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21st Century Supply Chain

1,191 posts
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.

 

The post An optimist’s view of Blockchain in supply chain: Learnings from Bitcoin appeared first on The 21st Century Supply Chain.

 

Get started with AI in SCP

 

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.

 

Get started with AI in SCP

 

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.

 

Get started with AI in SCP

 

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

by John Westerveld

Collaboration in supply chain managementWhen scrolling through my news feed Friday, I found this article from SCN: Collaboration Key in Creating Competitive Advantages Through Supply Chains“.

 

The article describes research recently published by the University of Tennessee, Knoxville’s Global Supply Chain Institute. You can download the report here. There were some interesting ideas that came out of this study, like how collaboration in supply chain management is key to success. While some may be obvious to you, others you may find insightful.

 

“As complexity and consumer and shareholder expectations increase, CEOs and supply chain professionals must retrain their focus on contributing to strategic initiatives instead of solely on fulfilling demand as cheaply as possible.”

 

I love this concept. So many times we’ve seen what were once excellent companies that focused on customer satisfaction and quality goods, fall prey to the siren call of “cut costs at the expense of all else”. The problem with this approach is that if cost cutting is the only metric, you soon start making decisions that impact the quality of your product and the reliability of your supply chain. For example, choosing the lowest cost supplier over one that provides better quality and delivery guarantees.

 

So, if cost cutting isn’t the focus, what is? As the article points out, great companies start and end improvement projects with the customer.  As Apple has shown us, it’s possible not to be the low cost vendor and still be fantastically successful by selling on quality and innovation.

 

“The supply chain cannot be integrated unless the end-to-end supply chain activities that must be integrated are fully understood.”

 

This is a key idea. How do you collaborate with people in other plants, departments or using other systems if you can’t see the end-to-end data in a consolidated system? If one plant uses one version of SAP, another plant uses a different version and your warehouse uses Oracle, how does collaboration happen between these systems? Typically by e-mail and Excel…hardly an advanced collaboration approach!

 

“In order to collaborate with other supply chain disciplines, business functions, and external partners, teams must have the tools, systems, and data to enable the work. These tools and systems must be efficient and the data easy to understand. “

 

Similar to the previous point, collaboration doesn’t happen on its own. There are numerous factors that drive successful projects to bring about business improvements through enabling collaboration, not the least of which are tools that enable this collaboration.

 

Tools for video conferencing, team collaboration and in the near future virtual reality and augmented reality, along with Supply Chain planning systems can (and should!) enable collaboration.

 

Wait…what? My supply chain tool enabling collaboration? That’s crazy talk!

 

Yes, actually, supply chain planning tools CAN enable collaboration…if you choose the right tool. So, what collaboration capabilities should you look for in your supply chain planning system?

 

  • Scenario based simulations – A key part of collaboration is about understanding the tradeoffs of various decisions. The best way to understand these tradeoffs is through multiple what-if simulations where you model the changes, score them against key corporate metrics and compare the results to drive to the best overall solution.
  • Fast, In-memory analytics – Related to the first capability, modelling different approaches simply won’t work if it takes your ERP system several hours (or worse, an overnight batch run) to calculate and report the impact of these changes. Your planning tool must be able to calculate the results of changes across the entire supply chain in seconds.
  • End-to-end visibility – As mentioned above, a key component of collaboration is knowing that you need to collaborate. If there’s an issue preventing a delivery goal that exists at a feeder plant, but all you can do with your planning system is view your own plant, the only collaboration option you have is Excel and e-mail. But, what if you had a planning system that could bring data together from multiple ERP systems into a single view and at the same time emulate the planning logic from each of those systems so that the results you saw in a single system matched the results expected from each ERP system? Furthermore, what if you were given visibility and drilling tools that allowed you to identify the root cause of delays with a few clicks of the mouse, even if that delay is in a different plant using a different ERP system? This capability is what truly enables enterprise wide collaboration.
  • Responsibility – Just as end-to-end visibility is crucial to understanding the root cause of a delay, it’s equally important to find out WHO is responsible for that part so that you can start the collaboration process. For example, let’s say you are a customer service rep at HQ and you’ve discovered a critical customer order that was previously on-time is now going to be late. Using the end-to-end visibility capability described above to determine what part is causing lateness, you see that it’s a feeder plant three tiers down the supply chain. Who do you contact at that site? What if your supply chain planning tool could provide the name and contact information for the person responsible for that part?
  • Collaboration – Continuing from the previous point, now that you’ve identified the person responsible for the part, what if you could share with them the exact view you are looking at and have them view the exact same information on their system, complete with links and references to other planning data?  What if other people could be invited to join the collaboration as needed? Furthermore, what if this planning tool included a running log of the collaboration activity, including comments, screenshots and decisions? And even further, what if this tool tracked the progress of achieving the goals of the collaboration, and all of it could be archived and reviewed down the road?

Many companies haven’t fully embraced the power of collaboration across the supply chain because they (wrongly) believe there are no supply chain planning tools that enable collaboration, and as such, are missing out on the capability that can take their supply chain to the next level.

 

I’ll leave you with another quote from the report that hits the nail on the head:

 

“If your procurement, operations, and logistics functions aren’t world class or aren’t aligned to work together seamlessly to delight your customers while minimizing excess cost and working capital, you may be leaving money on the table. Even worse, your company may be at risk”

 

What do you think? How does your company collaborate on supply chain issues? Comment back and let us know.

 

The post Collaboration in supply chain management is key appeared first on The 21st Century Supply Chain.

 

Get started with AI in SCP

 

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

by Alexa Cheater

A pragmatic approach to getting started with artificial intelligence in supply chain planningReal, practical steps you can take today to start implementing artificial intelligence (AI) and machine learning (ML) in your supply chain planning

Stop struggling and start implementing! Join us on Tuesday, November 28 at 2pm ET to learn directly from companies like Merck and Schneider Electric in our latest webinar, A pragmatic approach to getting started with artificial intelligence in supply chain planning.

 

Find out how these companies overcame barriers and put their latest AI and ML innovations into action. Hosted by SupplyChainBrain’s Senior Editor Robert Bowman, our expert panelists include:

 

  • Brian Tessier, VP Global Supply Chain, Schneider Electric
  • Paul Cocuzzo, Senior Director ERP Program Integration and Operation, Merck
  • Trevor Miles, Thought Leader, Kinaxis

They’ll delve into topics like:

 

  • The current state of AI/ML in supply chain planning
  • Why pragmatic use cases are few and far between
  • What supply chain planning problems AI/ML can actually help solve
  • How organizations can get ready for this technological transformation

You’ll even have the opportunity to ask questions and take part in the discussion. Don’t miss this opportunity to discover how to get started with AI and ML in your supply chain planning!

 

    
REGISTER NOW AND TAKE THE FIRST STEP ON YOUR AI JOURNEY

The post [Webinar] How to get started with artificial intelligence in your supply chain planning appeared first on The 21st Century Supply Chain.

 

Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning

 

Originally posted by Alexa Cheater at https://blog.kinaxis.com/2017/11/webinar-get-started-artificial-intelligence-supply-chain-planning/

by Bill DuBois

natural disasters If you had anything to do with supply chain planning in the early days of enterprise resource planning (ERP), you may consider those years the “good ol’ days”. Spreadsheets were the latest and greatest thing, your biggest headache was a supplier failure, and collaboration meant walking down the hall to visit with your buyer or dropping by the shop floor to check on a machine breakdown.

 

Times have changed. Supply chain planners (I’m lumping in all the silos, including demand, supply, inventory and capacity planning) today are dealing with challenges that were unimaginable when Lotus notes were the next big thing. Arguably, changes to the good ol’ days started with product proliferation, increasingly shorter product life cycles, globalization and a more educated, demanding customer.

 

Aligning the supply plans to these new volatile demand profiles was no easy achievement. However, none of this physically destroyed your supply chain. The increase in extreme weather events is becoming commonplace for the supply chain community and the challenge of managing around these supply chain disruptions is the new norm.

 

Natural disasters and supply chain disruption

It would be easy to talk climate change and the causes behind them but that would be irrelevant to this discussion. Let’s just look at some events:

 

  • 2017 – Hurricane Irma (plus others)
  • 2016 – Hurricane Matthew (plus others)
  • 2015 – Nepal earthquake, 7.8 magnitude
  • 2014 – California wildfires (150 homes destroyed, massive power outages. The year seems to be interchangeable, just looking to get wildfires on the list.)
  • 2013 – Massive tornado packing 200 mph winds in the Oklahoma City area. (See 2014 side note)
  • 2012 – Hurricane Sandy
  • 2011 – Japan earthquake / tsunami and Fukushima disaster
  • 2010 – Haiti earthquake

I’ll stop there. It wasn’t hard to find numerous examples for any given year in the past decade. Even if for some unknown reason you think climate change is a hoax, it doesn’t matter, these events will continue to be the new way of life for all of us, including supply chain practitioners. According to the New England Journal of Medicine, there were three times as many natural disasters between 2000 and 2009 compared to 1980 to 1989.

 

Planning for natural disasters in the supply chain

For any single event, supply chain planners now must deal with increased demands, limited supplies, risk to transport networks – which could include physical damage or people supporting the network not being able to get to work – and pricing spikes to fuel and other limited commodities.

 

For a small bit of good news, supply chain leaders know this and are putting strategies in place to deal with this new reality. The technology is there to support the risk preparedness, including:

 

  • End-to-end network visibility
  • Global collaboration
  • Quick scenario / resolution modelling before and after the event

See my blog on Hurricane Irma and the things planners are doing to prepare for catastrophic events.

 

I may have exaggerated adding “storm chaser” to the supply chain planning title. I doubt any planner will be starring in the remake of the movie “Twister” anytime soon, but these people will be as tuned in to these new realities as much as any meteorologist. However, calling the supply chain planner a “network” planner is something worth considering.

 

Given how critical and time sensitive any response is to managing the aftermath of a natural disaster, can we afford for assessments and solutions having to go through a number of functional silos before they’re put into action? Is there a way to speed up the preparation and response times for these extraordinary situations?

 

Although improvements are being made to supply chain planning as part of the recognition that severe weather events are a regular challenge to deal with, it’s being done on the foundation that supports the normal mode of operation.

 

Perhaps we haven’t reached the tipping point for the network planner. The technology is surfacing that would support a new mode of operation, but are the functional experts still too engrained in our supply chain processes?

 

I know a number of demand planners and forecasters who, as statistical gurus, could hold their own with any seasoned mathematician. Is running a multi-echelon inventory optimization even something a capacity planner has interest in? They may be too busy looking at constraint challenges or alternate sources of supply.

 

Much like artificial intelligence (AI) and machine learning (ML), there is still a lot of hype about the network planner. But like AI and ML, network planning is grabbing the attention of supply chain leaders. It’s just a question of priority. Will it be something that we evolve to as part of supply chain transformations, or will it be out of necessity and a need to manage the new supply chain planning landscape?

 

Your guess is as good, if not better, than mine. I haven’t met a network planner yet, but I’m looking forward to that day. Let me know how soon you think network planners will be handing out business cards.

 

The post Good-bye siloed, functional planner. Hello storm chasing network planner. appeared first on The 21st Century Supply Chain.

 

Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning

 

Originally posted by Bill DuBois at https://blog.kinaxis.com/2017/11/good-bye-siloed-functional-planner-hello-storm-chasing-network-planner/

by Mike McAllister

Kinexions - Kinaxis“Hi, my name is Mike. I’m the new Influencer Relations Manager here at Kinaxis.”

 

That’s the line I delivered dozens of times over the span of two and a half days to customers, analysts, and co-workers alike at Kinexions ‘17 in Orlando, to which one reply came, “What exactly does an Influencer Manager do?” I was about to find out.

 

To provide a bit of context, I started at Kinaxis just one week prior to Kinexions. Just. One. Week. Though that may sound somewhat ominous, the expectations on my attendance and participation were reasonable, and quelled any concern over having to understand the industry right out of the gate.

 

The mandate was simple: to meet as many people as possible, analysts, customers, and co-workers included. And listen. Listen to the language of the industry and absorb as much as I could in a short amount of time.

 

The opportunity to dive in to all things Kinaxis right out of the gate proved invaluable. I quickly discovered that in many ways supply chain management was something to which I could easily relate. Something that was both immediately accessible yet infinitely complex.

 

With so much information to consume over a short amount of time, I came away from Kinexions with two distinct takeaways.

 

First, the importance of concurrent planning and how it brings a company’s internal resources together with external resources regardless of where they are in the world, all based on a single data source. When you think about it, that’s pretty astonishing when one considers the scope of the logistics involved.

 

And second, Kinexions showed me that Kinaxis goes beyond the power of RapidResponse, beyond the process and beyond the planning. Kinexions showed me that Kinaxis is about the relationships the company has built with its customers and with the industry as a whole, and how together we can find better ways to plan, and better ways to deliver.

 

To that end, I drew inspiration from Chris Hadfield, renowned Canadian astronaut and, wait for it, obsessive planner.

 

As Hadfield related during his closing Kinexions keynote, planning is every astronaut’s most valuable asset. Every scenario must be taken into consideration and prepared for as if it were inevitable. No surprises. No sweat.

 

And as Hadfield pointed out, the same applies to our everyday lives, our personal goals, and yes, even to digital supply chain management – a notion Duncan Klett explores in more depth in his post-Kinexions blog.

 

So what’s next for a Kinaxis newbie? Perhaps not surprisingly, the first thing on my list is to make a plan. Go figure!

 

The post Reflections on Kinexions, through a fresh set of eyes appeared first on The 21st Century Supply Chain.

 

Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning

 

Originally posted by Mike McAllister at https://blog.kinaxis.com/2017/10/reflections-kinexions-fresh-set-eyes/

by Alexa Cheater

Supply Chain Planning BuzzwordsMarketing spin or actually making a difference?

 

When it comes to supply chains, certain words seem to be bandied about like the ball at a championship tennis match. Back and forth, over and over, these supply chain buzzwords seem to have an endless lifespan. But are they just creative marketing spin (after all, developing them is kind of part of the job), or is what they stand for actually making a difference in your supply chain planning? I set out to find the answer and share my findings on whether they’re all hype, or actually helpful.

 

Internet of Things – HYPE

Ok, ok, I know a lot of folks may disagree with me on this one. But I stand by my claim that IoT in supply chain planning is more hype than helpful. At least for now. Let me explain.

 

The Internet of Things, often referred to as simply IoT, is hard to ignore. With advancements in technology and new IoT-enabled devices launched daily, there’s little question as to why supply chain leaders are taking note. IHS Markit Ltd. estimates the number of IoT-enabled devices will surge to more than 30 billion by 2020 and 75 billion by 2025.

 

According to Gartner Research Director Andrew Downard, IoT enabled devices power supply chain planning by letting you continuously sense, communicate, analyze and act. In one of my earlier blogs, I recapped his presentation at this year’s Gartner Supply Chain Executive Conference, where he noted several real-world IoT examples, including Coca Cola’s Freestyle machines, HP’s Instant Ink subscription model and Tesco’s virtual grocery stores. He also provided commentary on the rise of IoT order buttons, like Amazon Dash, and the impact they’re having on customer orders.

 

The data these sensor-driven technologies provide is real – but where the marketing hype comes is how much value you can actually drive from IoT on its own. In Downard’s examples, IoT is really limited to just the sense aspect of sense, communication, analyze and act. And sensing on its own doesn’t do a heck of a lot of good. Your supply chain must be able to analyze the data, finding the patterns behind it so you can act by adjusting your supply and demand plans accordingly.

 

As it stands right now, IoT has become somewhat of a red herring. There are two schools of thought when it comes to using IoT-enabled devices in your supply chain planning. The first is centered on copying all that sensor-driven data into a single server for analysis and response. With a near endless stream of numbers flowing in, the requirements for actually storing and making sense of all that data are huge. Even if you do eventually make the investment to be able to do that, the speed at which calculations are completed isn’t likely to be in real-time. Unfortunately for you and your supply chain, real-time is what you need in order to dynamically adjust your planning on the fly.

 

The second school of thought around IoT in supply chain planning relates to the devices themselves getting smarter and actually having analysis capabilities and the ability to communicate with other devices and your supply chain planning system. Instead of copying and storing the data, you’ll be able to ask your system a question, which will trigger a series of queries up the chain and across various IoT devices, combining together to give you back an intelligent answer. This can be accomplished through an API-based economy.

 

For example, if you have a temperature sensitive product being shipped in climate-controlled containers on a cargo ship, sensors on the ship can tell you right now its relative location, and sensors within the containers can tell you the current temperature inside. That only helps you know what the conditions are right now. It won’t provide predictions on if those conditions are likely to change. What you really want to know from a supply chain planning perspective is if there are any patterns, based on current, historical and future projections, that could mean a change.

 

For IoT to become less hype and actually helpful, these smarter IoT devices are needed, along with solid concurrent planning capabilities within your supply chain management platform. It can’t just be about the data.

 

Digitization – HELPFUL

PwC has perhaps one of the best explanations of digitization in supply chain. In the consulting firm’s report on Industry 4.0, it describes how digitization brings down the current siloed steps of today’s supply chains, creating “… a completely integrated ecosystem that is fully transparent to all players involved – from the suppliers of raw materials, components, and parts, to the transporters of those supplies and finished goods, and finally to the customers demanding fulfillment.”

 

While I’m still not sold on the term digitization, the concept behind it is a helpful one. For supply chain planning to succeed in today’s fast paced, globalized, consumer-centric world (like how I added in some more buzzwords for you?), you need to have end-to-end visibility. That transparency must extend beyond your own internal operations to those of external suppliers, distributors, retailers and even the customer. Otherwise, you’ll never be able to continuously plan, monitor and respond to shifting patterns and conditions.

 

Breaking down those traditional supply chain silos is no simple task. In addition to getting your own planning teams (inventory, demand, supply, capacity, etc.) to collaborate and compromise, you’ll need support from other business functions as well, like sales, marketing, finance and the executive team. Why? Because digitizing your supply chain should also lead to digitizing your business. The supply chain can no longer exist in isolation, and is finally being recognized as the next frontier in business optimization and efficiency.

 

Forbes notes that having a digitized supply chain can give your company a competitive edge, but explains that to do so, you need to do the following:

 

  • Connect all the links in your supply chain via unified technology. That means connecting disparate data and legacy ERP systems into one harmonious platform.
  • Start with the desired business outcome first to ensure you’re focused on getting the most value from your supply chain. Your supply chain should be the foundation for new business models.
  • Focus on the customer. Customer-centricity is the most desired business outcome of supply chain digitization, but requires agility, visibility, data and analytics to achieve. Make sure you have the foundational capabilities in place.
  • Ensure your CEO is on board. Supply chain digitization needs to be a high-profile initiative within your company. It requires C-suite champions.
  • Look at the long-term and develop a comprehensive approach. Best-in-class companies are investing more heavily in their supply chains.

Transformation – HYPE

Like IoT, there may be some disagreement on my choosing hype over helpful for transformation. It’s a word used a lot in describing how supply chains have matured. But the fact is, people talk about transformation as if it’s a one-time event with a finish line. That’s not the case, and why I’ve labelled it hype. For one thing, transformation is nothing new. It’s what’s pushed innovation and change across industries worldwide, and supply chain is no exception. Without it, we would never have moved past the industrial revolution, let alone imagined the realm of possibilities now being talked about as part of Industry 4.0.

 

Transformation is an on-going process. It isn’t a one and done kind of thing. I doubt there are many companies who aren’t still looking to further optimize their supply chains, even if they’ve already gone through a “supply chain transformation” project. In most cases, these types of projects are completed in phases, and by the time you reach the end of that long-term vision, it’s time to innovate and transform all over again. At least it is if you want to stay competitive.

 

It’s not that transformation isn’t useful. It is, incredibly so. It’s just that marketing has corrupted the word to make it seem like some big, flashy initiative (I’m guilty of doing so myself), when it should be part of the day-to-day conversation. Transformation, innovation, journey – whatever you want to call it – should be at the heart of how you run your supply chain, and your business.

 

What other supply chain buzzwords do you hear on a regular basis? Let us know in the comments section.

 

The post Top 3 Supply Chain Planning Buzzwords appeared first on The 21st Century Supply Chain.

 

Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning

 

Originally posted by Alexa Cheater at https://blog.kinaxis.com/2017/10/top-3-supply-chain-planning-buzzwords/

by Bill DuBois

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

 

supply chain ceoAnyone who’s been paying attention knows that Supply Chain Management has emerged from its status a back-office function to become a major strategic differentiator for business. Over the past few decades, companies have realized that the way they bring products to market – from sourcing parts and services, to manufacturing, to shipping, to distribution – isn’t just a practical necessity, but an avenue for competitive advantage. For example, we wrote recently about how Amazon’s purchase of Whole Foods Market represents more than a new stream of brick and mortar business, but the possibility of improving its last mile delivery – the so-called “Holy Grail of Logistics,” and therefore gaining a further leg-up over its eCommerce competitors in the grocery category.

 

As a result of technology and big data providing insights about every stage of the supply process, the Supply Chain profession has taken off. What was once seen as either a purely administrative or blue-collar profession has stormed the gates of executive business, with more companies appointing Chief Supply Chain officers – analytical, proven professionals who are able to build relationships with a diversity of internal and external partners, as well as provide the kind of operational excellence that allows companies to get ahead of the competition. An article in the Wall Street Journal called Supply Chain the hot new MBA, outlining how more and more future business leaders are also coming around to seeing the function as a career of the future.

 

In the past few years, there have been more examples of Supply Chain professionals stepping not just into the C-suite, but into the coveted Chief Executive position itself. This great article provided some great perspective on the topic. It comes from Supply Chain Management Review, a leading publication specializing in the field.

 

The article, written by Shay Scott of the Global Supply Chain Institute, describes how the trend of Supply Chain Professionals rising to the CEO position at major companies is only increasing. Scott gives the examples of Apple CEO Tim Cook and GM’s Marry Barra as people who have risen through the Supply Chain function to lead their companies.

 

Apple’s strength, historically and under the leadership of the late Steve Jobs, has undoubtedly been its products. But in the 21st century, more and more have recognized that Apple’s profitability and competitive advantage have come from a world-beating Supply Chain (one analysis from 2012 outlined how the company turns around its inventory in a staggering five days). And Tim Cook’s rise to CEO, in large part, is owing to his transformation of the company operations starting in the late 90’s, reducing inventory and costs, and developing the country’s overseas supplier base.

 

Companies like Amazon are able to achieve major growth through a relentless focus on customer service. And with its drive to ensure products and services are delivered on time, at the right place, with the right cost, Supply Chain is renowned for its customer service success. As the SCMR article says, “The notion that customer service or the supply chain itself often has more importance than the product – think of Amazon – only serves to further emphasize the value of supply chain expertise in senior leadership.”

 

But the development of Supply Chain talent into CEO-ready leaders is about more than focus on customer service and a relentless attention to the bottom line: it also has to do with the function’s increasing integration with all aspects of business.

 

Whereas different Supply Chain functions used to be siloed (planning, operations, procurement, etc.), they’re now more holistically integrated under central leadership and centres of excellence. Beyond that, Supply Chain now touches almost every aspect of a business, and it’s only becoming more involved with functions as diverse as sales, marketing, and finance, as well as operations. This allows senior Supply Chain leaders to develop executive skills and a holistic understanding of an entire business from a strategic perspective.

 

The SCMR article offered some other great advice about how senior Supply Chain professionals can think like CEOs – allowing them to develop their perspectives and skills so as to be able to speak to business leaders and earn a seat at the boardroom table:

 

  • Supply Chain leaders should learn how to speak the language of CEOs. Instead of only using Supply Chain terms like fill rate, inventory turns, etc., they should speak in terms of a given decision’s financial impacts on their companies’ bottom lines (revenue, margin, working capital, etc.)
  • Supply Chain leaders should cultivate an understanding of global trends, political and economic developments, and social changes. This allows the Supply Chain to address global challenges proactively, and to be part of the broader context of the business.
  • Supply Chain leaders should work to forge connections with as many aspects of the business as possible. This means working like a matchmaker to develop relationships between seemingly-disparate parts of the business. This is the kind of added value that true business leaders are able to provide.

For anyone reading the signs and following the trends of global business, it’s clear that Supply Chain’s time has come. While many customers and laypeople haven’t even heard of the discipline (we wrote about how Supply Chain only seems to make the news when there’s a failure), we guarantee they will soon.

 

The post It’s time to welcome the supply chain CEO appeared first on The 21st Century Supply Chain.

 

Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning

 

Originally posted by Bill DuBois at https://blog.kinaxis.com/2017/10/its-time-to-welcome-the-supply-chain-ceo/

by Duncan Klett

Chris Hadfield, KinexionsI was fascinated watching the key note address from Chris Hadfield at the Kinaxis user conference, Kinexions 2017. Canadians and space junkies will know him as the first Canadian to walk in space and as a commander of the International Space Station.

 

While in space, he also did a live stream playing Space Oddity from the ISS. See his web page, http://chrishadfield.ca/ for more information.

 

But, it was not all his accomplishments that made everyone else in the room feel inadequate. It was his level of preparation. As Hadfield said, “Astronauts are not adrenalin junkies. Adrenalin is an indication of lack of preparation and can have fatal results.” Rather, astronauts train for what they must do. They train to handle all the things that might go wrong and for making decisions with incomplete information.

 

During the presentation, especially on hearing about having to act despite incomplete information, I thought more about the role of supply chain planners. What I see is planners spending all their time chasing the latest shortage rather than efficiently planning their supply chain.

 

Following the theme of Hadfield’s presentation, wouldn’t it make more sense for planners to plan?

 

For example, rather than scrambling to find another 100 units, think of how much more effectively planners could use their time by creating a game plan for an increase in demand or changes in the sales mix.

 

Or, plan for what might happen if, let’s say, Puerto Rico endured a severe hurricane, or if Houston was flooded, or if a tsunami hit the Philippines, or if earthquakes occurred in Mexico. All of which happened.

 

Whose supply chains recover most quickly from unpredictable events? The answer is simple. It’s the supply chain with a plan that’s ready to execute should disaster happen.

 

So, the looming question is this… does your supply chain have ready-to-execute plans in place for changes in demand due to natural, or even political disasters?

 

Which brings us back to Chris Hadfield and an astronaut’s level of preparation.

 

Wouldn’t it be better for supply chain planners to spend their time setting planning parameters rather than chasing shortages? Wouldn’t it be better for automated processes to handle routine operations and even some frequent exceptions so that planners could deal with the real exceptions? Wouldn’t it be better for planners to develop game plans for foreseeable events? And, wouldn’t it be better for planners to simulate their plans to be sure they would actually provide a recovery should the event happen?

 

How would you rather have your planners spend their time?

 

 

 

The post How supply chain planners should spend their time, with cues from Chris Hadfield appeared first on The 21st Century Supply Chain.

 

Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning

 

Originally posted by Duncan Klett at https://blog.kinaxis.com/2017/10/supply-chain-planners-spend-time-cues-chris-hadfield/

by Alexa Cheater

Supply chain innovation

 

When was the last time you made changes to your supply chain? I’m not referring to order changes, SKU changes or capacity changes, but rather, the processes and functionality that drive your day-to-day decision making. If it’s been too long to remember, you’re likely lagging behind when it comes to supply chain innovation. That isn’t good news when it comes to keeping up with the competition.

 

Innovation is happening all around us, and at a pace so fast, it may make your head spin. But the reality of doing business in a globally competitive environment is that you have to stay ahead of – or at least be part of – the pack if you want to succeed. For supply chains, the added complexity all this change is bringing about can be daunting. It’s becoming harder and harder to keep inventory costs low while still meeting customer demands for customization, same day shipping and easy returns.

 

Waiting for big, bulky annual releases to your supply chain management software doesn’t really seem to fit with the fast-paced world we live in. Why then is that still the norm for most companies? Wouldn’t you rather get immediate access to the latest supply chain innovations as soon as they become available? That’s the idea behind continuous delivery, and it’s far from new. App developers have been using it for years to provide regular feature updates to your smartphones. So have consumer software companies – just look at Adobe’s Creative Cloud or Microsoft’s Office 365. Yet enterprise software companies still seem to be lagging behind.

 

With yearly software releases, it can take weeks to deploy the new upgrade, and since so much is included in a single installation package, the risk of something going wrong is high. It can also be harder to go back if you’ve had to make major changes to your system to accommodate the new functionality. Add to that the fact that you’re potentially waiting around for 12 months to get your hands on something that could drastically improve your supply chain efficiency.

 

With continuous delivery for your supply chain management software, you get:

 

Lower Risk
Updates are smaller and available more frequently. As a result, these bite-sized packages take less time to deploy, use fewer resources and involve less risk.

 

Faster Value
Stay one-step ahead of your competition. While they’re stuck spending months, quarters or even years on costly enterprise resource planning (ERP) upgrades, only to get yesterday’s basic features, you’ll have near real-time access to industry leading capabilities so you can constantly evolve your supply chain.

 

Higher Reward
With continual access to the latest features and capabilities, you’ll be able to drive sustained supply chain innovation. It’s important to continually increase efficiency and make improvements as you adopt these new releases to help keep you firmly ahead of the pack.

 

Continuous delivery just makes sense for so many when it comes to supply chain management software. Stop and take a minute to think about it – or rather don’t, because the longer you wait when it comes to supply chain innovation, the bigger the gap to catch up to your competition.

 

The post Continuous delivery drives continued supply chain innovation appeared first on The 21st Century Supply Chain.

 

Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning

 

Originally posted by Alexa Cheater at https://blog.kinaxis.com/2017/10/continuous-delivery-drives-continued-supply-chain-innovation/

by Dr. Madhav Durbha

artificial intelligence I am reading this absolutely fascinating book “Deep Thinking: Where machine intelligence ends and human creativity begins” by Garry Kasparov, former world chess champion. As the title suggests, in this book Kasparov shares a highly provocative point of view on artificial intelligence and its implications for the human race, with the backdrop of his 1997 loss in a highly publicized chess match up against IBM’s chess computer Deep Blue. The book did make me reflect on my own experiences and views on the division of labor between the machines and human supply chain planners.

 

Much has been written and said about how machine intelligence is impacting supply chain planning in the form of automating a human planner’s function, with implications on the future of the profession itself. I would be remiss in stating that automation will have no impact on planning profession. Yes! The focus on automation in planning is increasing and will continue to increase. However, this has to take place in the context of empowering planners and significantly augmenting their productivity to handle activities with larger scope and with higher levels of cognition that can drive strategic value for business. When done in a thoughtful and deliberate manner, automation initiatives can significantly benefit planners who are willing to adapt and change, and organizations as a whole.

 

I come across many organizations that made extensive investments in advanced planning technologies with the intent of bringing more automation and standardization into their planning process. However, the tragic reality is that most of these deployments languish, only to see the planners bypass these systems to revert back to their excel spreadsheets and manual means of planning. Recently, I met with a large global process manufacturing company, which after a multi-year deployment of an advanced planning software ended up with 800+ excel spreadsheets that are used to manually generate and adjust base plans and run some basic simulations. The reasons for failure of such automation initiatives are three-fold:

 

1. Automation of “As Is” processes: Technology deployments should provide a great opportunity to rethink the as-is processes in light of the emerging best practices and the evolution of machine intelligence. Newer technologies provide tremendous potential to move to an entirely new way for planners to co-operate and collaborate with their peers to enable a digital supply chain. A very senior executive may buy into such a truly transformative vision. However, by the time the project gets into the design phase, unless the executive who bought into the vision is very deeply engaged, it ends up devolving into an expensive redo of the “as is” processes. This leaves very little incentive for the planners to adapt to the new system, resulting in them falling back into the all too familiar ways.

 

2. Lack of plan explainability and transparency: Let us face it! Supply chains and planning for them are far more complex than ever. In most companies, the bulk of a planner’s time is spent on generating base plans and synchronizing demand plan to supply plan to capacity plan to production schedules. However, most of these planning processes happen in batches with different cadences and frequencies. Most advanced planning commercial software packages subscribe to such batch oriented paradigm only to reinforce it. Keeping these plans in sync as the data constantly changes is quite herculean and results in a high degree of planner frustration.

 

This problem is compounded by black box solvers which don’t provide transparency into how plans are derived. If a planner does not understand why a particular order is getting shorted or why a capacity is getting overloaded, she doesn’t feel confident releasing the plan to execute. Instead, the planner spends an inordinate amount of time trying to validate and make sense of the plan. This proves antithetical to any automation efforts in planning and significantly increases manual activity due to increased time spent on plan validation. Most plans in such situations are dead on arrival by the time they are released for execution. Eventually, planners step outside of their painstakingly deployed commercial applications and resort to excel spreadsheets, defeating any automation efforts.

 

3. Inability to simulate a range of possibilities: As supply chains become increasingly volatile due to demand and supply side events (positive or negative), planners need to simulate a variety of “what if’s” to have multiple plays ready as the situation calls for. They need to do this tradeoff analysis in near real-time. However, the aforementioned batch oriented systems are latency ridden and do not provide quick simulation capabilities. Hence planners resort to downloading the planning system of record data into excel sheets and running simulations (with all too simplistic assumptions) so they can wrestle back control from the black box, batch oriented solvers, and in the process, defeating the automation efforts.

 

In light of the aforementioned challenges, some progressive companies are adapting a “concurrent planning” paradigm wherein they are, in near real-time, simultaneously planning across demand, supply, inventory, and capacities in a fully automated manner. This makes end-to-end plan synchronization a natural outcome, freeing up planners’ time for higher value add activities. A concurrent planning system will have network-wide visibility, along with business rules such as demand priorities, preferred supply paths, lead time and capacity constraints, build ahead limits, expiration policies, and such, all of which are automatically factored into the plans. An “always on” near real-time planning capability eliminates latency in processing data into information.

 

With automated “concurrent planning” as the core foundation, planners bring in the art form by creating scenarios to support the increasingly dynamic nature of their supply chains, truly enabling business value. Running the scenarios and generating scores is done by the machines in near real-time. Planners can now share these scenarios with their colleagues within the enterprise or with external partners across their network to drive system wide benefits, thus bringing in the best of human-machine collaboration.

 

All in all, I see automation doing the heavy lifting for repeatable and necessary processes so the human planners spend time in driving higher value business decisions. Machine intelligence has not evolved to the extent of perfecting the “art of supply chain planning” driven by the human intuition, the contextual knowledge of the business, and the ability to connect the dots between seemingly unrelated pieces of information from multiple domains. Investing in planning automation is a perfectly valid strategy as long as organizations are deliberate in thinking through what activities are best suited for machine intelligence and which are best left to humans. The key here is to enable “Augmented Intelligence” that brings together the best of humans and machines!

 

In the aforementioned book, Garry Kasparov cites an interesting fact. The 1990 rating list of top one hundred chess players in the world included over twenty active players born before 1950. By 1995, there were only seven players of this group remaining in the top one hundred. Kasparov attributed the difference to the democratizing impacts technology had on the chess world. The older players who employed human assistants to practice their game no longer had distinct advantage with the rise of computer chess. The players who embraced computer chess, regardless of their origins and age were able to sharpen their game. The players who clung to the old ways faded away. Similarly, supply chain planners who stay abreast of the emerging processes and technologies, develop end-to-end concurrent planning thinking and make continuing education a habit will thrive. The individuals who rest on their laurels may find themselves increasingly irrelevant!

 

The post Machine intelligence and human creativity in supply chain planning appeared first on The 21st Century Supply Chain.

 

Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning

 

Originally posted by Dr. Madhav Durbha at https://blog.kinaxis.com/2017/10/machine-intelligence-human-creativity-supply-chain-planning/

by Alexa Cheater

From catching up with the very first Kinaxis customer to exploring the future of supply chain, day one of Kinexions, our annual user and training supply chain conference, proved to be an out-of-this-world learning experience, aptly set to a soundtrack of songs by ‘80s rock group Journey.

 

And what a journey day one at Kinexions has been. Here are just a few of the great insights coming from the conference:

 

AI - Kinaxis Kinexions“Artificial intelligence and machine learning aren’t magical pixie dust.”
 John Sicard, CEO, Kinaxis

 

As Kinaxis CEO John Sicard put it, artificial intelligence (AI) and machine learning (ML) aren’t magic, but they can help you create a little in your supply chain. Sicard talked about the notion of a self healing supply chain, one based on machine learning algorithms, which can help you:

 

  • Detect deviations
  • Analyze and make intelligent predictions on what your values should be
  • Heal itself automatically
  • Monitor performance improvement and value over time

Sicard stressed the importance of recognizing that ML isn’t just a platform that lets you do all kinds of cool, futuristic stuff. It’s about building use cases and practical applications that drive real, substantiated business results by comparing as designed to as demonstrated.

 

“AI in supply chain is a lot like teenagers having sex. Everyone talks about it, but no one knows how it’s done.”
 Brian Tessier, VP Global Supply Chain Innovation, Schneider Electric

 

Brian Tessier from Schneider Electric spoke directly about one of those use cases, outlining how Kinaxis and Schneider Electric jointly explored lead time and forecasting scenarios, analyzing 18 million records in the process. Tessier noted supply chain is an evolving process and requires exploration and testing. He too believes in the notion of a self healing supply chain, one that can correct conditions causing problems automatically. It would grab, combine and architect data to solve problems you didn’t even know you had. But he cautions you have to have a concept that really rings true with people – something that’s relatable and inspiring. Otherwise, the project is doomed to fail.

 

“It has to be about improving the quality of life inside and outside of work.”
 Kristen LeBaron, Director of Supply Chain, Lippert Components

 

Engaging users was a lesson Lippert Components learned while going through its demand planning improvement initiative. As Kristen LeBaron, Matt Getz and Scott Meiner explained, their company needed to undergo a cultural shift in order to overcome the kind of internal gaming that was going on. LeBaron described how in the past the company’s decentralized model meant departments were working against each other. One example she gave was how one unit would make as much product as its capacity allowed and then ship it to another internal facility, thus allowing that one business unit to meet both inventory reduction and capacity goals. Unfortunately, it came at the expense of another team, who now had to deal with the inventory. By bridging functional silos and involving end users in the discovery process, Lippert Components was able to overcome the resistance to change when implementing new processes and technology and the fear of the unknown.

 

“RapidResponse plus supply chain equals a dream job.”
 Chris Putzig, RapidResponse Developer and Administrator, Honeywell and Teresa Hastings, Solution Architect, Barkawi

 

Honeywell - KinexionsIn their presentation on extending value since becoming Kinaxis customer number one, Chris Putzig and Teresa Hastings spoke at length about Honeywell’s 20-year journey with RapidResponse and the role user engagement played. While improving efficiencies in part matching has led to savings of a million dollars a year, they believe the real value comes from continual user adoption. All of which helped them move away from spreadsheet-based planning and led to the revelation that there is an easier way. For them, managing supply chains with RapidResponse was the dream job they never knew they wanted.

 

Were you at Kinexions? What other great insights did you take away from the first day of the supply chain conference? Let us know in the comments area.

 

The post AI, ML aren’t magic pixie dust, and other supply chain insights from Kinexions day one appeared first on The 21st Century Supply Chain.

 

Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning

 

Originally posted by Alexa Cheater at https://blog.kinaxis.com/2017/10/ai-ml-arent-magic-pixie-dust-supply-chain-insights-kinexions-day-one/

by Dr. Madhav Durbha

LogiPharma - Pharmaceutical supply chainI was at the recent LogiPharma US conference for the pharmaceutical supply chain leaders. However, most of the insights and the stories I took away from the event are applicable to other industries as well. Here they are:

 

1. Personalized medicine demands supply chain agility: During a highly engaging panel discussion on “Building a patient-centric supply chain”, Kevin Cook, VP of North America supply chain at Sandoz (a division of Novartis) talked about the unique nature of the recently approved Kymriah, CAR-T cell therapy for children and young adults with certain types of Leukemia. The therapy showed an 83% remission rate in the patient population studied! In CAR-T cell therapy, every single dose of a treatment is completely personalized, as it involves extracting the patient’s immune cells, bringing them to a production facility, genetically modifying them, transporting them back (at minus 180oF!!), and then reinfusing the patient to fight the cancer cells. So, personalized medicine is here! With it comes several logistical challenges.

 

While Kymriah is the ultimate example of personalized therapy, there were several attending companies that provided therapies for rare diseases affecting a few hundred to a few thousand patients across the globe. In such a high mix, low volume portfolio, decisions such as how to allocate short supply to patients in case of contamination of a manufactured batch, can be lifesaving. Brad Pawlowski of Accenture said it right during his opening remarks – “Instead of executing one supply chain a thousand times, we should get ready to execute a thousand supply chains, one at a time”.

 

With patents for blockbuster drugs expiring and with generic manufacturers from India and China expanding their market into the US, containing costs through speed and agility is becoming critical to pharma companies. In pharma, manufacturing batch sizes are driven by equipment efficiency. However, now there is an increasing need to be demand driven. Yes…. one cannot speed up the chemical or biological aspects of manufacturing beyond a certain point. But, efforts should be made to ensure speed and agility through the rest of the supply chain.

 

2. Enable agility while leveraging legacy investments: Many attendants have made heavy investments in the ERP systems. However, ERP systems come with the limitations of being inward focused and rigid. The newer cloud based technologies can layer on top of the legacy systems to provide an outside-in view across the extended network without having to rip and replace. One of the presenters talked about how while planning the purchase of API (Active Pharma Ingredient) for new product launches, his team plans across a range of optimistic and pessimistic scenarios for demand and make purchase decisions while weighing risks. Being able to quickly run such scenarios is not the realm of ERP systems or even several established advanced planning systems. However, newer technologies coexisting with legacy can help extract the best of both worlds.

 

3. Find the right home for your data scientists: While facilitating a panel discussion on enabling digital supply chains, Hussain Mooraj of Deloitte shared an interesting story of a disillusioned data scientist who recently left a large global pharma company. Hussain asked him why he left such a great company after a short stint. The data scientist said that this company did not know what to do with him! So, they placed him in IT with the group that is working on the ERP master data maintenance, which is an entirely different skillset. They had no career path for him and he ended up leaving the company. While leading in with this story, Hussain asked the panel where data scientists should belong in an organization.

 

Priya Durvasula, Head of Global Supply Chain IT at Bristol Myers Squibb responded that they formed a group called Business Insights & Analytics that reports into the CFO organization, with the leaders of the group having business, finance, and analytical background. They placed the data science teams in this organization. While there is no one right answer to the question, it is fair to say this type of structure would have provided a better home andcareer path for the individual in Hussain’s story.

 

4. Prepare for the Amazon effect: Amazon’s intent to get into pharma distribution came up in my conversations with several attendees. In a fireside chat, Scott Chilson, VP, Global Customer Experience of J&J, and Mike Douma, VP of Supply Chain of AbbVie, discussed how Netflix, Airbnb, Uber and of course, Amazon have disrupted many traditional industries loaded with higher cost models, and how Amazon could change the game for Pharma. There was general consensus that the rising healthcare costs are unsustainable (no surprise!!) and that supply chain professionals can play a key role in lowering these costs. Any move by Amazon should only accelerate such change in thinking.

 

During this chat, there was a question about who the customer is in the pharma world – whether it is the hospital purchasing the drug or the wholesaler or the distributor or the patient. Their response was that if we start with the patient as the customer, it becomes easier to find a common ground with the other stakeholders. There was also some discussion on patients using smart wearables to monitor their vitals, blood pressure, glucose levels, etc., and how this information may be leveraged to compress the cycle times for the supply chain. However, significant hurdles remain due to consumer privacy concerns.

 

5. Improve product launches through a cross-functional process: In an industry that places a high premium on innovation, launch process is quite crucial. In a very informative talk on “Improving new product launches”, Tiffany Cavallaro, Director of US Supply Chain for Amgen shared how they were able to successfully launch 94 new products in the year 2016 alone. Here are some key enablers:5.    Improve product launches through a cross-functional process: In an industry that places a high premium on innovation, launch process is quite crucial. In a very informative talk on “Improving new product launches”, Tiffany Cavallaro, Director of US Supply Chain for Amgen shared how they were able to successfully launch 94 new products in the year 2016 alone. Here are some key enablers:

 

  1. Charter a focused team to support launches
  2. Engage early with the commercial teams
  3. Map the end-to-end value stream and know the critical starting materials by working closely with R&D. Mitigate risks by negotiating expedited lead times where needed
  4. Keep manufacturing well informed
  5. Ensure distribution capacity is in place
  6. Communicate, communicate, communicate

She described supply chain management as the ultimate cross-functional role. Well… I suppose no need to look beyond her above list to prove the point!

 

Besides the above, blockchain was discussed, of course! While potential for the technology exists in the form of healthcare data exchanges, drug supply chain integrity and such, no company raised their hand to say they have proven use cases with demonstrated benefits. Lack of interoperability standards, lack of widespread understanding of the technology, and costs of enabling private blockchains are some of the challenges. But with the technology evolving fast, at the least supply chain professionals should stay tuned into what is happening.

 

On the whole it was a content rich event. Several attendees commented on how Pharma industry as a whole is lagging behind other industries when it comes to supply chain management. But then, I look at this as an opportunity. Pharma supply chain is in the advantaged position of being able to leapfrog into the digital world by taking cues from other industries that blazed the trail. Some market-leading pharma companies that I have been engaged with are taking full advantage of this position. That wraps it up for me! Would love to hear your thoughts!

 

The post Supply chain agility, the disillusioned data scientist, Amazon effect, and other tales from LogiPharma US 2017 appeared first on The 21st Century Supply Chain.

 

Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning

 

Originally posted by Dr. Madhav Durbha at https://blog.kinaxis.com/2017/10/supply-chain-agility-disillusioned-data-scientist-amazon-effect-tales-logipharma-us-2017/

by Alexa Cheater

global supply chainLove them or hate them, it’s hard to escape the proposed sweeping changes to America’s trade policy put forth by US President Donald Trump. From withdrawing from the Trans-Pacific Partnership (TPP) to re-negotiating the North American Free Trade Agreement (NAFTA), it’s clear the 45th President of the United States is pushing ******* an America-first agenda. But what impact will his trade policy changes have on your end-to-end supply chain?

 

Supply chain risks

The majority of US manufacturing leaders are optimistic about this shift toward more business-friendly policymaking, at least according to a recent survey by the Aberdeen Group and consulting firm TBM. Their research found as a group, manufacturers anticipate a 1.8% increase in profits and a 1.6% revenue gain from proposed tax, regulatory or trade policy changes. What remains unclear is the potential fallout of any changes to international trade agreements, which could be devastating to companies running global supply chains.

 

According to the 2017 Aberdeen Supply Chain Readiness Research Study, tax structure changes are likely to have the biggest impact on financial results over the next few years, but unfortunately for you, that’s largely out of your control. What you can control is how you mitigate the supply chain risks associated with any negative impact of changes to foreign trade agreements. That means knowing:

 

  • What could change?
  • When could that change happen?
  • How will it affect current cost structures?

It also means starting collaborative discussions with customers, suppliers and manufacturers to make sure you can still strike the right balance between service levels, working capital and costs. Changes in foreign trade policies could shift supply chain variables like energy and supplier costs, customer and supplier relationships, distribution networks, and manufacturing strategies. And it isn’t just red, white and blue companies who will feel the impact.

 

America’s trade policy will have a ripple effect on businesses – and global supply chains – based outside the US. The cost to sell your goods to American customers may go up as new duties and import taxes are levied. It could become more difficult to use the US as a distribution or logistics hub for bordering countries like Canada and Mexico. You might even see implications on being able to manufacture within America’s borders if you aren’t a US-based corporation.

 

Supply chain readiness

No matter what happens in Washington, having the right supply chain capabilities will help you respond quickly to any policy changes. But Aberdeen’s research revealed an unsettling reality where companies’ supply chain priorities don’t align to their current abilities.

 

Some of the areas of biggest concern are supply chain network design, and inventory planning and optimization, which were ranked second and third on the priority list, with readiness well below their perceived importance. The one bright spot was sales and operations planning (S&OP), which business leaders ranked as the most important priority – and the supply chain process they’re most ready to run with. However, even with that high level of supply chain readiness when it comes to S&OP, that critical business function still isn’t without its challenges. Survey respondents noted that people represent the biggest stumbling block on the path to S&OP readiness. That’s not surprising given the heavy reliance on collaboration, compromise and trust required.

 

End-to-end supply chain technology itself was the largest hurdle for nearly every other priority in Aberdeen’s list, with inventory planning and optimization, and manufacturing capabilities feeling the most restricted. Supply chain network design, and demand planning and forecasting, were most impacted by poor processes.

 

Supply chain competencies

Economic and market trends beyond your control can have a real, lasting impact on progress toward your strategic and financial goals. Prepping your supply chain in advance to deal with any uncertainty, or unexpected opportunities, requires building the right foundation.

 

That means connecting data, people and process into a single, harmonized system that allows you to continuously and simultaneously plan, monitor and respond across your end-to-end supply chain, aka concurrent planning. Collaboration and the ability to rapidly simulate anything, anytime, anywhere are critical success factors. Don’t wait for the fallout of changes to US foreign trade policies and tax structure.

 

Examine your supply chain today to see what options you might have in terms of shifts in suppliers, manufacturers, distribution routes, etc., so if policy changes do impact you, you’ll have a plan of action in place and know your options when it comes to how best to maintain customer satisfaction, market share and your bottom line.

 

The post Are you ready for the fallout? How proposed US trade policy changes will impact your end-to-end supply chain appeared first on The 21st Century Supply Chain.

 

Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning

 

Originally posted by Alexa Cheater at https://blog.kinaxis.com/2017/10/ready-fallout-proposed-us-trade-policy-changes-will-impact-end-end-supply-chain/

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