jump on the Tom Brady bandwagon with an authentic Patriots jersey.

 

That’s where ML comes in.

 

In recent years, the ML algorithms have become more sophisticated, using data visualization to help subject matter experts determine the meaning of the results. Previously, when left without interpretation, ML algorithms produced data without context, providing no clear conclusion.

 

However, ML is advancing, refining models to determine correlations between data without human interaction. As more data enters the system, the system becomes more intelligent and the data becomes more manageable and subsequently, easier to interpret.

 

This type of analysis has applications beyond the football field, easily extending to science and engineering, and to fraud detection, genetic analysis and finance, just to name a few.

 

But back to football. Unleashing a machine-learning algorithm on the Super Bowl assists planners by helping them adjust to unpredictable product demand just by digging through historical data. To find the right correlation, the ML algorithm classifies products by similar event type, helping retailers strike the right balance with suppliers to ensure that giant foam finger gets to its destination on time.

 

By integrating ML algorithms with a decision support system, prescriptive analytics gives decision makers timely recommendations of which product or product types to focus on for the event, reducing “what-if” analysis.

 

For the supply chain practitioner, leveraging ML to help with demand planning and forecasting, and take advantage of opportunities like the Super Bowl, this is their “I’m going to Disneyland!” moment.

 

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Originally posted by Iman Niroomand at https://blog.kinaxis.com/2017/11/forecasting-demand-management-new-events-using-machine-learning-algorithm/

by Mike McAllister
Stranger Things
Courtesy of the Science Museum of Minnesota/Netflix

As a teenager in the 80s, it probably comes as no surprise I relate heavily to every cultural reference in Stranger Things. From the hair (I coveted to Steve’s A-Ha inspired coif) to the arcade (DigDug not so much – I would spend my allowance quarter by quarter on Star Castle and Defender, instead) and everything in between, the binge-watch worthy Netflix series contains pop culture Easter eggs in virtually every scene.

 

Which brings us to Dustin’s purple brontosaurus hoodie from Episode 1 of Stranger Things 2 – apparently purchased at The Science Museum of Minnesota, perhaps while on a road trip with his mom during the summer between season one and season two. This seemingly innocuous vintage piece of costuming features the logo of a popular touring fossil exhibit popular in the 80s known as “Thunder Lizard”.

 

Picking up on the appearance of their brand on the show, the museum scrambled to add the hoodie to their online and brick and mortar store. Smart move. Why not capitalize on the most anticipated release of the fall entertainment season?

 

However, it quickly became clear the museum lacked proper capacity planning and wasn’t prepared for 80,000 purple Thunder Lizard hoodie orders in a single day. The crush of Stranger Things fandom-born conversions temporarily brought the museum’s website to its knees while an out-the-door lineup cleaned out on-site inventory.

 

Unless the museum enters in to some sort of exclusive product placement agreement for season three, it’s unlikely they’ll ever have to deal with such a gift shop feeding frenzy again. But if they do manage such a marketing coup, they may want to consider implementing modern supply chain must-haves, such as scenario simulation to look for alternate ways to deal with supplier and capacity constraints.

 

After all, Thunder Lizard hoodies don’t grow on trees. Concurrent planning for demand might sound optional, but when the people want their hoodies, who’s to argue?

 

And while we’re on the subject of product placement, the Hawkins National Lab could probably use RapidResponse to better plan for the invasion of those pesky demodogs.

 

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Originally posted by Mike McAllister at https://blog.kinaxis.com/2017/11/stranger-supply-chain-things-capacity-planning-lessons-stranger-things/

by Dr. Madhav Durbha

BitcoinThese days, not a single supply chain conference I attend goes by without someone mentioning Blockchain. Given the growing chatter, I wanted to share my views on the topic. In fact, my interest in Blockchain further increased as I started dabbling in Bitcoin, an application of the Blockchain technology.

 

As per Wikipedia, a Blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Bitcoin is a form of decentralized digital cryptocurrency, not controlled by any nation or issuing bank.

 

Launched in 2009, Bitcoin was initially written off as a scam or fad. However, to the surprise of naysayers, Bitcoin did survive and is thriving, building quite a following. Here are some factors that are making Bitcoin a very attractive proposition, which are a direct result of the underlying Blockchain technology:

 

  1. Secure encrypted transactions ensuring privacy of the involved parties: Through a combination of public and private key encryptions facilitated by Blockchain, Bitcoin provides a virtually hacker-proof way of making and receiving payments. This is quite fascinating considering the code behind Bitcoin itself is open source. In a Blockchain, each transaction is recorded to a “block” across a large number of distributed systems. This transaction is then authenticated by each node in the network and is facilitated by individuals like you and me, who are referred to as “miners” in the Bitcoin world. Once recorded, the transaction cannot be altered, and it forever resides in a public distributed ledger that’s shared between the network nodes. The identity of the sender and receiver are protected through the encryption mechanisms. Not surprisingly, some of the early adopters of Bitcoin were those dealing in illegal goods and drugs through the now defunct Silkroad, online marketplace being the most prominent. While any technology can be put to both good and bad use, supply chains require a high degree of privacy and security to ensure validity of transactions for perfectly legitimate reasons – which Blockchain can enable.
  2. Disintermediation of non-value added links and enablement of frictionless transactions: Bitcoin initially built an enthusiastic following among a group of privacy activists known as cypherpunks holding libertarian ideals, who wanted to decouple money and monetary policies from the influence and the reach of governments and central banks. Because Bitcoin transactions happen directly between sender and receiver, and are authenticated through other nodes in the network, no bank or middleman takes a cut in the process. Settlements are relatively quick compared to the latency associated with funds flowing through the traditional banking system (especially for international transactions). Aside from the few countries that have banned the use of Bitcoin, its appeal is universal as you don’t need to continually exchange it into different currencies as the money crosses borders, making transactions frictionless and eliminating fees. In a very provocative recent blog, author Magnus Lind makes some excellent arguments on how financial supply chains can learn from improvements in physical supply chains by organizing disjointed financial links into one uninterrupted chain. The design principles of Blockchain will be essential to such efficient financial supply chains.
  3. Blockchain is here to stay: For any currency to sustain, those carrying and transacting in it should feel confident in its value. Bitcoin is very volatile and is still considered more a speculative investment than a currency itself. However, if the trend to-date is any indication, Bitcoin is here to stay for the foreseeable future. As opposed to government issued fiat currencies that can potentially have unlimited supply as money can be printed by the government mints, Bitcoins, by design, cap out at 21 million coins. This limited, predetermined supply is another reason why Bitcoin is seeing increased demand. Regardless of the future of Bitcoin, the traction it has gained to date is a true testimonial to the potential of Blockchain.
  4. Strong network effects: As word spreads, more players are jumping on the Bitcoin bandwagon, causing a strong network effect that’s increasing the use and circulation of Bitcoin as a commodity, if not as a currency. The likes of Marc Andreessen and the Winklevoss twins invested in Bitcoin focused startups, lending more credibility. It has reached a point where major financial institutions, after brushing it off as a passing fad, are now taking Bitcoin and other cryptocurrencies seriously, as evidenced by the Blockchain groups that are now active in their organizations. The likes of Bill Gates, Elon Musk, Richard Branson and other business leaders are taking sides on the Bitcoin debate, furthering the network effect.

All this said, there is no Bitcoin without Blockchain. A Blockchain offers the potential to revolutionize the information and financial flows associated with material movement when it comes to supply chains. There are plenty of industries — such as pharmaceuticals — where the traceability of a drug is of extreme importance due to regulatory issues, as well as the need to mitigate the risk of counterfeit drugs entering the supply chain. Having a fully verified ledger of transactions that maintains end-to-end traceability could be an attractive proposition. Of interest, IBM, Unilever, Nestle, and Walmart have announced a collaboration in using Blockchain to trace food contamination. Just as I was writing this blog, I came across this very interesting post by Michael Casey on how Blockchain can turn supply chains into demand chains, elaborating on some other interesting use cases.

 

While from time to time I come across articles such as this, I have yet to see large scale, economically viable and proven use cases for Blockchain in supply chain, as significant challenges remain for mainstream adoption of Blockchain in supply chain. Interoperability standards for transaction recording need to be defined, which needs to start with a large player such as a channel master or a consortium. Perhaps the aforementioned collaboration between the consumer packaged goods (CPG) and retail giants is a good start. Cost of enabling a Blockchain is a significant consideration as well…. more so for enabling a “private” Blockchain.

 

Things will eventually change, and when it comes to digital technologies, it always seems to happen quicker than we think. For example, when I started my career in the late nineties, I had better technology available at work than at home (high speed internet at work vs dial-up modem at home). However, after the advent of the iPhone and the launch of Appstore, consumer tech hit an inflection point with corporations following suit. The digital collaborative applications we now use at work had their origins in the consumer domain. Bitcoin is just one shiny (at the moment anyway, and no pun intended!) application of Blockchain that had its start in the person-to-person (P2P) domain. The supply chain will follow– sooner or later. If you are a supply chain professional, dabble in experiments and learning pilots if you can afford them. If not, at the least start by researching into what Blockchain can offer.

 

What do you think? How quickly do you see Blockchain impacting the supply chain? Comment back and let us know.

 

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Originally posted by Dr. Madhav Durbha at https://blog.kinaxis.com/2017/11/optimists-view-blockchain-supply-chain-learnings-bitcoin/

by Alexa Cheater

out-of-this world supply chainMesmerizing. Motivating. Magical. That’s how best to describe the experience of hearing famed Canadian astronaut and former commander of the International Space Station (ISS) Chris Hadfield address the crowd at Kinexions, our annual user and training conference.

 

Hadfield’s inspiring presentation focused on preparedness, failure and what it takes to blast into the future. While not speaking directly on the topic, his presentation was full of revelations and pearls of wisdom you can apply directly to your supply chain.

 

  1. “When you do it the first time, you’re going to get it wrong.”

No one gets it perfect on the very first test flight. NASA didn’t. Just look at the Vanguard TV3, the space agency’s first attempt at launching a satellite into orbit. Two seconds after leaving the launch pad at Cape Canaveral, the rocket came crashing back down and exploded. It had only reached a height of about four feet.

 

If NASA can’t blast it out of the atmosphere on its first attempt, what makes you think your supply chain can? The expectation of immediate perfection is particularly relevant when implementing process or technological changes. These things take time, effort and persistence, but you can’t give up. Trying something new within your supply chain may seem like an exercise in futility, but it you stick with it, you’ll soon find yourself soaring above the stars – and your competition.

 

  1. “Almost everything in history probably wouldn’t work.”

Light bulbs, cars, computers – and yes, even spacecraft, were all impossible dreams at one point in time. Yet here we are, more reliant on these “impossible” inventions than ever before. Don’t let naysayers convince you innovation and change within your supply chain isn’t realistic.

 

The impossible is possible, even within your supply chain. As Hadfield says, you just need to stay focused on your vision and work every day to move that needle toward reality.

 

  1. “Things will never be this slow again.”

We’re at a turning point in history. New inventions and innovations launch every day, affecting our lives in ways we never imagined. The speed at which technology evolves will only increase. As Hadfield notes, that rate of change is only going to get faster and faster.

 

For your supply chain, that means if you’re still using outdated, legacy planning solutions, you’re about to fall even further behind. Now is the time to take those next steps and not only get up-to-date with your capabilities, but push beyond and start looking at the technology capabilities of the future.

 

  1. “Launch is the toughest ride, but once it’s over you become weightless.”

Explaining what it’s like to be strapped to a rocket blasting off for outer space, you can easily apply this quote of Hadfield’s to supply chain technology implementation and deployment. The road to successful deployment is often more turbulent than expected, but don’t let that initial phase deter you. Once you’ve overcome that rocky stretch, the rewards will be well worth the effort as you start to see efficiency, profitability and collaboration across your supply chain.

 

  1. If you don’t have self-doubt, you’re about to blow your rocket up

Even astronauts have self-doubt, and according to Hadfield, that’s okay. Self-doubt is what helps you be prepared for the unexpected. If you experience self-doubt when it comes to supply chain planning, use it as an opportunity to explore what’s causing that doubt, and figure out what you can do to reduce it. It could be altering processes, using new data inputs or even just communicating and collaborating with colleagues outside your planning function to ensure everyone’s on the same page.

 

  1. Don’t wait until you walk on the moon to celebrate

Success doesn’t happen overnight. It comes in stages, and Hadfield makes sure he celebrates every single one because it’s important to recognize the milestones your supply chain takes on its trajectory toward excellence. Otherwise you’ll get too caught up in only focusing on the end of the journey (if there even is such a thing) and not all the great achievements and improvements you made along the way.

 

What other great pieces of supply chain advice have you received? Let us know in the comments section.

 

The post Six pieces of out-of-this world supply chain advice from astronaut Chris Hadfield appeared first on The 21st Century Supply Chain.

 

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Originally posted by Alexa Cheater at https://blog.kinaxis.com/2017/11/six-pieces-world-supply-chain-advice-astronaut-chris-hadfield/

by Andrew Dunbar

S&OP journeyLast week I attended the IBF Business Planning, Forecasting & S&OP: Best Practices Conference in Orlando, Florida. If you’re involved in your company’s sales & operations planning processes and you haven’t heard of the IBF, stop reading now and go check them out here! These guys bring supply chain rookies and the best-of-the-best together to talk forecasting and S&OP in a variety of different forums throughout the year.

 

This year’s conference was a great opportunity for me to talk with demand planners and other supply chain practitioners about their S&OP journey, and the common pitfalls along the way.

 

A big theme of the conference this year was that to be effective with S&OP, it’s important to focus on three pillars of success:

 

  1. People – It’s important to continually invest in your people to generate a competitive advantage because you rely on them to be the care-takers of your supply chain.
  2. Processes – Best practices in supply chain are continually evolving, but you likely face unique challenges in your business that require innovative solutions.
  3. Technology (enabler) – It’s tough to compete against your competitors’ supply chains without an advanced analytics tool designed to enable the S&OP process.

I couldn’t agree more, as today’s supply chains are only as good as their weakest link. However, there was a sub-theme I heard a few times that had me concerned for the success of my peers as they undertake their supply chain journey, and it had me scratching my head. Several practitioners (some in senior roles at their organizations) mentioned that advanced software solutions are a necessary evil, but that you need to figure out your people and your processes before you can select the right software enabler for your company.

 

While I agree you need to understand your destination before selecting a software (what problems are you trying to solve?), any time spent on people and process development without a defined ‘technology enabler’ in mind is sub-optimal…

 

To illustrate my concerns, imagine that at the end of the conference, I’m in Orlando and I’m trying to decide how to make the 1400 mile journey home to Ottawa. Now, there are lots of ways to make that journey, and who’s to say which way is the right way for me? Let’s imagine some what-if scenarios to think through how I would invest in my skills and build processes if I knew in advance the technology I’d use on my journey.

 

Scenario 1: I walk.

 

In this scenario, I choose to use the travel tools most familiar to me – my 1986 “Chevrolegs”. I’m going to be spending a lot of time outside so I’ll need to brush up on my wilderness survival skills, and I’ll need a strong navigation process that can help me source things like food and water along the way to sustain me on the journey. I’ll also need to invest in sunscreen, some matches and other camping gear, some high-tech outerwear and a large backpack that can carry enough food to get me between supermarkets. If I can convince my boss to cover expenses for this 50-day journey (that’s a lot of meals), I’ll arrive back in Ottawa with the survival story of a lifetime to share with my friends at next year’s IBF conference.

 

Scenario 2: I drive.

 

Preparing myself for this 2-day road trip will require a license to drive the vehicle, some insurance to protect myself and others from my high-risk technology, and a trip to the corner store for a couple bottles of 10-hour energy. I’ll need navigation processes and some companion tools (like Waze) to help me refresh and refuel along the way, and I’ll probably want some new tunes to reduce the monotony of the journey. My biggest investment will likely be in gas. I’ll arrive home bored and exhausted, satisfied with my success, but left wondering if there’s a better way to do that next time.

 

Scenario 3: I fly

 

This scenario requires me to obtain a passport, learn some airplane etiquette, and tightly roll everything I own into tiny tubes so I can fit the mandatory Disney toys for the kids into my carry-on. Since this three-hour journey requires very little focus on my end, I can catch up on Netflix or write a blog for Kinaxis. This scenario has the highest sticker cost, but the shortest travel time. There are also millions of fellow travelers in the community posting tips and tricks to help me maximize my experience with this travel method. I arrive back in Ottawa and catch an Uber so quickly I barely notice how inappropriate my shorts and t-shirt are for the sudden weather change.

 

As you can see, each scenario requires me to invest in different skills and processes to make myself successful with the chosen technology. This may seem like a bit of an exaggeration, but as a supply chain leader, can you expect your people to invest in the right training and develop the right processes without knowing the technology they’ll be supported by?

 

These three pillars – People, Processes, and Technology – are all equally important, and I would argue it’s impossible to succeed in today’s competitive world without a focus on the combined value of all three.

 

Left without guidance, you might end up with your top demand planner showing up at the airport with a book of matches and a can of gas hoping to catch a flight. Now that can’t be good for anybody…

 

What do you think? Do you agree you need to select your enabler early on in your journey or should you hold off until you have more of the process figured out? Share your own examples of what has worked well or failed admirably in your S&OP journey.

 

The post The sales and operations planning journey: Starting off on the right foot appeared first on The 21st Century Supply Chain.

 

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Originally posted by Andrew Dunbar at https://blog.kinaxis.com/2017/11/sales-operations-planning-journey-starting-off-right-foot/

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