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21st Century Supply Chain

836 posts
by Bob Ferrari

supply chain transformation involves people, process, technology and informationThe following guest blog commentary is contributed by Bob Ferrari, Founder and Executive Editor of the Supply Chain Matters blog and Managing Director of the Ferrari Consulting and Research Group LLC.

 

We often context and plan supply chain transformation initiatives under the three-pronged perspectives of People, Process and Technology enablers. I would urge transformation teams to seriously consider a fourth component, that being Information, including the velocity, context and clarity of information. While some may be of the mistaken belief that the element of Information is solely the perspective of IT, it is rather a jointly-owned, cross-functional element of transformation.

 

Across various industry supply chains, a lot of executive level visionary thought and leadership energy is becoming focused on supply chain transformation efforts, namely moving the needle towards more agile or resilient supply chain response capabilities. The reasons are many and varied. Today’s clock speed of rapid and continuous business change requires that industry supply chains be more agile and able to anticipate changes in customer, product, or fulfillment segment needs, quicker than competitors. The complexity and sheer speed of events occurring across the global supply chain implies an exceptions-based focus, allowing advanced technology to monitor and oversee day-to-day customer focused fulfillment. Having a bold vision to the end-state capabilities required across the value-chain is essential. With the increasing demands of online and omni-channel customer fulfillment, the end-state is often defined as the supply chain being more predictive and exceptions-driven in terms of response.

 

Many of today’s industry supply chain and sales and operations planning (S&OP) teams however, find themselves drowning in too much data while lacking in important insights. Hence transformation efforts can start on the wrong footing.

 

The “Case-in-Point: Avaya’s Supply Chain Transformation” case study references the Value Pyramid, specifically the high value pyramid that inverts the paradigm of data and information to stress less time spent on low value and time-consuming data and information tasks and more time spent on higher value predictive and prescriptive analysis, capabilities and actions. As an example, less time and attention consumed in achieving forecast accuracy and more time allocated to sensing and predicting various demand patterns for products based on customer needs.

 

Achieving these transformative capabilities takes time and clear perspective, particularly the focus on information and planning competencies. Like the other components of transformation, the Information component requires cross-functional perspective not only including a close collaboration with IT support teams but a supply chain focus on the elements of analytics capabilities. Efforts include development and adherence to overall information architecture that umbrellas broader forms of information, both structured and unstructured in nature. It should include an outside-in information lens, with information streams tied to key business process streams. It implies not only accurate data, but data and information streams that feed higher levels of understanding as to why events are occurring and what events to anticipate.

 

Planning capabilities should be transformed from historic forecast-driven to more demand sensing and market intelligence driven, tying casual information data points into insights. As an example, consider how specific climatic weather patterns or events affect demand for products, either continuous or seasonal. What about demographics of a particular market tied to social media buying trends or customer responses to new products? Consider how related products have been trending and whether that has an effect on other specific products.

 

Information cannot solely be planning related, but needs to include broad elements of fulfillment execution. The implication is, of course, that rather than hierarchical planning and execution processes, the perspective turns to net-change continuous planning and execution capabilities supported by more advanced technology. Rather than the moniker of a “Big Data” approach, consider an emphasis on a smarter, more insightful data approach grounded in analytics- and insights-driven decision-making. These capabilities imply a singular streaming data and information model that feeds integrated business or sales and operations planning and decision-making needs over time.

 

In supply chain transformation, the element of Information adds to the dimensions related to People. Do not neglect the skills impact implied with the transformation to more predictive, prescriptive or insights-driven value-chain response. It is a different mindset, one that is grounded in analytical thinking, comfort with advanced technology and a deep knowledge of all of the various internal and externally focused processes that make-up the current or planned future value chain. Allow time for the organization to mature or nurture these skills in incremental crawl, walk and finally run segments of maturity.

 

Interested in learning more about supply chain transformation? You can view a live webcast on April 30 where Kinaxis will host a detailed discussion on the drivers for change at Avaya; the five-phase approach used to transform their supply chain organization; and how they combined people, process and technology to achieve far-reaching success.

The post Supply Chain Transformation — The Important Element of Information Strategy appeared first on The 21st Century Supply Chain.

 

Avaya's Supply Chain Transformation

 

Originally posted by Bob Ferrari at http://blog.kinaxis.com/2015/04/supply-chain-transformation-the-important-element-of-information-strategy/

by Melissa Clow

SupplyChainBrain attended our annual Kinexions user conference, and while there, they completed a number of video interviews with customers, analysts, and Kinaxis executives. And, we’d like to share them!

We know that companies are desperate for new talent to help them achieve supply-chain excellence, as they grapple with ever-larger volumes of data and increasing unpredictability in consumer markets. Companies have been investing in supply-chain technology for 20 years or more – yet many are still far from the goal of creating global, demand-driven networks. “Getting there takes more than a great tool,” says Green.

 

Check out this recorded roundtable discussion with Benji Green, director of global supply chain operations with Avaya; Trevor Miles, executive vice president of thought leadership with Kinaxis, and Roddy Martin, managing director of Accenture Supply Chain Strategies.

 

Watch now: Supply Chains of the Future: Where Will We Get the Talent?

 

Miles says a dearth of talent is frustrating efforts to achieve supply-chain “nirvana.” “We’ve got cars that can drive at incredible speeds, but not everybody can drive them,” he says. Fresh talent needs to be focused on collaboration and an understanding of end-to-end processes.

 

According to Martin, it’s important to understand the context in which people are using technology. “You can spend all this money on technology, yet still be battling with basic visibility. We have more data than ever before, yet we can’t see the inventory.”

 

Demand is more volatile than ever, Green notes. The growing level of unpredictability in global supply chains calls for greater human interaction, not just the installation of cutting-edge applications.

 

Managing data should be everyone’s responsibility, says Martin, not just that of discrete departments within the organization. Another problem is the fact that so much data is transactional in nature. With the coming of big data and new analytics applications, that data can become “directional,” serving as the basis for better decisions. Right now, however, “I don’t think businesses know where to put those data scientists,” Martin says.

 

That wealth of new data contains much uncertainty, says Miles. Those who use social networks are still a relatively small percentage of the population, even if the data they generate is directionally correct. Green says it’s vital that companies utilize the information to create “meaningful insight.”

 

Check out the other videos in this supply chain interview series:

 

The post Avaya & Accenture – Supply Chains of the Future: Where Will We Get the Talent? SupplyChainBrain & Kinaxis Video Series appeared first on The 21st Century Supply Chain.

 

Avaya's Supply Chain Transformation

 

Originally posted by Melissa Clow at http://blog.kinaxis.com/2015/04/avaya-accenture-supply-chains-of-the-future-where-will-we-get-the-talent-supplychainbrain-kinaxis-video-series/

by Agnes Rubaj

It’s that time of year when planning for Kinexions, our yearly user conference, kicks off in full swing. Locations are scoped out, agendas are developed, speakers are secured, and graphic designers are slaving away crafting captivating themes and logos.

 

This year, for the first time ever, we are bringing Kinexions to Las Vegas. There is a lot of excitement about the location and, unsurprisingly, it made for some fun logo designs. The Kinaxis marketing team recently met to review all the proposed logos and taglines. We had quite a few laughs and wanted to share all the fun ideas. Check out the following logos and transcripts of our reactions, take a stab at guessing the winner, and post your guess in the comments. We will be unveiling the final logo and additional conference details shortly, so stay tuned.

 

Let’s get started!

 

Kinexions Logo

 

“I think I like this one.”

 

“Did you notice how all the suits are represented in that?”

 

“Hey, that’s pretty clever!”

 

“Is it too busy though?”

 

Kinexions Logo

 

“Who knows poker, is that a straight flush?”

 

“It would be better if the cards were red.”

 

Kinexions Logo

 

“Look, red cards, they read my mind!”

 

“OK, so is that a full house?”

 

“Seriously, someone on this team take an action item to master poker.”

 

“Guys, I’m not sure about the Expect a Full House slogan though, doesn’t have much to do with supply chain.”

 

Kinexions Logo

 

“This might be difficult; this one is pretty good too.”

 

“We’d just need to change the gold to red.”

 

Kinexions Logo

 

“Hmmm….”

 

“I like the poker chip idea.”

 

“I don’t like the background.”

 

“It has a psychedelic feel to it, no?”

 

Kinexions Logo

 

“The chip again! And no grey!”

 

“This is getting tough, because I like this one too.”

 

“I prefer the shortened tagline.”

 

Kinexions Logo

 

“Collective gasp.”

 

“Whoa!”

 

“I think Paul’s just messing with us.”

 

“I have a great idea, let’s superimpose Bill Dubois’ face on Elvis’ body!”

 

 

 

That’s it, that’s all folks! Think you know which one we chose? Leave a comment with your thoughts for bragging rights.

 

 

The post Kinexions: What happens in Vegas… appeared first on The 21st Century Supply Chain.

 

Originally posted by Agnes Rubaj at http://blog.kinaxis.com/2015/04/kinexions-what-happens-in-vegas/

by Alexa Cheater

We’re delighted to be bringing you a great live discussion on successful supply chain transformation based on Avaya’s first-hand experience. Join us on Thursday, April 30 at 1pm EST (5pm UTC) for “Supply Chain Transformation: Avaya’s Journey.”

 

In this live webcast, Bryan Ball, Aberdeen Group and Benji Green, Avaya, will discuss the challenges that were impeding Avaya’s ability to achieve a best-in-class supply change and their key drivers for change. Learn about the five-phase approach Avaya used to shift focus from low-value, reactionary data management tasks to high-value, proactive activities, and how the combination of people, process and technology led to achieving far-reaching success.

 

Register now!

Speakers

 

Bryan Ball
VP and Group Director, Supply Chain and Operations
Aberdeen Group

 

Bryan BallBryan Ball is responsible for developing Aberdeen’s research coverage within the Supply Chain and Supplier Management research practice. With over 30 years of supply chain, operations and materials management experience acquired across multiple product lines and serving several markets, including retail, wholesale, commercial, OEM and private brand customers, Bryan brings a high level of knowledge and insight on the challenges and opportunities facing supply chain practitioners worldwide. He holds Bachelor’s and Master’s degrees in Industrial Engineering from Auburn University, and is an APICS Certified Fellow in Production and Inventory Management (CFPIM).

 

Benji Green

 

Director, Global Operations, Sales, Supply and Inventory Planning
Avaya

 

Benji GreenBenji Green has 14 years of supply chain and operations experience in high tech, multi-national companies. He earned his Bachelor’s Degree from the University of North Carolina and Master’s in Industrial Engineering from Georgia Tech. He has since worked for Accenture, IBM, Lenovo, and Avaya. CSCP certified in 2010, Benji has broad experience in demand, supply, inventory, and financial risk planning. He has implemented two demand planning IT platforms and designed the reorganization of planning teams through a divestiture from IBM, a merger with Nortel, and multiple outsourcing initiatives. He lives in Raleigh, NC with his wife and two children.

 

Looking for even more information on supply chain transformation? Check out the new Aberdeen Group case study on Avaya’s transformation here.

 

The post [Live Webcast] Supply Chain Transformation: Avaya’s Journey appeared first on The 21st Century Supply Chain.

 

Avaya's Supply Chain Transformation

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/04/live-webcast-supply-chain-transformation-avayas-journey/

by John Westerveld

A globe with highlighted routes representing supply chain performanceWhen things happen in supply chain, knowing sooner and acting faster can mean the difference between a major catastrophe and a minor hiccup in your supply chain performance. It can mean the difference between late orders and angry customers and the ability to win additional market share. It can mean the difference between getting fired and getting a promotion.

 

Imagine this scenario; you are a supply chain executive for a major U.S.-based electronics manufacturer. It’s a Sunday morning in May 2008. You’ve woken up and are reading the Sunday news. Suddenly you read something that makes you spill your coffee. There has been a major earthquake in Chengdu, China… where several of your key items are manufactured. This is bad…. very bad, but you know you have the tools to respond. By end of day Monday, you have identified the key items that are manufactured in that region, identified the customers and revenue impacted by the loss of those items, identified alternative sources, and were able to shift to new suppliers and reschedule orders. All with minimal impact to your customers.

 

Is this kind of performance too good to believe? Can you imagine your supply chain planning team being able to pull this off? Supply chain performance like this is not out of your grasp. It takes two things:

 

  1. Knowing sooner
  2. Acting Faster

Know Sooner

 

Knowing sooner means knowing both that an event has happened and the impact of that event. In the story described above, the event was announced in the news – you don’t need anything special to see that. However, what wasn’t immediately apparent was the impact of that event. What customer orders are impacted, what revenue is impacted, how does this impact your manufacturing plans.

 

In many cases, supply chain issues aren’t going to be found in the news. Most often they will be smaller, more localized issues that none the less can significantly impact your business. So, sometimes, knowing sooner means you can sense the event before it materially impacts your supply chain. The sooner you sense the event, the more time you have to react. Let’s say, for example, that a supplier has delayed the delivery of some components. Basic planning functionality allows you to report on late supplier delivery. However, knowing sooner means not just that the parts will be late, but instead the impact of this delay. What orders are impacted? If I can’t resolve the issue, what customers do I need to notify. Looking at just the notifications and not the impact means that you can soon be buried by the noise. Not every delay needs a response, only those that will impact your ability to deliver. The final piece to knowing sooner is to prioritize. In my experience, planners are dealing with hundreds sometimes thousands of exceptions – things that need to be addressed. The problem is figuring out which of these are more important than others. Prioritized action lists based on impact to your customers or whatever key metrics drive your business can ensure that planners are working on what matters.

 

Act Faster

 

Acting faster means once you are aware of an issue and you know that issue needs your attention, that you have the tools to formulate an effective response very quickly. The problem with traditional ERP systems is that they don’t allow fast response to any situation. They simply weren’t designed with that need in mind. To react quickly, you need a handful of basic capabilities:

 

  • You need fast analytics that allow you to try and discard multiple resolution options in seconds.
  • You need resources that allow you to quickly make good decisions based on solid data.
  • You need visibility that allows you to see beyond the factory’s four walls, but instead to the broader supply chain, including other sites, warehouses and if data is supplied, supplier and customer locations.
  • You need scenarios that allow you to try and compare multiple resolution options.
  • You need to collaborate with coworkers through sharing data and contextual information so they can instantly see and understand the issue you are trying to solve.

Acting faster doesn’t mean act randomly. Anyone can knee-jerk react to a situation. With traditional ERP systems that is often the only option and in many cases this causes more problems than it solves. If you have a system that provides the capabilities described above, you can respond with confidence knowing you have the right data and the right tools to analyze the problem to come up with the right answer.

 

What is your approach when you need to respond? Do you have different ideas about what is needed? Comment back and let us know!

 

 

The post Know sooner, act faster and accelerate your supply chain performance! appeared first on The 21st Century Supply Chain.

 

Avaya's Supply Chain Transformation

 

Originally posted by John Westerveld at http://blog.kinaxis.com/2015/04/know-sooner-act-faster-and-accelerate-your-supply-chain-performance/

by Alvaro Fernandez

A mailbox full of mailDid you know it costs approximately $100 to send an envelope from Ottawa, Ontario, Canada, to Caracas, Venezuela? That’s for three to five day service! New York to London? That will cost you $50 to $100, but it’ll get there overnight. Of course, we’re not only paying to get that envelope from point A to point B, but for a certain level of service as well. What if you don’t require the highest level of service, but still want to avoid the nightmares of dealing with national snail mail companies? (To be fair, Canada has had its share of mail nightmares in the past).

 

A popular subject in several expat Facebook groups is checking to see who’s planning on flying back to their origin country, and whether those individuals would mind taking along a little extra cargo. I’ve been part of a few of these groups. It usually starts with someone asking for it as a favor, but some, particularly if it’s something bigger than an envelope, offer to pitch in a few bucks to help cover the checked baggage fees. In a way, travelers are informally monetizing what we might call their unused capacity. Upon arrival, they’re usually met by the intended recipient at the airport, or occasionally will agree to meet at more central location, or even relay the package to a local courier to complete the shipment.

 

So, when I read about Roadie, a startup whose business model is about providing a platform to enable people to monetize their otherwise wasted capacity in the trunk of their cars, I had one of those “about time!” moments. Granted, it’s not the budget-friendly cross-border air shipping service I dream about for my occasional need to send documents overseas, but I hope it might pave the way for it.

 

I can think of several hurdles a service like this will need to overcome, but then I think about how we’ve come to an age where people seem to have little to no issues allowing strangers to stay in their homes, catch a ride with them, or even rent out their own vehicles, all for a fee. Then there are those who opt to work part-time for a car service. Roadie isn’t the first one to attempt such an idea. I found another, now defunct company, called Hitchpack.com, but hey, you don’t always have to be the first to succeed.

 

In a way, I see this as another chapter in the so called “shared economy” story, which I see as a technology-leveraged new way to outsource non-core activities. Think about it, this shared economy provides the user with access to cheap capacity (one that would otherwise be wasted), cheaper labor (as people involved usually only do it part-time), less regulatory burden, and greater flexibility. The user is offered all of these with little to no initial investment, on either equipment or training.

 

The downside, on the other hand, won’t be significantly different from the risks associated with the “usual” outsourcing: lack of managerial control, substandard quality/poor customer experience, bad publicity, hidden costs, etc. Yet from what I’ve seen in other “shared economy” trends, as the concept gets proven and matures, more serious participants start leveraging the tools and customer base. I’ve seen it in online auction sites. I’ve seen it in ride sharing sites where instead of riding with an occasional commuter, you get a guy with a van who is driving back and forth daily for a living.

 

In the end, this could very well end up bursting, but, nonetheless, I still find it exciting news, at least while we wait for the self-driven trucks.

 

What do you think of the “shared economy”? Are there ways it could benefit, or endanger, your supply chain?

The post Is the “shared economy” changing logistics? appeared first on The 21st Century Supply Chain.

 

Avaya's Supply Chain Transformation

 

Originally posted by Alvaro Fernandez at http://blog.kinaxis.com/2015/04/is-the-shared-economy-changing-logistics/

by Melissa Clow

SupplyChainBrain attended our annual Kinexions user conference, and while there, they completed a number of customer video interviews.

In this video, hear Alain Huillet, program director with Schneider Electric, relate his company’s journey toward achieving true end-to-end supply-chain visibility.

 

End-to-end visibility is key to the success of any supply chain today, and especially to Schneider Electric. Huillet says the company needs to be able to monitor product and data from the customer all the way back to the supplier.

 

Watch now: Schneider Electric: A Global Vision of Supply Chain Excellence

 

To make that possible, Schneider Electric is adding critical suppliers and working to integrate its supply chain. “The model is not completely deployed,” says Huillet, “but we have a very good pilot.”

 

Three years ago, with partner Kinaxis, the company kicked off an effort to integrate its sales and operations planning (S&OP) processes worldwide. It brought together sales, marketing, research and development, logistics and finance – all functions that previously operated in silos with minimal interaction.

 

Breaking down those silos is the heart of Schneider Electric’s supply-chain transformation effort. It allows forecasts to be shared across disciplines, leading to a consensus throughout the company in the critical area of demand planning.

 

Schneider Electric has been able to create multiple “what-if” scenarios to manage its assortment of 400,000 SKUs in 100 distribution centers and 250 plants. “It’s a big and complex supply chain,” says Huillet.

 

Check out the other videos in this supply chain interview series:

 

 

The post Schneider Electric: A Global Vision of Supply-Chain Excellence – SupplyChainBrain & Kinaxis Video Series appeared first on The 21st Century Supply Chain.

 

Avaya's Supply Chain Transformation

 

Originally posted by Melissa Clow at http://blog.kinaxis.com/2015/04/schneider-electric-a-global-vision-of-supply-chain-excellence-supplychainbrain-kinaxis-video-series/

by Alexa Cheater

Analog rabbit ears represent push strategies, streaming represents pull strategiesOur partner Celestica recently published the following article, ‘Staying Ahead of Today’s On-Demand Market: Push Versus Pull Strategies.’ The author, Robert Rejano, Processes and Applications Advisor, Celestia, discusses the key differences between push and pull strategies and their impact on the supply chain.

Rejano asks ‘So why does technology even matter when supply chain principles haven’t really changed in decades?” We explore the answer.

You can start the show… whenever you’re ready

 

Using an interesting analogy centered on the rapidly changing television industry, Rejano suggests push strategies are akin to old analog rabbit ears – you can watch the programs you’re interested in, but only when the network decides to air them. Pull strategies are more like today’s on-demand options. Think digital video recording (DVR) and online streaming. They allow you to choose what you want to watch, and when you want to watch it.

 

Bullwhip Effect

 

When it comes to supply chain strategy, push strategies enable planned material delivery so production can meet a specified demand within a defined schedule. Planning is optimized to cascade independent demand down to the dependent levels through MRP. That demand is then handed off to the next supplier and so on and so forth. Each node’s MRP is optimized independently, which is known as single-stage optimization.

 

Push strategies work when demand is predictable, but there are challenges when forecast accuracy is poor, whether due to the customer’s ever-changing mind or a failure in your own S&OP. This can lead to what is known as the bullwhip effect. As customer demand is conserved at the node that made contact with the end user, that node will tone up or down the demand the OEM plans based on historical experience. When the next supply node performs the same demand adjustment, the resulting modified demand is amplified.

 

Multi-Echelon Supply Chain

 

A multi-echelon supply chain is defined as a network of multiple tiers of supply nodes. Demand flows upstream from the end user through to the last supplier and supply flows downstream from the last supplier through to the end user.

 

Some of the risks inherent in this strategy are poor cash flow performance, holding costs, lost capacity due to production of undesired product, and poor on-time-delivery to request (OTD-R) performance.

 

Push Model

 

  • Production approximation based on anticipated demand
  • Slower reaction to demand change
  • Higher inventory
  • Waste
  • Inventory management through firefighting
  • OTD-R across all products low

The alternative to the push model is the “pull” model

 

Advanced optimization tools have opened the door for pull strategies to excel in today’s fast-paced business environment. A pull-driven supply chain uses a series of pull signals to trigger replenishment of stock, starting from the customer order pull and cascading from there. Each node has a calculated reorder point (ROP). The bullwhip effect seen in push models is mitigated by the fact buffers are optimized as a total system, so small demand does not become amplified.

 

One of the challenges of pull strategies is companies have invested heavily in their ERP systems, which don’t handle ROP well without customization. Another challenge is the requirement for subject matter experts to fully optimize the system.

 

Single-Use Kaban

 

In consumption-based pull strategies, there are instances when a ROP is sized to exclude certain spikes. The single-use Kaban (SUK) allows replenishment beyond normal levels for a specified defined period. It can also be used for infrequently ordered or special-order items.

 

Pull Model

 

  • Production precision based on actual consumption
  • Agile enough to keep up with changing demand
  • Lower overall inventory
  • Waste reduction
  • Inventory management through visual/systematic process
  • On-time-delivery to request across all products high

Key Factors of Success

 

Ultimately you need to make a decision on your replenishment strategy based on the maturity of your supply chain. Regardless of pull or push, there are key factors that allow the system to be successful.

 

  • Identify root cause of forecast accuracy issues – at the root of many inventory and OTD-R issues is inaccurate forecasting. A systematic, data-driven process for monitoring and improving performance is paramount.
  • Plan for every part – through proper segmentation, every item, from customer-facing product down to sub-assembly and component should have a supply strategy that drives to the right level of exception management.
  • Manage exceptions – processes need to be enabled that allow the supply chain team to plan the majority of the items with minimal intervention, allowing for strict focus on super A-class items, critical components and unplanned shortages.
  • Enable an agile supply chain – depending on the length of the S&OP cycle and the amount of time it takes to propagate demand from customer-facing nodes down to lower-tier suppliers, decisions made today may take weeks before they are realized at the lower levels of the supply network. Eliminating this lag enables a true demand-driven supply chain while optimizing inventory levels.

In an environment where delivery and inventory are key indicators of success, having the ability to optimize the entire supply chain based on defined service levels and acceptable cost of inventory, plan top down and bottom up, see the possible risks, and make quantitative and qualitative decisions based on those risks, is key. That’s why it isn’t difficult to see why the use of pull strategies is on the rise.

 

You can view the whitepaper in its entirety on the Supply Chain Expert Community.

 

Looking for more great information from Celestica? Check out these other blogs in our series:

 

 

The post Push vs. Pull Strategies: Dealing with the On-Demand Market appeared first on The 21st Century Supply Chain.

 

Avaya's Supply Chain Transformation

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/04/push-vs-pull-strategies-dealing-with-the-on-demand-market/

by Meranda Powers

A butterfly emerging from a cocoon representing supply chain transformationChange, even under the most ideal circumstances, is difficult. Think about how hard it is (or was!) to stick to that New Year’s resolution you made to eat better, get to the gym more often or find a better work/life balance. It seems like the daily grind always gets in the way, distracting us from our best intentions. (That’s always been my experience any way. So much so, that I gave up on even making New Year’s resolutions a long time ago!)

 

Now imagine you’re a $4B a year revenue company with 13,000 employees and over 15 corporate acquisitions since 2001. This was Avaya’s reality around 2010. Change in that scenario could seem almost impossible. But they managed to not just change, but actually transform their supply chain organization in just four years. How they managed to do that is what resonated with me the most when I read this new case study released by Aberdeen Group.

 

Now, I will admit, change and I don’t have the best track record. I’d say that at least 2-3 times per week, I have a ‘change-the-world’ (or at least ‘change-my-world’) idea. But I never seem to be able to turn that into reality. The idea always seems too large, too overwhelming to achieve. But after hearing Avaya’s story, I realized I’ve been going about it all wrong.

 

So how did Avaya change their world? They started with a lofty vision. They knew they were spending too much time on low-value, reactionary activities. A recent acquisition of Nortel’s Enterprise Solutions had them running multiple ERP systems with disparate processes and a lack of visibility across their enterprise. This meant a lot of resources were going into gathering, sorting and translating data, leaving little time to garner any intelligence or make any change or improvements for the business. A lot of supply chain organizations find themselves in this type of situation.

 

The executive team at Avaya wanted to turn that current reality on its head. With the goal of exceeding customer and employee expectations, they set out to create a high-value supply chain organization where technology would take care of managing and translating data, so people could focus on analyzing outputs and taking actions that would make a real impact on the business.

 

To achieve this vision, they mapped out a five phase approach. Every phase of their long-term plan wasn’t perfectly defined before they started but they had a clear understanding of what success would like look when they achieved it. They started by tackling their visibility issues first, consolidating their multiple ERPs into a single supply chain planning system which gave them a unified view across their multi-tier supply chain. Avaya chose to use Kinaxis RapidResponse as the technology enabler for their transformation. (According to Aberdeen Group, “69% of the Best-in-Class map their ERP/MRP planning systems into a single supply chain planning system.”)

 

From there, they standardized many of their processes, worked to reduce a lot of reactionary activities and then began putting more focus on proactive activities like what-if analysis and modeling.

 

Their vision to move from a low-value, reactionary supply chain organization to one focused on high-value activities achieved significant results. It not only impacted key operational metrics (like reducing gross inventory levels, improving inventory turns and reducing cash-to-carry cycles) but also had a huge impact on corporate culture. The move away from ‘mundane data activities’ opened the doors for employees to focus on improving business processes and defining new, better ways of doing things – which is a lot more fulfilling.

 

Avaya’s journey shows that significant change is possible. It’s not easy, and I’m sure they hit many bumps in the road. But by defining what they wanted to achieve and identifying the milestones along the way, they were able to meet their goals over a four-year period.

 

Avaya’s supply chain transformation is covered in a lot more detail in the Aberdeen case study I mentioned earlier.

 

You may also be interested in attending a live webcast on April 30 where Bryan Ball (VP and Group Director, Supply Chain and Operations Practices at Aberdeen Group) and Benji Green (Director of Global Sales, Operations, Supply, and Inventory Planning at Avaya) will have a detailed discussion on the drivers for change at Avaya; the five-phase approach used to transform their supply chain organization; and how they combined people, process and technology to achieve the far-reaching success I’ve touched on here.

 

 

 

 

 

 

 

 

The post The Rewards of Supply Chain Transformation: Avaya’s Journey appeared first on The 21st Century Supply Chain.

 

Avaya's Supply Chain Transformation

 

Originally posted by Meranda Powers at http://blog.kinaxis.com/2015/04/the-rewards-of-supply-chain-transformation-avayas-journey/

by Melissa Clow

SupplyChainBrain attended our annual Kinexions user conference, and while there, they completed a number of customer video interviews.

In this interview, hear how fundamental shifts in supply chain management have significantly altered the planning paradigm. JP Swanson, global supply chain analyst with Dow AgroSciences, talks about how his company has adapted to the change, and improved planning across multiple levels of its supply network.

The need for agility was the driving force behind a change in the supply chain planning paradigm at Dow AgroSciences. “It’s a big challenge being able to react,” says Swanson, “having enough inventory close to the customer and getting it to him within 48 hours.”

 

One of the company’s major concerns is dealing with the silos of information that exist within its complex supply chain. Dow AgroSciences has transitioned from multiple instances of an SAP enterprise resource planning system to an integrated application and one dataset.

 

In implementing the RapidResponse application from Kinaxis, Dow AgroSciences sought to get all of its data into one place. As a result, it’s able to identify capacity gaps over the next five years. “It gave us time to react – to weigh cost against potential lost revenue,” Swanson says.

 

Watch now: Too Much Information? Not a Problem for Dow AgroSciences

 

Play the video on youtube.com
https://i1.ytimg.com/vi/c-GtbsUmSEg/sddefault.jpg

 

Check out the other videos in this supply chain interview series:

 

 

The post Too Much Information? Not a Problem for Dow AgroSciences – SupplyChainBrain & Kinaxis Video Series appeared first on The 21st Century Supply Chain.

 

Avaya's Supply Chain Transformation

 

Originally posted by Melissa Clow at http://blog.kinaxis.com/2015/03/too-much-information-not-a-problem-for-dow-agrosciences-supplychainbrain-kinaxis-video-series/

by Alexa Cheater

Caution Supply Chain NewbieQuick, tell me everything you know about supply chain! Okay, maybe not everything you know. I’m pretty sure that would take years with the experience some of you have. Maybe more like the CliffsNotes version. Why? Well, I’m new to the supply chain industry and need to get up to speed in a hurry. I’ve just joined the Kinaxis team as the social media and public relations manager, filling in for the next 14 months, and while I’ve got a great handle on the functions of my role, doing it in the supply chain context is something entirely new for me.

 

I have to admit that up until recently (pretty much the day before my first interview) I hadn’t really given much thought to supply chains. Sure, I had a basic idea of what they were. Oxford Dictionaries defines a supply chain as “the sequence of processes involved in the production and distribution of a commodity,” but as I’ve quickly come to realize, that short little sentence doesn’t begin to scratch the surface of the vast and oftentimes perplexing concepts that encompass supply chain management.

 

The past few weeks I’ve been studying up on supply chain. Here are just a few things I’ve learned so far:

 

  • A control tower isn’t just the thing at the airport that directs the planes. Having a centralized hub to capture, analyze and use supply chain data can make a huge difference in enhancing visibility for decision making.
  • Holy acronyms Batman! ERP, S&OP, MPS – there’s one for EVERYTHING and it seems to be assumed everyone knows what they all mean. Thank goodness for Google!
  • Forecasting is a lot like trying to predict the weather. You have a general idea of what things will look like based on past trends, but then Mother Nature decides to throw a massive wrench (or snowstorm!) into the mix and everything changes. Hopefully your current system allows you to respond quickly!
  • Inventory planning is the reason why those items I ordered from Amazon arrived (well that and the mail carrier). And poor inventory planning is why they were three weeks late! Supply chains impact nearly every aspect of my life – and I didn’t even know it! It really hammers home the message that proper supply chain management can have a huge effect on ensuring your business runs smoothly, and that your customers remain happy.
  • Supply chain management is actually pretty fascinating! But you probably already knew that. There are so many nuances and intricacies, and the impact of doing a good job in supply chain management (or a poor one) can have a far reaching effect. What’s not to get excited about?

I know there’s so much more to learn, but thankfully I’m surrounded by some incredibly knowledgeable (and friendly) people who are happy to strike up a conversation about supply chains. I even learned a little more about the importance of supply chain collaboration at the water cooler today!

 

Did you struggle when you first entered the world of supply chains? Let me know what helped you. Tips, tricks, good reads – besides this blog and Kinaxis material of course – I’m all over that – we have some great stuff if I do say so myself! :-) Give me your suggestions in the comments section below!

The post Help a Supply Chain Newbie Out appeared first on The 21st Century Supply Chain.

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/03/help-a-supply-chain-newbie-out/

 

Avaya's Supply Chain Transformation

by Alexa Cheater

A man reviewing inventory performance on a computerOur partner Celestica recently published the following article, Is your company being held hostage by poor inventory performance? The authors, Anandhi Narayanan, Senior Manager, Advanced Customer Solutions, Charles Thomas, Director, IT Customer Solutions, Stacey Greene, Director of Inventory Optimization and Robert Rejano, Processes and Applications Advisor, all with Celestica, describe the critical steps needed to drive inventory performance improvements.

Poor inventory performance can create a significant obstacle to growth and profitability. But adopting a strategic methodology designed specifically for inventory transformation can help eliminate the obstacles caused by poor supply chain visibility and open up new opportunities. If you’re looking to increase your inventory performance, we’ve outlined Celestica’s key suggestions and how they helped one company see substantial results.

 

Establish an executive focus and a transformation team to support it

 

Like any ‘transformational’ initiative, the process of improving inventory performance begins with understanding the compelling reasons for change. Once urgency is established, building the guiding team, establishing a vision and outlining goals are critical to winning over key stakeholders.

 

Make it Visible – You can’t improve it if you can’t measure it

 

Successfully increasing your inventory performance requires integration of data from all sources that make up your supply chain network. It’s critical to create a framework for the data that translates it into one clear body of information. Once this happens, data can then be analyzed in detail. To move from ‘basic analytics’, which gives insight into how the supply chain has operated in the past and what is required for the present and future, to ‘advanced analytics’, requires data to be contextualized in a way that makes it useful at the time when operators need to make a decision.

 

Flexible data models and methods to extract and load data are essential. The key to achieving meaningful results is a centralized data hub where normalization, standardization and storing of data can be performed. This allows the team to quickly develop and modify data models, without relying on multiple outside parties.

 

Identifying Opportunities

 

Visibility allows you to see precisely how much inventory you have and where. By mapping out the current state and then gathering data to further build an understanding of the inventory, you can take a system-level view of the processes to establish inputs and outputs. This reveals how to best segment data to analyze ‘How Many? How Often? And Where?’ It then becomes possible to understand ‘why’ and to prioritize value-added activities.

 

In order to dig deeper into inventory performance, further analysis using more granular data or new data needs to be done. Organize data in a way that is actionable and disseminate it to specific teams that can influence the result. Contextualizing here becomes critical to driving actions and outcomes, while keeping overhead minimal.

 

Process and Controls

 

In a typical outsourced manufacturing supply chain, teams look first at variations between their customer forecast and the executed forecast. Establishing the right controls over investment inventory is critical. It’s also paramount each functional team is aware and responsible for their part in inventory creation, and that they understand how their efforts impact the company’s overall inventory performance.

 

Optimization

 

Once inventory-control initiatives are in place, the focus needs to shift to optimization in order to increase inventory performance. This requires providing targeted analytical capabilities at the time decisions are made. Optimization for growth means managing diverse elements of the supply chain differently. Some areas to consider include:

 

  • Differences in demand patterns and order management models between partners along the supply chain. This will require a tailored focus on balancing the cost-to-serve, customer service level and inventory reduction targets.
  • Driving improved management of A-class parts through the development of applications that optimize levers of minimum order quantity (MOQ), lead time and part value. This will help identify areas for improvement.
  • Enabling supplier collaboration platforms so operations teams can manage by exception – focusing on those parts and suppliers that have the highest impact on delivery while seeing the immediate responses to transaction status.
  • Investing in multi-echelon inventory optimization (MEIO) to take the guesswork out of buffer management in the planning process. MEIO uses analytical models to define optimal levels of inventory buffers at each node in the supply chain in order to achieve service level targets.

Measuring the Success of a Journey

 

Measuring progress along the way is critical to understanding whether current efforts are bringing about desired outcomes. It’s also an endless process. Success demands widening the scope. Pull in and analyze more data, and continuously restart the process of identifying areas for optimization.

 

Ultimately an organization’s inventory performance will have a significant impact on its competitiveness and growth. As outlined in their case study, Celestica was able to improve inventory performance for one company by identifying the root issues and monitoring key levers through data analytics and visibility. The company went from lagging behind to leading among its peers and was recognized formally for its IT and supply chain management leadership.

 

You can view the whitepaper, including the full case study, in its entirety on the Supply Chain Expert Community.

 

Looking for more great information from Celestica? Check out these other blogs in our series:

 

 

 

 

 

The post Is Poor Inventory Performance Holding You Back? appeared first on The 21st Century Supply Chain.

 

Supply Chain Leaders' Perspectives: Adapting to change, planning for the future and supply chain transformation

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/03/is-poor-inventory-performance-holding-you-back/

by Melissa Clow

SupplyChainBrain attended our annual Kinexions user conference, and while there, they completed a number of video interviews with customers, analysts, and Kinaxis executives. And, we’d like to share them!

In the age of the Internet of Things, how can companies extract meaningful insights from the mass of data that is available to them today? We get answers from Yogesh Amraotkar of the Innovation and Solutions Group of Cognizant.

 

Watch now: Mining Critical Data in the Era of the Internet of Things

 

There’s a paradigm shift occurring today in the world of supply-chain planning and execution, says Amraotkar. Companies are looking to integrate those functions, supported by rapid development of the Internet of Things. New data sources are becoming available to them, creating processes that are “flexible, not frozen.”

 

The biggest struggle for Cognizant clients today is identifying risk within their global supply chains. They know how to look at suppliers and conduct financial analyses. For the most part, however, their efforts are confined to strategic planning. Unexpected events on the operational side are much tougher to access and react to.

 

Just understanding all of the things that can go wrong can be an enormous challenge, Amraotkar says. Most companies today are dealing with production and sales in multiple parts of the world, and drawing on a huge collection of handlers and transportation modes for support. The potential for something going wrong is high.

 

Again, the Internet of Things can help – using technology to know sooner and act faster. It allows companies to get a better sense of the risk within their supply chains, and identify the key factors before events occur. Not every disaster or glitch can be foreseen, of course, but better access to data is allowing companies to mitigate the impact of many types of disruptions.

 

Check out the other videos in this supply chain interview series:

The post Cognizant – Mining Critical Data in the Era of the Internet of Things – SupplyChainBrain & Kinaxis Video Series appeared first on The 21st Century Supply Chain.

 

Originally posted by Melissa Clow at http://blog.kinaxis.com/2015/03/cognizant-mining-critical-data-in-the-era-of-the-internet-of-things-supplychainbrain-kinaxis-video-series/

by Alexa Cheater

forecast accuracy represented by a dart boardOur partner Celestica recently published the following article,Are you keeping your demand management process honest? The author, Eric C. Lange, Director of Demand Planning and S&OP Services at Celestica, examines forecast accuracy and the main components of a demand management measurement tool and process. We’ve outlined his recommendations below so you can help improve your forecast accuracy, leading to improved business operations and ultimately greater success.

Reporting Forecast Accuracy

 

Even with an established Sales and Operations Planning (S&OP) process, if you’re neglecting forecast accuracy measurement and reporting you’re missing a critical piece of the puzzle for demand management success. Yes, it’s often a difficult, time-consuming and complex endeavor, but not doing it limits the prospects for success for the entire process.

 

While calculating forecast accuracy is important, it’s not enough. You also need measurement and accuracy reports to determine the effectiveness of the entire demand management process.

 

There are three main components of a demand management measurement tool and process:

 

  • Decide the method to calculate forecast accuracy
  • Determine how to calculate and eliminate any forecast bias in the process
  • Manage all necessary data to evaluate the effectiveness of the demand management process

Once these components are in place, it’s time to move on to determining added value in the forecast.

 

Forecast Accuracy

 

Forecast accuracy should be used to determine effectiveness, not to punish demand planners. You should be considering input and participation by sales, marketing, finance, senior management and statistical inputs.

 

There should be several inputs and assumptions that lead to the agreed upon and executed forecast. The entire process should be measured to determine which assumptions are more accurate, focusing on the process that led to the final demand plan, and ultimately to the source of the errors.

 

Manually creating this type of analysis is typically time-consuming, so use a dynamic, user-defined drill-down type tool. Recent research shows a 3% increase in forecast accuracy yields a 2% increase in profit margins [AMR Research, 2008].

 

Bias

 

Forecasting may prove to be the single most difficult issue your company faces. Millions have been spent attempting to improve forecast accuracy over the last few decades, but inaccuracies and bias still remain.

 

Forecast bias is when the forecast is consistently higher or lower than actual demand. It’s usually introduced into the demand planning process by humans. Analysts or sales reps may forecast low if they’re incentivized for overachieving a sales forecast. If management expects unrealistic forecasts that are higher than the sales plan, the forecasts will typically be higher than actuals.

 

While it does take time to identify a bias, trends will eventually emerge and must be managed out of the demand planning process. There are several ways to calculate, report, manage and even eliminate bias, but again, it can be a very time consuming process. Having an analytical tool to capture and report bias quickly is another critical component. If it is determined that bias exists in a forecast, you can try to manage it out by working more closely with the analysts or sales reps, or use an automated reporting tool to determine forecast accuracy and bias, and to help determine and shape future forecasts.

 

Data Management

 

In order to calculate forecast accuracy and bias, historical data needs to be captured and archived. Having an automated process to do this for you could prove critical for the success of the demand planning process. You’ll also need a tool that can be customized to allow for multiple versions, offers multi-option filtering and the investigation of what-if scenarios.

 

The flexibility of these categories and this type of reporting is great for customized reports, giving consistency for the sales force, or for the demand planning team, so they can measure and monitor improvement. Regularly published, standardized reports should also be able to be auto-distributed to those who have a stake in the improvement of their forecasts. Some examples of custom categories include:

 

  • Customer/Location
  • Product
  • Forecast Comparison
  • Bias Range
  • Measure
  • Date Range
  • Lag Periods
  • Time Fence to Review
  • Error Range or Buckets
  • Segmentation
  • Product Life Cycle
  • Monthly Actual Carry-over Allowance

Value-Added Forecasting

 

One method to ensure your demand planning process is adding value is to measure the naïve forecast (also known as the simple rolling average) and compare it with the statistical model’s results and the analyst’s manual override to determine if the latter two add value. Having a tool to show comparisons quickly is effective for determining where the forecast information should be coming from. Sometimes, the more complex statistical models or the human element do not add value and need to be limited and/or removed.

 

What gets measured gets done

 

Forecast accuracy has to be measured where it’s meaningful. Was your business impacted because of an error at the item, category, or brand level? Does the location of the error matter in the big picture? Does it matter if you are accurate by week or month?

 

Without exception, the key performance indicators should be sales forecast accuracy AND forecast bias. Having the ability to deep-dive into the error and quickly uncover bias is where real improvement and forecast accuracy can be impacted and improved.

 

Once you eliminate forecast errors, your business can embrace the demand planning process and use it to drive business operations and success.

 

You can view the whitepaper in its entirety on the Supply Chain Expert Community.

 

Looking for more great information from Celestica? Check out these other blogs in our series:

 

 

 

 

 

The post Forecast Accuracy: Keep Your Demand Management Process Honest appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/03/forecast-accuracy-keep-your-demand-management-process-honest/

by Melissa Clow

SupplyChainBrain attended our annual Kinexions user conference, and while there, they completed a number of video interviews with customers, analysts, and Kinaxis executives. And, we’d like to share them!

It’s been about a decade since companies began talking about the dream of a truly “demand-driven” supply chain. How far have we come? It’s been 10 years since companies began striving to create “demand-driven” supply chains. Today, companies are “realizing that perhaps it’s not quite as short a journey as we thought it would be,” says Roddy Martin, managing director of Accenture Supply Chain Strategies.

 

Progress has been made, however, especially among consumer-driven retailers and even some large industrial manufacturers. “We’re way down the road,” says Martin, whose comments came at the annual Kinaxis user conference.

 

Why has the journey been so difficult? One reason lies in companies’ heavy investment in traditional enterprise resource planning and demand-planning infrastructure, says Martin. That has led to an “inside-out” focus with businesses. But the volatility of demand, coupled with growing risk in global supply chains, has shown that this approach won’t give companies the agility they’re seeking. What they need to be pursuing is the ability to conduct demand sensing and shaping within their supply chains, made possible by complete visibility of inventory at all points.

 

Watch now: 10 Years After: How Close Are We to True Demand-Driven Supply Chains?

 

Play the video on youtube.com

 

“If we’re at the wrong place at the wrong time [with product], we end up with waste,” says Martin.

 

The push for demand-driven supply chains has to come from the top. The common characteristic of best-in-class companies is that they are “leadership driven,” says Martin. Making the transition from manufacturing push to demand pull is no small step. It requires executive commitment to a multi-year journey.

 

Even as companies strive to reach the demand-driven goal, it tends to recede, as markets become even more unpredictable and levels of risk rise. Still, there are a number of new tools that can help. Chief among them is the cloud-based control tower. “It’s an exciting opportunity to really flip the switch – to start integrating people, process and technology,” says Martin.

 

Companies need to understand that a demand-driven approach isn’t limited to their own four walls. “The beauty of the whole theory of the control tower is that it’s inside and outside the walls of the organization,” Martin says. “It allows us to connect to structured and unstructured data, and it’s process oriented. It’s not just about the technology.”

 

Check out the other videos in this supply chain interview series:

The post Accenture – 10 Years After: How Close Are We to True Demand-Driven Supply Chains? SupplyChainBrain & Kinaxis Video Series appeared first on The 21st Century Supply Chain.

 

Originally posted by Melissa Clow at http://blog.kinaxis.com/2015/03/accenture-10-years-after-how-close-are-we-to-true-demand-driven-supply-chains-supplychainbrain-kinaxis-video-series/

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