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21st Century Supply Chain

1,015 posts
by Tom Gregorchik

De-segregating the supply chain: Lessons learned in the airI remember while traveling last fall getting that dreaded alert we all hate see on our iPhones. “Flight Delayed” is how the first few words of the text message read. While travelers running late and those hoping to get free vouchers on overbook flights cheered, I went into a mode of figuring out quickly what the best course of action was for me to ensure I got where I needed to be.

 

I was traveling from Northwest Arkansas airport (XNA) back home to Washington Reagan (DCA) and this alert put me into panic mode because I had to be at my home office for an important customer call the following day and knew there were limited flights available. My original plan had been to leave XNA in the afternoon, connect in Chicago, and arrive back at DCA in the late evening. Now, I had to figure out how to still make that possible.

 

On my phone, I was able to open up the airline app to determine where all inbound airplanes were and whether they were on time. By tapping on flight statuses between my source and destination locations, I looked for other flight paths with different connecting cities to see if I had any alternatives. I was even able to view seat capacity to see if it was even feasible for me to get on those flights.

 

I was able to look at any available hotels in the connecting cities in case I got stuck somewhere overnight and needed to take my customer call in the morning in that location before flying home. And best of all, I was able to quickly gauge pricing of all of those alternatives as I went through them. After about eight minutes of evaluating multiple scenarios, I was able to choose the best plan. Since that experience, I find myself always looking at my flights and inbound aircraft so I can know sooner if there is a potential issue with my plans. Luckily, I’ve gone a long time without any major delays (although I’m pretty sure I just jinxed myself with that statement!).

 

It started to connect with me that travel in today’s day and age relates to many people’s approach to supply chain—both involve many moving parts. There’s supply of airplane seats, planes, and routes.  There’s a supply and demand of hotel rooms. There’s rental cars (and now Uber and Lyft). Thinking back to when I started my career as a supply chain consultant, the travel industry has come a long way with technology to support the traveler. And so has the supply chain.

 

Thinking about my flight disruption between Northwest Arkansas and Washington Reagan, in the past I would have had to deal with multiple calls to airlines (while likely being on hold for a while) and then more calls to hotels to find an available room within the company budget. Back then, there was some technology available to help, but it still involved a lot of leg work to accomplish your travel goals. Today, any traveler can leverage their smart phone as a single solution with multiple applications to solve their initial problems and react faster when problems arise. The modular problem of the travel industry has been eliminated.

 

So just as the module problem was eliminated within the travel industry, imagine a world where supply chain management has a similar type of solution. There have been modular solutions to solve for demand planning, supply planning, master production scheduling, inventory optimization, and sales and operations planning. Just like you had to make phone calls to multiple places to pick an airline and compare costs and times, those supply chain modules only solved a single problem at a time. They solved that single problem well, but over time, the travel industry, like the supply chain industry, has become more complex. Now travel suppliers are leveraging new platforms to build applications to help reduce costs and improve customer service for both the company and the customers. It is a win-win for all involved as they migrated to this new technology that operates as a single solution.

 

Imagine what would happen if your demand planning, supply planning, capacity planning, and executive team were able to collaborate on a single solution in a similar manner as you leverage your smart phone for your travel. The supply chain industry has traditionally lagged behind travel in this respect, but advancing technology has finally allowed an opportunity to catch up. Eliminating a module approach to supply chain management entails using a single platform to connect your data, processes and people. It means fostering more collaborative communication, and providing a centralized and harmonized data hub to allow rapid scenario simulation in seconds. Just think about how much more effectively you’d be able to manage all those unexpected occurrences with a single solution that offered that type of functionality? You would be able to eliminate modules, de-segregate the supply chain, and improve your ability to execute change efficiency.

 

And for all of those wondering what happened to my travel dilemma, it was a success as far as I was concerned. Within my eight minutes on my phone evaluating alternatives, I found an alternative flight from XNA to DCA that connected through Houston. I was able to execute my plan within a few minutes on the phone with the airline’s customer care, have my boarding passes updated directly on my iPhone and made it back home only 30 minutes after I had planned, at no additional cost!  All this helped me get a good night’s rest for my important customer meeting the next morning.

 

How do you cope with unexpected occurrences in your supply chain?  Comment back and let us know!

The post De-segregating the supply chain: Lessons learned in the air appeared first on The 21st Century Supply Chain.

 

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Originally posted by Tom Gregorchik at http://blog.kinaxis.com/2016/06/de-segregating-supply-chain-lessons-learned-air/

Kinaxis

Full Speed Ahead to Failure

Posted by Kinaxis Jun 27, 2016
by Alexa Cheater

Supply Chain SpeedVelocity. Speed. Quickness. In speaking with customers, I’ve heard a lot about how critical speed is in maximizing efficiency, agility, and profitability. I’ve heard how having the ability to know sooner and act faster in relation to opportunities and risks can make life a whole lot easier when it comes to supply chain management. And it’s abundantly clear that it does. All of the articles I’ve read and the examples I’ve come across have been focused on using speed to propel you toward success. But what about using it to take you full steam ahead toward failure?

 

To me it first seemed like a bit of a backward concept—until I learned to look at failure as just another form of victory in disguise. I went from asking myself why anyone would want to fail, to actually looking forward to my next mistake! And much to my surprise, what helped me come to this realization was hearing several prominent figures speaking about the failures they’ve experienced in their businesses and with their supply chains at the Gartner Supply Chain Executive Conference.

 

Chris Tyas, Senior Vice President Global Head of Supply Chain from Nestle, gave a keynote on Supply Chain Innovation & Excellence: Engaging 36,000 Supply Chain Brains Across the World. While the focus was much more on crowdsourcing knowledge and ideas from within your own employee base, he did provide an example of supply chain failure. He mentioned the horse meat scandal from a few years ago, where several big businesses were found to have contaminated food products. Nestle originally came out saying there was no way they were involved—based on the fact their top tier suppliers weren’t implicated. Three days later, they had to retract that statement. A supplier much further along the chain, one they had no knowledge of, was using horsemeat in producing one of Nestle’s products.

 

What Tyas learned from that mistake was the importance of end-to-end visibility. What I learned was the importance of discovering your mistakes quickly—and then taking ownership of them. As soon as Nestle uncovered the problem, they took immediate action to correct the issue, from a public relations standpoint and from the supply chain side. It motivated them to be more aware of what was happening across their entire supply network, and more open and transparent with their customers.

 

Former CEO of Walmart Mike Duke explained in his keynote, From Supply Chain Executive to CEO: Leading the Largest Business in the World, the importance of celebrating mistakes, of building a company culture of risk takers who are willing to experiment, and of acting quickly when you realize those experiments aren’t working out. You have to fail quickly. And you have to fail with purpose.

 

The example he gave was Walmart’s failed expansion into Germany. Duke said if he had to do it all over again, he would have pulled out of that market much sooner. Why? Because they knew it wasn’t working, they were hemorrhaging money, but decided to stick it out just a little longer anyways. He said he should have recognized the failure sooner and moved on.

 

But Duke also shared a story of where failure led to incredible success. Before the rise of the Walmart Supercenter, they tried a different format, one based on the Mega Marts popular in Europe. They built several of these behemoths in the US with the intent of getting into the food business. Competitors said it couldn’t be done. Critics said they were crazy for even trying. The stores were a flop—and a very expensive one at that.

 

Determined to try again, Walmart went back to the drawing board, and out of that initial failed experiment came the birth of the Supercenter, a model that has proven infinitely more successful and has allowed them to achieve their goal of entering the food industry. Duke noted they failed quickly, recognized that failure, learned from it, and moved forward in a modified direction. That is the key to failing successfully.

 

When it comes to your business and your supply chain, it’s okay to take risks. It’s okay to experiment. That’s often what leads to the greatest breakthroughs. But you have to be setup for it. You have to design for failure. What I mean by that is you have to have a supply chain capable of recognizing those failures faster. You need to be agile enough to test, fail, and repeat. And that goes back to being able to know sooner and respond faster.

 

The one other critical piece to failing with purpose, of risk taking in your supply chain, is not being afraid of the failure. Duke summed it up brilliantly in his presentation. The potential size and cost of a failed experiment can’t prevent you from trying it. Yes, in big business mistakes can be costly—Walmart learned that several times the hard way—but you have to look beyond. You have to look at the size of the success that could come from that one risk. Both Walmart and Nestle did, and when they moved full speed ahead toward failure, they realized incredible success.

 

The post Full Speed Ahead to Failure appeared first on The 21st Century Supply Chain.

 

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Originally posted by Alexa Cheater at http://blog.kinaxis.com/2016/06/full-speed-ahead-failure/

by Steven J. Puricelli

S&OPA few weeks ago, I launched a new blog series on sales and operations planning (S&OP). In that introductory post, I outlined a number of important topics that I plan to explore in more detail throughout the summer. To make sure everyone is on the same page, I want to review the basics, the foundation, which is… what exactly is S&OP?  I’ve seen and heard so many different answers and perspectives in response to this question. Therefore, I think it is important to share what I feel are some leading practices and also how leading organizations think about S&OP.

 

First of all, S&OP is indeed a process by most academic definitions (Merriam-Webster Link), as it follows a series of steps and activities with a particular cycle or cadence. And there are certainly meetings that occur throughout the process, but S&OP is not a meeting. S&OP is so much more than a process or a meeting. Yes, I’ve seen organizations that think they are ‘doing S&OP’ because they have a monthly meeting, but in fact they are actually missing the point of S&OP.

 

If one thinks about the purpose of S&OP, it is to ultimately match supply and demand, while balancing the cost (supply) and service (demand) tradeoffs of the supply chain. But as most of us know, addressing or solving this tradeoff is not linear in any way. Organizations face a recurring flow of supply chain imbalances that require decisions. S&OP serves to guide that decision making across the organization, making sure everyone is well informed and that trade-offs are analyzed and addressed properly. As a result, S&OP can be thought of more as an operating model to help organizations make better business decisions.

 

Based on what I have observed at leading organizations, and also as a practitioner and former planner myself, S&OP is much more akin to an operating model or governance model for the supply chain than it is a process. A colleague of mine at Accenture years ago shared a very simple and crisp definition of an operating model, which I have always liked: ‘it’s the way work gets done in an organization’. My intent here is not to engage in a debate over fancy buzzwords or nomenclature, after all, every supply chain organization I’ve seen refers to S&OP as a process. However, what’s important to take away is that S&OP can be bigger and more powerful, and that requires a mind-shift to think about it as more than a process.

 

A number of misconceptions exist about S&OP and its role in managing the supply chain. Here is a simple comparison spectrum that I often use to clarify what S&OP entails.

 

                             
S&OP is not…S&OP is…
Monthly MeetingGovernance or Operating Model
Historical Performance ReviewForward Looking Plan
Forecasting ProcessDecision Making Process
Only Volume or Unit FocusedBoth Volume and Dollar Focused
For Operations or Supply ChainFor the Entire Business
Metrics and Dashboard ReviewsDriver of Actionable Insights

 

 

It’s important to think about S&OP more strategically as an operating model than as a process and this is the first step towards getting the most out of the ‘process’.  In order to better understand how this mind-set is put into practice, I want to share a couple examples illustrating how leading organizations use S&OP to manage their business.

 

  • Backbone of the Organization – One of the best S&OP processes I’ve ever seen was at a global high-tech consumer products organization. What’s interesting is that they didn’t call it S&OP or even have a term for the process.  In fact, there wasn’t really a discrete process, it was simply the way the entire organization operated. Every department from sales, marketing, engineering, finance, and of course, supply chain followed a well-orchestrated, and integrated cadence every month. All the various sub-processes in the departments noted above connected and hinged around this underlying backbone in the organization.
    The inertia of the organization, at all levels, revolved around supporting the cadence of this process, it was simply how they ran the business. There was a calendar with thoughtfully sequenced meetings; there was a well-defined core team and an extended team; the workforce had defined activities and came prepared to meetings; review meetings were well attended and they had a purpose with defined outcomes; and finally, the organization analyzed business trade-offs and made decisions. It was controlled and disciplined. It operated like a well-oiled machine. And, it was incredibly impressive to see in action.
  • Financial Management Lever – A very powerful aspect of S&OP, when applied and used properly, is its ability to steer the performance of a business. One organization that did this well was a global consumer electronics company that operated across many competitive marketplaces and faced fluctuating currencies and foreign exchange rates. Operationally, planning the supply chain was fairly straightforward, but financially it was incredibly complex. As a result, this organization’s process not only looked at volume, but also dollars, which is something I often see in leading organizations. In addition to the standard reports that normally support the process, the S&OP team also had a financial income statement — just like the normal S&OP templates, but instead of units, there were dollars.
    Revenue and margin were the two primary measures, with product mix, manufacturing locations, and currency rates as an overlay.  What-if scenarios were performed to model different financial outcomes as the organization evaluated decisions and their impact on revenue and margin. The S&OP team would adjust manufacturing locations and allocate inventory to different regions and markets globally based on the financial performance objectives…either to drive more revenue, or to drive more margin. The S&OP process in this organization had a greater purpose than to simply balance supply and demand. It also supported operational hedging strategies via the supply chain and was used to drive the best financial outcomes.

I trust this post provided a different perspective – that S&OP is much less about process mechanics and more about the mind-set in an organization. I look forward to reading your comments on this topic and to see what other perspectives people have on S&OP and its definition. In my next post, I’ll explore the areas of ownership and some of the organizational implications of S&OP.

 

The post What is S&OP? By Accenture Strategy Guest Blogger appeared first on The 21st Century Supply Chain.

 

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Originally posted by Steven J. Puricelli at http://blog.kinaxis.com/2016/06/sop-accenture-strategy-guest-blogger/

by Melissa Clow

This guest post comes to us from Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management.

 

hyperloopcargoWe’re always trying to stay on top of Supply Chain developments at Argentus. And this sometimes takes us into looking at the emerging technologies that are poised to have a significant impact on the function. We’ve talked about 3D printing, self-driving cars, automation and other 21st-century developments that could transform the way that products are brought to market – as well as the job descriptions and career paths of the Supply Chain professionals who manage that process.

 

Discussions of emerging technologies in the Supply Chain might be a bit far afield from the world of talent that we deal with as a recruitment firm, but they’re not as far away as you might think: the last decade’s emerging technologies (eCommerce and big data analytics) have already completely upended the skillset required by Supply Chain professionals, and changed the function from a talent standpoint into something very different than it used to be. So it doesn’t hurt to see what’s on the horizon.

 

Enter Hyperloop.

 

Hyperloop is a theoretical transportation technology, a long-awaited “fifth avenue” of transportation that uses vacuum tubes and linear induction motors to shuttle pressurized air capsules along a track, using a lack of friction to achieve speeds as high as 700 mph (approx. 1126km / h). The proposed first route between Los Angeles and San Francisco would cut travel times from 4 hours to 35 minutes. The idea sounds straight out of science fiction – like many of the other large-scale projects proposed and championed by its inventor, Elon Musk. But last week, Hyperloop had its first prototype test on an open track – and the test was successful – taking the idea from the realm of science fiction into actual possibility.

 

The idea of tubes whisking freight across the land at near-supersonic speeds smacks of an old-school image of the future. But it’s gained new prominence with some engineering advances, as well as the imprimatur of Musk, who’s gained tons of press for successfully disrupting the online payment, aerospace, and automotive industries. The Hyperloop project is also seeing substantial private sector investment. All these factors combined mean that this futuristic technology might not be as far away as it seems. The CEO of the company behind the test (Hyperloop One) estimates that the system will be transporting cargo by 2019 and passengers by 2021.

 

The fact that the CEO of the company leading the Hyperloop charge is committed to it being a freight transportation technology first, is pretty telling in our eyes: obviously, if it can ship freight, the Hyperloop project might have tremendous implications for the Supply Chain field, which (in large part) focuses on the efficient movement of material goods.

 

So what are the Supply Chain implications of this “fifth mode of transportation” beyond car, air, rail and water?

 

They might be hard to predict, but they also might be massive.

 

For one thing, the technology’s immense speed would allow greater Supply Chain flexibility. The possibility of shipping goods at near-hypersonic speeds would obviously allow Supply Chains to be nimbler and more responsive. They might allow companies to carry less inventory – perhaps using Hyperloop to rapidly source whatever parts or raw materials that can’t be 3D printed.

 

Because Hyperloop is an enclosed system (which is part of why it might be more expensive than estimated), a Supply Chain based on the technology might also be more impervious to freak weather events than road and air shipments are today, leading to greater Supply Chain resiliency.

 

If it ever gets off the ground, Hyperloop is slated to be solar-powered. Energy costs would be extremely low due to the lack of friction. As a result, the technology represents the greenest transportation method yet devised, which would make Supply Chains more sustainable.

 

Call it pie in the sky, but these would be three significant improvements to some of the greatest challenges facing Supply Chain professionals today.

 

We of course make no promises to be experts on a still mostly-theoretical (though less theoretical every day) form of transportation. And such a forward-thinking idea, as revolutionary as it is, probably won’t be as cheap or as easy to implement as its advocates claim. As the Economist says, cost estimates about the project’s implementation are “unlikely to be immune to the hypertrophication of cost that every other grand infrastructure project seems doomed to suffer.” The technology’s impact on the Supply Chain might be just as hard to predict as its cost at this point. I don’t think even the most forward-looking analysts fully grasped the way that the Internet would upend Supply Chains around the world.

 

But we’re interested in what Supply Chain and Logistics pros in our network have to say. So let us know in the comments: how do you see this technology disrupting the field in the next 5-10 years if it comes into reality?

 

 

The post Is Hyperloop the Next Great Supply Chain Technology? appeared first on The 21st Century Supply Chain.

 

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Originally posted by Melissa Clow at http://blog.kinaxis.com/2016/06/hyperloop-next-great-supply-chain-technology/

by John Westerveld

IOT Supply ChainLightbulbs that change colors from a command on your phone and turn on when you enter the room, thermostats that can figure out when you are in the house and adjust accordingly, refrigerators that e-mail you when you are out of milk, garage doors that let you know when they are open, doors that can be unlocked from your phone even when you are across the country, cars that drive themselves, tags you can put on your keys so you will never lose them again.  These are all examples of the internet of things.  Some of these examples are fluff and likely won’t pan out, others may be real game changers.

 

Being a bit of a techie nerd, I’ve been following the Internet of Things (IoT) evolution on the consumer device market for a while, but I honestly haven’t given much thought to how the IoT will impact supply chain.  This morning, I happened upon a video presentation from MPI and Rockwell Automation titled A deeper dive into the industrial internet of things on the Industry Week website.  The video was a report out and analysis of a survey that MPI had done on Internet of Things in the supply chain.  There were lots of interesting facts and figures in the report, but one fact that stood out to me was this.

 

In a 2014 study, 46% of manufacturing executives didn’t know what the internet of things was.  A logical extension of this is that they also wouldn’t know how IoT could impact the supply chain.  Maybe it’s time to understand how IoT will interact with and ultimately change the Supply Chain.

 

So what is the Internet of things?   The source of all knowledge, Wikipedia, describes the Internet of things as:

 

“…the network of physical objects—devices, vehicles, buildings and other items—embedded with electronics, software, sensors, and network connectivity that enables these objects to collect and exchange data”

 

For consumer devices, we’ve seen examples of this at work for a number of years.  More and more devices are getting internet connections and are either sending or receiving data.  But what about supply chain?

 

Last year, Deloitte University Press published an article on the Internet of Things titled “Forging links into loops: The Internet of Things’ potential to recast supply chain management”. In that article they identified a number of examples where smart devices and sensors in the supply chain could significantly change how supply chain works.  Here are some examples:

 

Manufacturing monitoring – Devices measure ambient temperature, humidity, air pressure, etc. and either prevent operations or re-route if the ambient conditions fall outside specified parameters.  One example of this would be painting where applying paint in a too humid environment can cause the paint to not cure properly.  In a previous life, we had examples where aerospace products were produced in a non-air-conditioned factory but measured in an air-conditioned QA lab.  Needless to say we had scrap issues on a hot day.  Other examples might be real-time utilization data on a machine or bottleneck tracking based on queue sizes.

 

Inventory Tracking – Despite all the efforts manufacturers put into inventory accuracy it still happens.  You think you have X units of Product n, but you really have Y units…where Y units is less than what is needed for the next order of the product.  Imagine if your inventory itself could tell you how much there is.  It could be as simple as an RFID device on each item or case that responded to sensors around the factory giving real-time information on what inventory was on-hand.

 

Shipment Tracking – What about outside the four walls?  One of the things I love about ordering things on-line is tracking the shipment as it wends its way from wherever it originates to my front door. That capability has existed for years and is typically accomplished via a bar-code scan as the package moves from stage to stage.  In the internet of things model, that tracking information can be augmented by sensors in the container that can measure ambient variables such as temperature, humidity, air-pressure and even light levels.  This way, logistics can monitor sensitive shipments to ensure the product will not have been damaged in transit before it arrives.

 

Re-ordering – One of my favorite examples of what could be with the internet of things was the connected fridge. Imagine if the fridge (and your pantry for that matter) was able to keep track of what was put in and what was taken out.  If your milk, for example, fell below a certain level, milk would automatically be added to your grocery list.  If the mayonnaise is past its expiry date, an alert would be sent to your phone so that you’d know to throw it out…and that you should by some more.  The same logic could be applied to supply chain.  If the assembly shop takes a widget out of the bin and now the weight of widgets in that bin falls below the re-order threshold, a replenishment order is generated.  Note that ERP inventory accuracy no longer is a constraint on when re-ordering happens.

 

There are lots of other examples where connected devices, tags and sensors could eliminate guesswork and risk in the supply chain.  The only limit is your imagination… and the inherent security of IoT.  As with anything on the internet, there is risk associated with placing data and devices in areas where they could be exposed to loss due to inadequate data security.  Jim Fulcher takes this issue on in his article Ways to help ensure IoT security.

 

Having a physical supply chain that can sense and report changing conditions is only half the battle.  Your planning system has to be able to respond to changing conditions too.   Imagine this scenario.  You have a shipment of sealant inbound that is rendered defective if it’s allowed to freeze before being applied.  You receive an alert on your phone that the ambient temperature of this shipment has dropped to -1 degree Celsius and falling.

 

A quick phone call confirms that the heater unit on the truck has failed and the shipment is ruined.  Where else can I get this sealant?   When can I get it? What customers will be impacted by this event?  What impact will we see to revenue / margin because of this event? What other options do I have and what will be the impact of those options?   You see, the Internet of Things on its own provides significant improvements into visibility and the speed at which you know about events.  But without the ability to analyze and respond, you aren’t getting the full benefit of IoT.

 

Are you looking at deploying IoT in your supply chain?  Have you done it already?  Comment back and let us know!

The post The internet of (supply chain) things appeared first on The 21st Century Supply Chain.

 

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Originally posted by John Westerveld at http://blog.kinaxis.com/2016/06/internet-supply-chain-things/

by Bill DuBois

Father's DayWhen I told my dad I was going into supply chain, he grudgingly said, “That’s nice son,” and then whispered into my mom’s ear, “He’s not moving back in with us.” Well I think he finally came around after I moved all my stuff out of the house. Here are the top 10 reasons he was eventually happy I went into supply chain:

 

10. He doesn’t have to listen to me try to sing my way into the music business.
9. I could never be a doctor, I pass out at the sight of blood.
8. When I said I wanted to get into professional sports he said, “that’s fine son but I don’t think water boys make that much.
7. I wanted to be an inventor, but he didn’t like my solar powered night vision goggles idea.
6. He told me not to quit my day job when I practiced my standup comedy routine on him.
5. My dad recommended I work on stage design for the school play so acting was out.
4. Truck or a bus driver wasn’t going to work out. On family trips, I was asleep before we got out of the driveway.
3. Politician. Say no more.
2. He thought I’d drink the profits if I opened my own micro-brewery.
1. Whenever he gets a package delivered on time, he thinks I did that.

 

And with that, happy Father’s Day to all the great dads out there! You can thank your friendly neighborhood supply chain for all those deliveries that are on time.

 

The post Top 10 Reasons My Dad is Happy I’m in Supply Chain appeared first on The 21st Century Supply Chain.

 

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Originally posted by Bill DuBois at http://blog.kinaxis.com/2016/06/top-10-reasons-dad-happy-im-supply-chain/

by Jonathan Matthews

supply chain sightPlaying hockey the other night, there was a particularly boisterous individual on my bench.  One of my teammates made the comment that essentially boiled down to, “they should be seen and not heard,” which started me thinking, strangely enough, about supply chain. When a supply chain is working at its best, the general population doesn’t see it and often has no concept of the complexities behind it. They’ll walk into the local department store, fill their carts with paper towel, clothes and cookies never taking a moment to ponder the supply logistics required to get those products into their cart.

 

They’ll of course see the transport trucks rolling down the road as they pass by, knowing their trailers are full of cargo, but they’ll never bother to think about how that order is triggered, the decisions involved with how much quantity to order, or the complexities (such as expiry dates) of getting that order to their local store. To our local consumer, supply chain is simply out of sight and out of mind; for all intents and purposes, it is invisible.

 

This is, of course, all thanks to supply chain managers working diligently to keep supply chain issues out of the news, but despite their best efforts, supply chain problems do happen. And unfortunately, when they do, it is spread throughout water cooler conversations, and if it is big enough, it’s on the news. For example, to look at an issue so painfully familiar with most, the absolute chaos of December Christmas shopping. Postal services get absolutely assaulted with packages, taxing them to the limit.

 

Moving a package from point A to B is simple enough… compared to other supply chain companies, such as a pharma company that needs to accurately forecast demand for a new drug which can be extremely expensive, manufacturing the product, and in some cases, worrying about expiration.

 

The Christmas rush, however, brings the supply chain process to the front of every consumer’s mind. Supply chain problems will be front and center of conversations with news media covering the whole spectacle. Delays here, even by a day, could mean a missed present on Christmas, which, to that 3-year old, means Christmas is ruined for the year.

 

In defense of the postal service, delays due to the Christmas rush certainly doesn’t constitute a supply chain failure, unlike what Canadians witnessed a few years back with the arrival of the highly anticipated US retailer, Target. Canadians were excited across the nation for Target, but that enthusiasm quickly dampened upon entering the store. This wasn’t due to a failure to be cheaper than their other Canadian competitors, a lack of different styles and brands of clothing or even new products not seen in Canada before. Rather, it was empty shelves. Much has certainly been made about the many areas of failure throughout Target’s entire supply chain because Target was unable to get these issues sorted out. Canadians quickly abandoned the retailer and its empty shelves. Years later, this failure is still on the minds of Canadians.

 

Supply chain issues can also rise to the forefront of conversation when it experiences catastrophic failures outside of human influence. Natural disasters such as hurricanes, tsunamis, avalanches or earthquakes absolutely destroy supply lines and their supporting infrastructure. Even as soon as rescue operations are underway, managers are working feverishly to set up and re-establish supply lines of food, water and medicine to the beleaguered area while insuring the wounded and affected are able to be evacuated.

 

Although the general population associates the moving of goods and items in, the movement of people out, is also considered part of a supply chain. A rescued disaster victim needs to be moved from the disaster area, triaged, loaded onto the vehicle going to the correct destination and all under a critical time frame (depending on the severity of the injury). Which comes upon the next point. Although it was a hockey game that started my thought process for writing this article, it was my four hour delay at the Chicago airport that gave me ample opportunity to write this post and reflect.

 

At a high level, I am nothing more than an item moving from one destination to another through various modes of transportation (car and plane). Someone, (for the sake of argument a travel agent, and yes, I realize most don’t uses these anymore) had coordinated my trip from beginning to end. The airport manager at each airport I ended up at had to work tirelessly to insure that I got from one flight to another and the taxi dispatcher had to make sure a taxi was available when I landed.

 

When everything is operating smoothly, your only thoughts are of sitting on the beach sipping that margarita and not of the supply chain you traveled to get there. But when I’m told there is a four hour long delay and that instead of spending my afternoon on the beach it’s spent in an airport, questions invariably start cropping up. Why is the plane late? Is there a back-up plane? Why was this not anticipated better? Everybody else in that waiting room is asking these questions, leading to rumblings and the evaluation of the supply line that got them to this point.

 

This is the same thought process our consumer ask themselves when they reach for that box of cookies that were on sale, but are now sold out. Why was the order not increased to meet the increased demand? Are there any out back? Who was in charge of forecasting the sale? And as the consumer ponders these questions, they start down the path that every supply manager has to deal with every day. Except, unlike the supply manager, the consumer can simply decide to move on from the sold out cookies, dropping that thought from their mind in just a few minutes. With our consumer turning their attention to the next in-stock item on their list, the logistics, intricacies and management of supply chain fade once more into the background, becoming invisible until the next disaster hits the news (and disrupts their world).

 

The post Supply Chain Is at Its Best When You Can’t See It appeared first on The 21st Century Supply Chain.

 

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Originally posted by Jonathan Matthews at http://blog.kinaxis.com/2016/06/supply-chain-best-cant-see/

by Alexa Cheater

TechnologyPeople are the heart of your company and one of your company’s most valuable assets. That’s why practically every company strives to provide great compensation, benefits, offer new age work spaces, and cultivate engaging and fun cultures. All of this is needed just to keep up in the supply chain talent war. But one other key factor I’ve heard in talking with customers is providing the right tools for the job.

 

Give a quality tool to the right worker and they’ll create a masterpiece. It can be both that simple and that complex. Finding that tool, which in supply chain means technology, can be a daunting task.  Balancing operating costs, and customer service metrics is no easy feat. But with the right supply chain technology, you can deliver breakthrough results. Processes that took days or even weeks can be effectively and efficiently accomplished in hours or minutes. Imagine higher customer satisfaction at lower costs. It’s about finding the best way to connect data, processes and people.

 

So how can you leverage supply chain technology to enable your team to achieve success? By ensuring whatever solution you deploy has a key set of capabilities designed to make it easier for you to work smarter, not harder.

 

Sense and Respond

 

Today’s supply chains are global, complex, and constantly shifting. Forecasts are often wrong. Knowing sooner when an event occurs, and the risks associated with any potential fallout, means less chaos. You and your team will be able to respond faster to change if you can rapidly make informed risk decisions based on scenario analysis and collaboration—two key features that should be requirements when evaluating any supply chain software solution.

 

By adopting a sense and respond model for your supply chain, supported by the appropriate technology of course, you’ll have the right resources available and a clear strategy in place for when an unanticipated event happens—because let’s face it, in supply chain, dealing with the unexpected is just a way of life.

 

Single Source of Truth

 

How many versions of the same Excel spreadsheet are floating around your office? The answer is probably too many, and that can mean big trouble for your business. Not having everyone work from the same data set means you’re working with data that’s either incomplete, outdated, or both.

 

To overcome the challenge means integrating not just the different data sources, but the actual supply chain processes as well. This includes a technology that allows participants to collaborate in real time. And the best way to accomplish that and derive real value is by using a single system that serves as a system of record for all your data sets.

 

Collaboration

 

As you know, supply chains are complex, and that means dealing with complex problems. While technology can help quickly process data and provide possible solutions via scenario simulations, people understand uncertainty and compromise, two pivotal aspects in overcoming challenges. Machines don’t. At least not to the level we need them to (although who knows what the future will hold!).

 

Collaboration also lets you harness the collective minds of your team. Very rarely will a single person have the right answer 100% of the time. By leveraging everyone’s expertise you can come to a consensus faster, and engage everyone impacted to manage any trade-offs.

 

End-to-End Visibility

 

Working as a team is vital, but that team can’t just be limited to inside the four walls of your department, or even the walls of your company. Oftentimes multiple stakeholders are involved, including suppliers and customers. But in order to bring them into any collaboration, you need to understand where and how they impact your supply chain.

 

Without complete data visibility, the information flow is slow, resulting in more time wasted waiting for the numbers to be crunched, and less time dealing with any arising issues or opportunities. There needs to be an end-to-end global strategy, complete with total visibility upstream and down.

 

There’s no denying the power of technology is truly great. Just check out these video clips showcasing what real supply chain practitioners have to say about how it revolutionized their processes.

 

Imagine a strong workforce plus these advanced tools. You’ll transform your supply chain so you can take care of today as well as be prepared for the uncertainty the future holds. But if you have the right workforce but not the right tool? Well, even Michelangelo needed specific chisels to carve his famous statue of David.

 

The post Leveraging Technology to Enable People appeared first on The 21st Century Supply Chain.

 

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Originally posted by Alexa Cheater at http://blog.kinaxis.com/2016/06/leveraging-technology-enable-people/

by Jonathan Lofton

Design for the Supply Chain Can you believe we’re rapidly approaching the end of this series (Design for the Supply Chain) already!?! This week we’re talking about the meticulousness of the supply chain management solution.

 

Principle #8: Good design “Is thorough down to the last detail”

 

“Nothing must be arbitrary or left to chance. Care and accuracy in the design process show respect towards the consumer.” – ‘Dieter Rams: ten principles for good design’

 

My first reaction to this was to say something about Apple and Steve Jobs (A Story About Steve Jobs And Attention To Detail), but I figured you’ve probably already heard those stories before. So I started reflecting instead on how best to pay attention to detail. “Nothing left to chance” means to me there’s a clear checklist of things that are carefully considered when establishing (or refining) the supply chain. This checklist would ensure the attention to detail goes beyond the vision of a single individual, or even trusting in corporate culture—both inevitably change over time. It would be systemic, a part of the structure of the company, and wouldn’t change without a conscience decision and a serious amount of thought.

 

It brings to mind the concept of Systems Thinking, and one of my favorite tools: the causal diagram. I like it because it explicitly shows what’s driving results, including any unintended consequences. It’s very hard to understand something as intricate as a supply chain without drawing a picture. I believe one of our challenges is how fatiguing it can be to give deep thought to the supply chain because it is so complex.

 

I was recently reminded just how complex a supply chain can be for a product as ‘simple’ as a pencil. I was listening to a Freakonomics Radio podcast (How Can This Possibly Be True?) that included a discussion about the essay, I, Pencil, which is written in the words of a pencil itself (check it out, it’s pretty cool!). The pencil talks about the processes and participants in its supply chain and how, “not a single person on the face of this earth knows how to make me.” Some points mentioned:

 

  • The people who are involved in cutting down and machining the trees
  • The people who designed the chainsaws and the axes and the trucks that ship the cedar across country
  • Milling and cutting the wood into pencil-like shapes
  • Workers who built the hydroelectric dam that powers the mill
  • The lead, which is of course not made of lead but is graphite mixed with other stuff
  • The graphite miners
  • The men who built the ships that transport the graphite
  • The harbor pilots who guide those ships in from the sea
  • The lighthouse keepers along the way
  • The lacquer on the pencil
  • The brass on the top of the pencil (made from zinc and copper… which have to be mined)
  • And the list goes on and on!

“The pencil explains all this detail, but in each case, the pencil is pointing out that there are these global supply chains, there are all of these different inventions going way back in history, all of these different people involved. And if you put it all together, you realize there isn’t a single person in the world who would really understand how to make a pencil from scratch, from the raw materials.” – Tim Harford, economist, journalist, broadcaster and author of The Undercover Economist.

 

The image above is a simple supply chain causal diagram from the APICS article, The Origins of Complexity. I can see integrating the elements of the company’s mission statement (e.g. sustainability), aspects of risk management (e.g. natural threats), etc. into this type of diagram. This view of the supply chain as a checkpoint could be very useful to help drive “thoroughness” in the solution.

 

Are there other approaches or tools you would recommend to drive meticulousness in the supply chain?

 

Want to learn more about Design for the Supply Chain? Check out the rest of the series:

 

The post Design for the Supply Chain Pt 9: Thorough Down to the Last Detail appeared first on The 21st Century Supply Chain.

 

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Originally posted by Jonathan Lofton at http://blog.kinaxis.com/2016/06/design-for-the-supply-chain-pt-9-thorough-down-to-the-last-detail/

by Iman Niroomand

Today, I’d like to discuss distribution networks shapes. A distribution network is a channel that a company uses to get its products from the manufacturer to the end customer. The shape of this distribution network could vary from a small and simple size network to very complicated networks such as power grid network. The factors that are involved in defining the shape of the distribution network are end customer product demands, product variety, product availability, response time, returnability, and customer experience. Among these factors, response time gets higher weight in establishing the distribution shape.

 

Response times are the time between when a customer places an order and receives delivery. If customers can tolerate a large response time, fewer locations are required in a distribution channel and the emphasis would be on the larger capacity at each location. However, if customers require short response times then the more locations should be built in the network.

 

Changing the distribution network is something that a company is often reluctant to do in short range since it has direct impact on supply chain cost elements such as inventories, transportation, facilities and handling. But it is just a matter of time and sooner or later a company needs to reshape its distribution network.

 

As a rule of thumb we can say, the more facilities in a network, it causes more inventory costs but less shipping costs. In opposite, the less number of facilities would lead to less facility overhead cost but more transportation costs for remote customers. So if we assume the distribution costs are a summation of facility and transportation costs and call it logistic costs, then would these two elements be enough to configure the shape of the distribution network? Where would the response times fit in this equation?

 

Distribution Network Figure 1

 

Figure 1

 

There is no doubt that a minimum number of locations are required to minimize the logistic costs but in order to be more agile and quick to respond to market changes an organization should go beyond the cost minimization. Figure 1 shows that the extra number of facilities would bring quicker response times to market albeit of increasing the logistic costs. But, the main question would be: where are the tradeoffs? To answer this question let’s take a look at the response time and supply relationship.

 

Supply is a factor of time because the supplier cannot react quickly to a demand change. So it is really important to see if the demand change is temporary or permanent. For example one should investigate whether the demand increase for umbrellas is because of the one rainy season or is it because of the climate change. So a key factor to evaluate the required supply is predicting the demand shape. In figure 2, the demand shape has a sinus pattern and depends on the economic and market condition, the slope of peak or downturn changes time to time. However, the trend of the demand is more stable in longer periods of time and would be a good indicator that market is expanding or retracting. It is really important for the company to know its product demand shape in the next five to ten years and adjust its supply chain accordingly, so that they may respond to market change quicker.

 

In the expansion period, a company may wish to build a new infrastructure in other geographical areas (market penetration) and in a downturn, would decide to consolidate the duplicate distribution systems created at an earlier time. This wave is what to consider for response times.

 

Distribution Network Figure 2

 

Figure 2

 

Back to my original question, “where is the tradeoff between the response times and logistic costs?” I can say it depends on where the company stands on its demand shape. In expansion periods, it makes sense to go beyond the logistic cost and penetrate fiercely into the market to achieve quicker response times even though the logistic costs are higher. In the maturity phase of the demand shape, the best strategy is to keep the response times as level as minimum logistic cost and finally in the downturn period it wouldn’t be the worst idea to sacrifice the response time by saving some buckets in logistic costs.

 

I hope you enjoyed this discussion on distribution shapes. What are your thoughts? Do you agree with my deductions? Look forward to hearing from you in the comments section!

The post The shape of a supply chain distribution network appeared first on The 21st Century Supply Chain.

 

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Originally posted by Iman Niroomand at http://blog.kinaxis.com/2016/06/shape-supply-chain-distribution-network/

by Steven J. Puricelli

S&OP Summer Reading Series

 

Kinaxis recently asked me to author a blog series on the topic of Sales and Operations Planning (S&OP). Naturally, I was flattered to be asked to contribute to their popular 21st Century Supply Chain blog. But I was also very excited, because as a strategy consultant at Accenture, I’m able to share a wide range of client experiences on ‘what good looks like’ and what business issues clients are facing across a wide range of industries. In addition, prior to becoming a consultant, I was a practitioner in industry, managing S&OP processes. That gives me a unique appreciation of the challenges organizations face, and what it’s actually like to be part of an S&OP team.

 

I’ve designed this series to focus on the most common or frequently asked questions I hear from my clients. In this first posting, I will provide an overview of the six key areas I plan to talk about in my blogs.  Going forward, I will dive into the details around each of these areas, share examples, and highlight options you may want to consider in your organization. I look forward to sharing my thoughts with you and hope you’ll include this blog on your summer reading list. I also hope we can engage in an exciting dialogue on the topic of S&OP and how we can work to improve your organization’s performance and outcomes.

 

How can organizations better use S&OP?

I’m often asked as I travel around the country working with various organizations, irrespective of the industry: “What are the most common S&OP challenges facing organizations today and why isn’t our process working?” Many of the organizations are struggling with the long-standing dilemma of effectively balancing customer service with supply chain costs, yet all have some form or shape of an S&OP process in place. So what’s going on? Why is this happening? I get asked these questions all the time. And candidly, I see it all the time too in my everyday personal life… stock outs, backorders, inventory markdowns, and clearance sales. These symptoms all point to a failure or breakdown in an organization’s S&OP process. So, how can organizations better use S&OP to improve their agility and responsiveness to today’s dynamic markets?

 

As with any S&OP topic I blog about, you will get to read about the good, the bad, and the ugly that face organizations today, as well as the supply chain capabilities needed to better manage the service and cost tradeoff. The following offers an overview of the most common S&OP issues I see and hear about at organizations. I’ll explore them in more detail in subsequent postings.

 

  1. What is S&OP?
    Let’s start with the foundation and define what exactly S&OP is? Executives often tell me that “we’re doing S&OP…we have a monthly meeting” or ask “should we be using a four-step process or five-step process?” Candidly, it doesn’t matter. You’re missing the whole spirit of S&OP if these are the questions going through your mind. To get my point across, I frequently joke that S&OP is actually NOT a process, but rather a governance model. It needs to be thought of more as a strategic operating model for making better supply chain decisions. Sure, leading organizations have monthly meetings and maybe a four step or five step process, but their mindset about the role of S&OP for their business operations is very different. Leading organizations use S&OP to proactively steer their business to meet internal objectives or anticipate and better manage the market dynamics they experience.
  2. Who owns S&OP?
    Because S&OP largely operates as a team effort (in some cases virtual), a well-defined owner or champion is often missing. Organizations frequently struggle to determine the right ownership and the organizational implications around roles and responsibilities and decision rights. Unfortunately, there is no clear cut answer here and in true consulting fashion, the answer “depends” and I often ask: “who owns the inventory?” This question typically results in a quirky smile or completely confused look on my client’s face.The good news is: There are some likely owners or better candidates to own the S&OP process in most organizations. However, defining the right team is more critical than defining the right owner.  Having the right cross-functional integration and engagement from across the organization is an imperative for a leading S&OP process. Sports teams, chefs and cooks in restaurants, and the military all generally operate as high-performing teams. Why do businesses and organizations struggle to do the same?
  3. What are new operating models for S&OP?
    Unlike many other activities in an organization that are standardized and consistent across divisions, product lines, or brands (e.g. order to cash or AR/AP processes), S&OP is far more complex and needs to be appropriately tailored to the business area it serves. Many organizations today still use a “one-size-fits-all” operating model when it comes to S&OP.Managing all products, or customers, or geographies with an identical or common S&OP model restricts the supply chain’s responsiveness and effectiveness when faced with market volatility. Instead, leading organizations are segmenting their supply chains and S&OP operating models to those that are more “fit-for-purpose”. Appropriately segmenting products, brands, market channels and customers based on their behaviors and characteristics, and applying different operating models to manage them can help improve supply chain agility and competitiveness.
  4. What about the workforce?
    People manage and operate supply chains… period.  And it should be fairly obvious that S&OP is not a process that’s well suited for automation. As a result, how managers think about attracting the right talent and skills, as well as developing and retaining people is a key issue that organizations are addressing.  It also is an area many companies are keen to address. Who would’ve thought 10 years ago that today’s top imperatives for supply chain executives had to do with people?We’ve come a long way from just focusing on system implementations and process standardization. Thinking about the workforce of the future and what is needed to effectively manage an S&OP process primarily requires addressing team skills and talent. Does the workforce really understand what is going on in the supply chain and do the people have the skills needed to make the right decisions when facing today’s volatile markets?
  5. How can S&OP leverage new digital technologies?
    When it comes to S&OP, technology is often the differentiator between a good process and a great process. However, technology cannot turn a bad one into a good one. A solid foundation with the organizational and process components of S&OP is critical. Some very good S&OP processes run entirely on manual spreadsheets, much to my amazement, but it’s possible although not recommended.What that demonstrates is the importance of the other components beyond the fancy tools or technologies. Having said that, the new digital capabilities available to organizations today have evolved tremendously over the past few years and are incredibly powerful. Organizations are swimming in pools of data (both internal and external) with very limited capacity to do much with it. With S&OP operating primarily as a governance process for making good decisions, technology is an incredible enabler that helps convert data into actionable insights.New digital capabilities are making analytics and modeling truly usable, or rather accessible…finally. And a convergence of mainstream smartphone and consumer-like features and functionalities have been finding their way into enterprise S&OP solutions. The technologies available today are truly enablers, holistic solutions that support the workflow of S&OP. But how are leading organizations applying and harnessing these new digital capabilities?
  6. Why isn’t it working?
    This is the most common question I hear, and it’s usually asked out of frustration. Would it surprise you to know that the majority of the professional golfers get golf lessons? Or that most professional hockey players get skating lessons? S&OP is one of the most complex business processes in an organization, but instant results are expected after implementing a tool, restructuring teams, or streamlining a process.The immediacy and need for instant gratification in our culture is in conflict with what is actually required to develop a leading S&OP process. I get golf lessons, and certainly need them…a lot in fact. But the guys on the pro golf tour?  You bet.  Golf is incredibly complex. To compete at the top, commitment to becoming the best requires patience and practice. No different than the top athletes in the world, successful companies with leading S&OP processes in place…practice, adjust, tweak, and do so with patience and dedication. What do you and your organization need to do in the months ahead to plot your journey towards improving your S&OP process?

I look forward to sharing many insights and having engaging dialogues as part of this S&OP summer reading series and hope you join us!

 

The post S&OP Summer Reading Series by Accenture Strategy Guest Blogger appeared first on The 21st Century Supply Chain.

 

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Originally posted by Steven J. Puricelli at http://blog.kinaxis.com/2016/06/sop-summer-reading-series-by-accenture-strategy-guest-blogger/

by CJ Wehlage

On the bus ride back to the McDowell Marriott after the 2016 Gartner Top 25 Supply Chain event, I plugged my ear phones into my cell and listened to some Pearl Jam.  Their classic hit, Last Kiss, the song summed up my thoughts about the 2016 rankings.  So, the supply chain version of Last Kiss would go something like this…

 

“Oh where, oh where, can my supply chain be?

 

The trends took her away from me

 

She’s gone peripheral, so I’ve got to think Core

 

So I can get my supply chain back to reality”

 

The “Green Washing” of the Top 25

 

If you take out the new CSR ranking from 2016, your Top 25 rankings would be:

 

                                                                   
Actual 2016 RankWithout CSR RankWehlage Bold Predictions
1UnileverAmazonAmazon
2McDonald’sMcDonald’sUnilever
3AmazonUnileverInditex
4WalmartIntelIntel
5H&MCiscoSamsung
6InditexH&MCisco
7CiscoInditexMcDonald’s
8SamsungNikeH&M
9Coca ColaStarbucksNike
10NestleColgate PalmoliveStarbucks

 

 

Three pieces of edgy insights from this:

 

a. My Bold Predictions were not far off.  I did call the Nike and Starbucks entry into the Top 10.  I am bolder on Samsung, simply because they had the highest 2016 Inventory Turns aside from McDonalds.  As well, Samsung was 7th in Peer Voting rank, so the other “185” Peer voters agree with me.

 

b. I did nail the highest mover up the rankings with Schneider Electric. They went from #34 in 2015 to #18 in 2016.  Congrats to Annette Clayton and her team.

 

c. Variety breeds interest.  Interest breeds readership.  Readership helps revenue.  It started last year when the “Masters” category was created.  All data aside, this new category was primarily to remove Apple and P&G, so the words “we have a new #1” could be stated.  In 2016, another category was created, called the CSR ranking.   The new trend to be sustainable is part of the current category: Revenue Growth, so why add another category like CSR when we should be moving towards the core supply chain metrics of total delivered cost and customer service.  I guess supply chain leaders who want to move up the Top 25 now have to persuade their HR & Legal departments to publish a CSR report.

 

And, since Amazon scored a whopping “zero” on CSR in 2016, Gartner was able to say: “we have a new #1”.

 

Hold the presses. I made a bold prediction about Amazon being #1, mainly due to their ROA improving.  Amazon had been spending a ton on assets, both data center and distribution, which killed their pre-2016 ROA ranking.  Remember in 2015, Amazon’s ROA was 0.0%.   However, that spending has come to fruition, in terms of revenue growth.

 

Amazon was #1 in Gartner’s Three Year Weighted Revenue at 20.40%.

 

Amazon was #1 in Peer Voting, scoring 3356, with 2nd place getting 1841!

 

Amazon has reshaped the Retail experience, and is in the process of reshaping the distribution industry.  Their spending on assets to take market share is killing their ROA, and as such, killing their Gartner Top 25 position.  This, my friends, is why we need to get back to CORE supply chain metrics when measuring the Top 25.

 

Peer versus Analyst – the disconnect has widened

 

I continue to be confused as to how 40% of the Top 10 Supply Chains can be different between the Peers and the Analysts.

 

                                             
Analysts (38)Peers (185)
UnileverAmazon
AmazonUnilever
Cisco SystemsMcDonald’s
IntelWalmart
McDonald’sThe Coca-Cola Co.
PepsiCoNike
Colgate-PalmoliveSamsung Electronics
Samsung ElectronicsNestlé
InditexInditex
HPCisco Systems

 

 

The confusing part is where the Analysts rank Intel, PepsiCo, Colgate Palmolive and HP, especially HP.

 

                          
Analyst RankPeer Rank
Intel411
PepsiCo514
Colgate Palmolive616
HP724

 

 

HP at #10?  The company just restructured into two companies, as their original structure (including supply chain) lacked the capability to succeed.  CNN Money, Greg Wallace and Chris Isidore, October 6, 2014, “The company said the split will give both companies the focus, financial resources, and flexibility to adapt more quickly to the market…” So, what has been in place lacked focus, financial resources, and flexibility!

 

This is probably driven by the significant change in HP leadership over the past 10 plus years.

 

1992-1999 – Lew Platt

 

1999-2005 – Carly Fiorina

 

2005-2010 – Mark Hurd

 

2010 – Leo Apotheker – 11 months

 

2011-2015 – Meg Whitman

 

2015 – Don Weisler

 

This is one where I’d love to hear follow up on what the 38 Gartner Analysts saw in HP that the 185 Peers did not see.

 

A Challenge to get back to the “Oscars”

 

When I was at AMR Research, the Top 25 just seemed more like the Oscars.  A gala event with some unique and significant speakers.  I must say that I do enjoy hearing the keynotes, and throughout the past 10 years, they have provided great learnings to apply to supply chain as well as personal growth.  However, I would like to see more globally impactful keynotes.

 

                                                                               
2006Alan Greenspan13th Chairman of the Federal Reserve
2006Bill Clinton42nd President of the United States
2007Colin Powell65th US Secretary of State, Four Star General
2007Bill BradleyUS Senator New Jersey
2008Vincente Fox55th President of Mexico
2009Michael EisnerCEO Walt Disney
2010T Boone PickensBP Capital Mgmt
Gartner acquires AMR Research
2011Rick FrazierVP SC Coca Cola
2012John KernSVP SC Cisco
2013Jim CollinsAuthor – Good to Great
2014Mark JefferiesAuthor – The Art of Business Intelligence
2015Guy KawasakiCTO Apple, The Art of Innovation
2016Joby OgwynMountain Climber

 

 

Perhaps it’s just me, but my ask to Gartner is to bring back the “Awards” feel.  Pass out trophies and have the winners come to the stage… just like the Academy Awards.

 

Early Prediction for 2017

 

The easy prediction is Amazon into the Masters category.  2017 will make Amazon be in the top 5 for 7 out of the past 10 years.

 

While Gartner has been pushing Intel for many years (Analyst have Intel at #4, while the Peers have Intel at #11), Intel is facing some significant structural changes and competition.  So, Intel stays at #4 for a third straight year.

 

The early indicators show that Unilever won’t lose the top spot in 2017.  Unilever has strong Peer and Analyst ranks, which should keep them from falling in the Composite Score.

 

I am predicting that H&M will rise up into the Top 3 for 2017.  H&M has a big strategy to grow into the Indian Middle Class.  2016 Peer rank of #17 and Analyst rank of #19, provides good flexibility to move up in those two categories.

 

Here’s to hoping a new trendy category doesn’t get created in 2017… unless it’s got something to do with CORE supply chain value.

 

The post And I thought last year’s Top 25 Supply Chain was a surprise appeared first on The 21st Century Supply Chain.

 

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Originally posted by CJ Wehlage at http://blog.kinaxis.com/2016/06/thought-last-years-top-25-supply-chain-surprise/

by Trevor Miles

What I took away from the Gartner Supply Chain Executive Conference

 

Supply Chain Management is a relatively young practice, though many of the core principles go back many decades and are based on Operations Research concepts. These have focused on optimization and efficiency. Undoubtedly the world is a better place because of this focus on manufacturing and distribution efficiency over the past 50 years, resulting in large gains in productivity and therefore standards of living, initially in the West, but more recently around the world. All of this productivity gains was achieved in the analog phase.

 

We are now entering the digital phase of business. Even if we discount a great deal of the hype for what it is, hype, the reality is there has been a significant shift to digital. The focus of the recent Gartner Supply Chain Executive Conference was on the manner in which companies can adapt to the digital world while still operating in the analog world. Hence bimodal. As outlined in the diagram below, the bimodal approach advocated by Gartner is about innovating on top of a stable platform. Once the value of the innovation has been captured and stabilized it can be drawn into the stable platform.

 

Gartner Supply Chain Strategy

 

“Disrupt or Be Disrupted — Defining the Bimodal Supply Chain”, 30 December, 2015 Analyst(s): Dana Stiffler | Jane Barrett | Debra Hofman | John Johnson

 

The keynote, delivered by David Willis of Distinguished Analyst at Gartner, describes the bimodal shift as:

 

The shift requires a new approach to investment in technology, leadership and talent, taking a more agile approach. The bimodal supply chain combines stable best practices with innovation-seeking behaviors to keep your organization competitive.

 

I have no question that Gartner is correct in their assertion of the need for a bimodal approach to the adoption of digital technology, whether more broadly to the business in general or specific to supply chain processes. Industry 4.0 is a reality. The Internet of Things is a reality. The only question is how quickly companies will absorb these innovations and adapt processes to accommodate them.

 

My opinion, however, is that the bimodal approach has little to do with technology and everything to do with talent and operating models, especially in supply chain. As a practice we are a bunch of engineers who have been trained and taught to value precision, efficiency, and repeatability over approximation, effectiveness, and agility. The manner in which our practice is measured and organized emphasizes functional excellence at the expense of end-to-end effectiveness.

 

In fact Jane Barrett of Gartner makes this point in a blog titled “Build a Bimodal Supply Chain and Take Charge of your Digital Future!” by stating that

 

In mode one Supply Chain must continue to focus on efficiency and operational excellence – the traditional operational caretaker. In mode two, in parallel, you must be able to experiment, fail (fast), innovate and embrace new crazy ideas. This needs different people, incentives and culture. You must hire data scientists and sociologists, experiment with drones and other smart machines, harness unstructured data and design e2e connected processes like never before. Analytics must become embedded and mainstream.

 

People in their late 20’s and early 30’s, such as Mathilde Drouin who presented at the Gartner Supply Chain Executive Conference on Schneider Electric’s strategy for customer co-planning, the next generation CPFR, requiring deeper cooperation between trading partners.

 

My generation, in their late 50’s and early 60’s, needs to provide space and opportunity for the millennials to flourish and teach these old dogs a trick or two.

 

As evidence of the need for fresh talent, I refer to a senior executive in a pharmaceutical company. She told me that a few years ago she got tired of being told by senior supply chain people that certain analysis could not be done, and that processes had to remain as they are and had been for some time. She hired a bunch of interns from a local prestigious MBA program and told them to spend the first half of the internship trailing the senior supply chain people in order to understand the type of decisions they were trying to make on a daily basis and the difficulties they were having in analyzing their options. Their task in the second half of the internship was to show the senior supply chain people that the data required for the analysis was available, but that the senior executives did not have the skills to gather and analyze the data. After the exercise a number of the senior people chose early retirement.

 

Just a few weeks ago one of our CPG customers went through a major reorganization of their supply chain planning organization. At the top are two men in their late 50’s, one in business, and the other in IT. Reporting into both of them is one person, in their mid-40’s, who is both business and IT, but comes from IT. Below him are a bunch of people who come from business and IT. I couldn’t tell from their titles whether they were business or IT focused. And in that statement I am capturing the transformation that is taking place. The new generation is coming through for whom “IT” skills are as normal and as requisite as financial skills.

 

What we had to learn, they know. We need to give them the space to redefine the practice of supply chain. This isn’t just about technical skills. More importantly it’s about a more collaborative and cooperative way of working. I love it. I hope you do too.

 

 

 

The post Move over old man. It’s time to meet supply chain planning 4.0 appeared first on The 21st Century Supply Chain.

 

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Originally posted by Trevor Miles at http://blog.kinaxis.com/2016/05/move-old-man-time-meet-supply-chain-planning-4-0/

by Alexa Cheater

Innovative Supply ChainInnovate to survive. That’s the key message I took away from this year’s Gartner Supply Chain Executive Conference. While that may not be exactly what Gartner had in mind—the official theme was The Bimodal Supply Chain: Tackling Today, Preparing for Tomorrow—it was a running dialogue across all the sessions I sat in on.

 

Their idea of the bimodal supply chain in essence breaks things down into two ‘modes.’ Mode one focuses on tackling the issues your supply chain is facing today. Mode two is about innovation and growth, and the point was made in a number of sessions that you need to do both if you want to excel. If you’re someone who looks forward to change, who seeks it out because it’s inspiring and exciting, then mode two may seem obvious. You’ve likely already embraced this era where innovation across all facets of life has exploded and become ordinary.

 

To me, innovation, aka what’s driving mode two of Gartner’s bimodal supply chain model, is already intertwined in our day-to-day lives. Hasn’t it always been to some capacity? Innovation is what has taken us from the birth of the internet to this growing concept of the Internet of Things and now beyond.

 

We know innovation is important, it’s what moves us forward. History has proven that notion over, and over, and over again. Just look at the advancements in supply chain courtesy of innovation like MRP I, MRP II, and APS. Without them, we likely wouldn’t have been able to keep pace with the widespread globalization that has led to extensive supply chains and an explosion in product portfolios. I do agree strongly with Gartner that while we may all know how critical innovation is, we have to face the reality that actually achieving it is hard. Very hard. And in most cases true innovation isn’t just going to happen on its own. At least not in siloed, conservative organizations.

 

As keynote speaker David Willis, Chief of Research for Mobility and Digital Workplace, Gartner, said in his session Innovate Under Every Condition: The Bimodal Supply Chain, there is no formula for innovation. But you can make it easier for it to blossom by changing how you measure success, how you respond to failure, and how you view your most important asset—your workforce.

 

Willis explained very articulately how people can be a real competitive advantage to your business, but in many cases it requires a shift of control and a new way forward. You can’t just focus on cost optimization if you want to get ahead in today’s changing business landscape. Navigating the often hostile organizational politics that surrounds these types of disruptive ideas is why fostering innovation is so darn challenging. There’s a fear of change, and even worse, a fear of failure. But the old adage about no risk, no reward, came from somewhere.

 

For most businesses, unless you happen to work for a startup, the risks still need to be balanced with ensuring the success of current day-to-day operations. With growing economic pressures impacting virtually every vertical, the funds allocated to those possible failures is often the first on the chopping block. But Willis notes, “You can’t cut your way to growth.”

 

He also talked about having a separate branch of the organization solely focused on innovation. That way, the day-to-day doesn’t interfere with new ideas, and vice versa. So how exactly do you accomplish that? Lock a group of employees in a room and tell them to innovate? Well, maybe.

 

Chris Tyas, Senior Vice President Global Head of Supply Chain from Nestle was also one of the keynote speakers at the conference, and he talked about Supply Chain Innovation & Excellence: Engaging 36,000 Supply Chain Brains Across the World. He outlined Nestle’s approach to fostering innovation across their employee base. And while it doesn’t exactly involve locking employees in a room, it does give them a defined safe space in which to be creative and innovative.

 

They’ve borrowed from social media trends and created an internal crowdsourcing app, where any employee can put forward an idea, and have it validated and built upon by their peers. They even film these new idea pitches in Shark Tank style, providing company-wide recognition. For them, it’s about taking advantage of the 36,000 minds that make up their supply chain workforce. They’ve realized their employees are often the best source of new ideas, and have provided an easy, safe way for them to bring them forward. I found it a really intriguing idea, and one that seems to have yielded positive results.

 

So ask yourself this: If you know innovation is critical to your company’s success (and I think that’s been well established at this point), what are you doing to actually help foster it within your own four walls? It’s time to break out of business as usual. It’s time to take some risks. And it’s time to make sure you’re not just talking about innovation, but actually taking measures to help your employees make it happen!

 

The post Innovate to Survive—Isn’t That Already the New Norm? appeared first on The 21st Century Supply Chain.

 

blog-email-power-of-technology-kinaxis

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2016/05/innovate-survive-isnt-already-new-norm/

by Alexa Cheater

Is Your Supply Chain the Tortoise or the Hare?In Aesop’s Fables there is a very famous story about a tortoise and a hare. For those of you unfamiliar with this children’s classic, the moral of it is this—slow and steady wins the race. Except of course, if you work in supply chain.

 

While turtles and tortoises have many wonderful qualities that should be celebrated as part of World Turtle Day, their characteristically slow pace and unhurried nature can prove detrimental to any business trying to keep up in this digital age, and the rapidly changing consumer demands that go along with it.

 

Now that’s not to say I’m advocating rushing headlong into anything without some thought. Your supply chain does need to be at least part tortoise in that aspect. There’s value and protection in stability. But if you spend all your time planning, are you really going to be prepared when the course unexpectedly changes direction? If your first thought is to go back to the planning stage to factor in this new variable, you may soon find yourself left in the dust of a much faster paced and agile competitor.

 

My colleague CJ Wehlage has described speed as the true innovation in supply chain. He talks about the ability to act on change in minutes, bringing your suppliers, distributors, shippers, etc. together and getting everyone on the same page as quickly as possible. Digital technology has enabled your customers to make decisions more rapidly and confidently, making the process that much more efficient and effective. Shouldn’t your supply chain be able to do the same?

 

Dominic Thomas, Kinaxis, vice president of business consulting, uses a great analogy to explain it. He says to think of your supply chain like Google. You type in your question and expect to get an immediate list of possible answers. You don’t expect to have to wait hours, days, or weeks for the results to be returned. And you shouldn’t have to—not even when it comes to understanding the repercussions and impact of decisions across your supply chain network. Advanced analytics, real-time data visibility, and rapid scenario simulation capabilities are all current realities thanks to the evolution of supply chain management technology.

 

If you’re struggling to transform your supply chain from a tortoise into a hare, well-known research firm Gartner has some advice that may help. They’ve outlined seven steps to improving supply chain process velocity. Chief among them is the ability to advance through the Plan-Do-Check-Act cycle, moving your organization in the desired direction using their concept of SMART (specific, measurable, actionable, relevant and time-bound) objectives.

 

Essentially, you need to concurrently and continuously plan, monitor, and respond to changing variables in a single environment and across business functions. That allows the ability to shrink supply chain planning cycles and response times, while improving the accuracy of analysis and profitability of actions.

 

Getting there means turning your supply chain into a hybrid. One part tortoise to allow for planning and forecasting, and two parts hare to enable the ability to know sooner and act faster.

 

The post Is Your Supply Chain the Tortoise or the Hare? appeared first on The 21st Century Supply Chain.

 

blog-email-power-of-technology-kinaxis

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2016/05/is-your-supply-chain-the-tortoise-or-the-hare/

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