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21st Century Supply Chain

826 posts
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/

by Andrew Dunbar

A snowed in car represents challenges weather can create for supply chainsThe first day of spring is less than a week away but the Canadian winter is still wreaking havoc on local supply chains.

 

A friend of mine wrote off his beloved Mazda 3 last month after being rear-ended on a snowy country road outside of Ottawa. This unfortunate event kick-started an urgent need for a replacement vehicle that would fit his growing family and replace the car he’d loved for longer than he’d even known his three children. His wife, demonstrating both her love and a generous dose of pity for her grief-stricken husband, agreed to let him upgrade to a brand new Audi Q3. “Don’t worry my friend, the car of your dreams will be here soon. It’s already on a ship to Halifax!” assured the sales rep.

 

Now five weeks late, my friend’s wife is still driving him to work and her pity has all but evaporated. What went wrong you ask? It’s hard to believe, but the ‘car of his dreams’ is currently frozen to the ground at CN Rail’s Eastern Passage Autoport.

 

While it would be convenient to blame this on Nova Scotia’s unforgiving winter weather, the root cause of this delay is really a supply chain planning issue. Borrowing a quote from CBC:

 

“If we can move the cargo out of Halifax in a timely manner, we don’t get into this situation. Those cars don’t get frozen in,” said Kevin Piper with the Halifax Longshoremen’s Association Local 269.

 

The unexpected delays caused by the immovable cars has thrown a wrench into the standard flow at CN, who has stated it could take up to three weeks for them to clear this unpredicted backlog. To top it off, Nova Scotia got another storm this weekend. I’m sure glad I’m not the one paying that bill!

 

Improving the flow through the Autoport is a complex problem, and the unpredictable nature of the business requires rapid response to constantly changing inputs. Though complex, it’s not that different in nature than the basic supply chain problems we face in other industries on a daily basis. To successfully plan the flow through the Autoport you need visibility of inbound cargo, visibility of transportation assets (ships, dock, trains), and a strong model of constraints, including infrastructure capacity, engine availability, and manpower. An efficient plan can be modeled given all the known parameters (much the same way an MRP system plans manufacturing), but there will always be unpredicted challenges that require rapid adjustments to the plan. Any time spent simulating a new plan is potentially time not spent moving cargo.

 

This is an extreme example of how minor inefficiencies in your supply chain plan (in this case, inventory waiting outdoors for just a few days) can snowball into much larger problems.

 

With that in mind, are you prepared to respond to the risk in your supply chain? I’d love to hear more stories similar to this one! Please share in the comments below.

 

 

The post Do your supply chain challenges have you feeling a little snowed under? appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Andrew Dunbar at http://blog.kinaxis.com/2015/03/do-your-supply-chain-challenges-have-you-feeling-a-little-snowed-under/

by John Westerveld

Two men discuss S&OPI came across this blog on sales and operations planning (S&OP) from the Institute of Business Forecasting and Planning (IBF) the other day. The article, S&OP and Culture Change: How to Stay the Course, written by Kathleen Winter, describes how corporate culture can derail an otherwise successful S&OP implementation.

 

Interestingly, it also describes the warning signs to look for if your S&OP process has fallen off the tracks. I suggest reviewing the blog to get a more detailed explanation of the warning signs, and what you can do to counter each, but I’ll summarize things here.

 

S&OP Warning Signs

 

  1. Meetings are occurring outside of the S&OP process and alternative supply and demand plans are being discussed.
  2. People are trying to eliminate relevant data, shorten meetings (or get rid of them altogether!) and find shortcuts to achieving solutions. S&OP participants are complaining there isn’t enough time to plan.
  3.  There’s a lack of accountability, with meetings ending without ownership for actions or results. Winter describes scenarios where the forecast is far above the outcome, the productivity is far below plan, and customer service levels far below expectations.

These are all clear signs that corporate culture is impacting your S&OP implementation, but let’s not stop there. Here are some additional indications your S&OP process may be in serious trouble:

 

Leadership not in attendance – The S&OP meeting is primarily about setting the course for the company, but if key executives are missing, it could spell trouble down the line when those same executives review the decisions and decide to overturn them. Almost as bad are meetings where the leadership group’s representative doesn’t actually have the authority to make necessary decisions, meaning organization-wide buy-in can’t be achieved.

 

Data isn’t believed – There are a number of ways this can happen. In situations where Excel is used to model the S&OP planning process, there can be errors in the workbook, errors in the data extract and data import errors. I’ve also seen situations where different groups involved in the S&OP process each bring their own versions of the Excel workbook. Each is modified slightly, providing different results, when they should be uniform. A couple of meetings like that and it won’t be long until users have no faith in the data used to run the business.

 

Plan performance isn’t monitored – A plan is useless if it gets created then ignored. The best way to ensure a plan is followed is to track performance and let everyone know the plan is being monitored. While looking at performance plans as part of initial S&OP meetings is good and should be done, evaluating performance mid-cycle is critical. By monitoring performance mid-cycle, you can catch issues earlier, creating a better chance of resolving the issue before it becomes a crisis that impacts your bottom line.

 

So, do any of these S&OP warning signs look familiar? Do you have suggestions on how to counter these issues? Comment back and let us know!

 

 

The post Sales and Operations Planning (S&OP) – How to Stay the Course appeared first on The 21st Century Supply Chain.

 

 

Originally posted by John Westerveld at http://blog.kinaxis.com/2015/03/sales-and-operations-planning-sop-how-to-stay-the-course/

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!

Sagar Nadgouda, service logistics manager with Nimble Storage Inc., offers his view on how far companies have come in crafting supply chains that are truly transparent and demand-driven.

 

One top challenge that companies are facing today is the need to innovate the customer experience, with the help of new information technology, says Nadgouda. A second is the requirement for flexibility in responding to actual demand patterns, with the goal of “making our supply chains more predictive and proactive, instead of reactive.”

 

Watch now: End-to-End Supply Chain Visibility: Dream or Reality?

 

On the consumer side, more and more options are becoming available, mandating that providers become more creative in order to keep and grow market share. The question for supply-chain operations personnel: “How do you prepare your supply chain for the next big curve that customers are expecting around technology and logistics?”

 

Companies continue to strive for the Holy Grail of end-to-end supply-chain visibility. The key lies in one’s ability to acquire and integrate the necessary data. “I would start with integrating the data in all of the business applications that allow us to scale in future,” says Nadgouda. Many companies fail in their journey toward a demand-driven supply chain because they skip this step, he says. Efforts to create demand-driven networks remain underdeveloped, although the potential is high.

 

Yet another key step is integration with the customer, says Nadgouda. A mature sales and operations planning (S&OP) effort can be of great help in reaching that goal. Working with Kinaxis, Nimble Storage is close to achieving a simplified S&OP structure that extends across all regions. Nadgouda says it’s important to view the discipline not as a technology play, but as a collaborative process, with the goals of all partners closely aligned. “One framework is scalable and achievable,” he says.

 

Companies must ask whether they have enough visibility into their customers’ environments. Looking upstream, they must also be able to pass customer requirements on to suppliers, through effective mechanisms for communication. Technology can help, in the form of systems for forecasting and planning, customer relationship management and enterprise resource planning.

 

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

 

The post Nimble Storage Inc. – End-to-End Supply Chain Visibility: Dream or Reality? SupplyChainBrain & Kinaxis Video Series appeared first on The 21st Century Supply Chain.

 

Originally posted by Melissa Clow at http://blog.kinaxis.com/2015/03/nimble-storage-inc-end-to-end-supply-chain-visibility-dream-or-reality-supplychainbrain-kinaxis-video-series/

by John Westerveld

A master scheduler plans out numerous shipping routes on a map we determined that the Master Scheduler has a challenging job with Master Scheduling, but you may be thinking that ERP system you’ve spent millions on buying and implementing must make the Master Scheduler’s job so simple it’s as easy as pushing a button, right?

 

Well… not so fast. Traditional ERP systems are notoriously difficult to customize. If you want to perform your MPS process the exact way your ERP vendor has designed their ERP module, you might be OK. But if everyone does their process the exact same way, where is your competitive advantage? The reality is that every company has unique requirements and no one implementation can meet those needs without some customization. And ERP customization is expensive. Very expensive.

 

Typical ERP systems don’t allow you to simply try something out before committing it to production. The ERP idea of simulation is copying the database to another machine and running it there… several hours later you might be able to do some scenarios. Even if you could try something out, you don’t know the impact of what you’ve tried until you’ve explored that change all the way through your supply chain. If the change you are thinking of making will cause an overload on a constraint that is defined on another ERP instance at a different site, you won’t know there is a problem until you start executing. And then it’s too late.

 

Your ERP system has the capability to do rough cut capacity planning. That should help, right? Well, yes, rough cut capacity planning is better than nothing and it can give you some hints as to where problems might be. It does this by having you create “representative routings” that boil very complex routing and bill of material information into an approximation of key resource and key material needs. You see where this is going, right? You can have a perfectly achievable plan based on rough cut capacity planning and still not have a plan you can actually execute because you don’t have insight into the detailed realities of your supply chain.

 

Combine all this with the fact that managing any data in an ERP system is a cumbersome, part-by-part process and there is no wonder that many of the Master Schedulers resort to building complex models in Excel to do their jobs. Except… Excel is not the answer either. As has been commented on previously, while Excel can be effective for one-off analysis, Excel is error prone, non-collaborative and no matter how good you are at modelling, you simply cannot represent the true complexity of supply chain in a spreadsheet.

 

So, what is the answer? Effective management of the master schedule requires a tool that has several key characteristics;

 

  •  Scenarios – This simply refers to the ability to create a copy of your data in-memory in less time than it takes to click a mouse. No, really! Imagine if you had a supply chain planning problem you wanted to solve and were given a tool that allowed you to try three different approaches – each in their own copy of the entire supply chain database. You can make any changes you want at any level and see the impact those changes will have on your supply chain.
  •  Full supply chain logic and data – The scenario idea sounds pretty good. Now imagine that you have data from all of the ERP systems in your supply chain, regardless of the version, or even the ERP brand. Also imagine that the unique analytics within each of those environments could be replicated. Now, if you make a change in one of your scenarios you have the ability to see in detail what the impact of that change would be. Remember that problem we had above with the capacity at a different plant with a different ERP system. With a system like this, we would have seen that issue at the time we were evaluating our options – before any money was spent, before any work was started.
  •  Extremely fast, in-memory data model and analytics – Ok, so the scenario idea with all your data sounds pretty cool. But your ERP system takes hours to crank through its analysis. This tool must take that long too, right? Nope! Now imagine that this system I’ve been describing leverages a unique in-memory data model and analytics. Imagine making a demand change and instantly seeing the impact on a constrained resource at a different plant (one that uses a different ERP vendor) in seconds. That would change the way you do planning, wouldn’t it?
  •  Tools to evaluate options – Ok, so now we have our three scenarios, we’ve tried our three different approaches, and the tool calculated the impact to the entire supply chain in each of the three scenarios. But that’s a lot of data to sift through, right? How do you know what changed and where?  What changes matter, what’s just noise? To be effective, you need the ability to compare each of these scenarios against key corporate metrics and make decisions based on how well each of the approaches align to those goals.
  •  Customizable resources – Each company has their own way of doing things. In some cases it’s a process that has grown organically and that everyone is comfortable with, but in others your process is a strategic advantage that you must protect. The same tool doesn’t fit every company. You need a tool that is flexible enough that it can be customized by the same smart people that built those Excel models and at the same time has the ability to be locked down so your carefully crafted, differentiated process can be maintained.
  • Collaboration – An effective Master Scheduler can’t exist in a vacuum (for physical and metaphorical reasons). They need to work with others to fully explore possible options that are beyond the responsibility of the Master Scheduler. Imagine if you wanted to explore the possibility of expediting a purchased item. Imagine being able to identify the buyer responsible for that item and with the click of a button share the scenario and contextual information that would allow that buyer to understand exactly what you needed and why.
  •  Alerting and notification – The Master Scheduler is a very busy person and can’t be effective if they have to continuously monitor every part they are responsible for. Getting notification of every change and supply delay isn’t effective either because many of those delays don’t actually result in any meaningful change to customer demand or other key metrics. Imagine if rather than monitoring changes, the Master Scheduler only monitored the impact of those changes – and could receive notifications only if those changes resulted in negative impacts to key metrics – such as inventory, capacity or customer delivery. Now they are managing by exception – focusing time on the things that matter.

So, have you hugged your Master Scheduler yet? (I thought we were going to stop and do that back up at the top… oh well, the Master Scheduler’s job is tough enough without a lot of socially awkward hugging getting in the way). I think you can see the challenges that a typical Master Scheduler faces. And I think we’d agree that the Master Scheduler is key to the effective functioning of your business. If your Master Scheduler had tools that could make them much more effective, what impact would that have on your business?

 

Have I represented all the challenges facing the Master Scheduler today? What additional challenges do you see Master Schedulers having to deal with? How do you address these challenges? Comment back and let us know!

The post Tools for Master Scheduling: Hug Your Master Scheduler Part Two appeared first on The 21st Century Supply Chain.

 

 

Originally posted by John Westerveld at http://blog.kinaxis.com/2015/03/tools-for-master-scheduling-hug-your-master-scheduler-part-two/

by Melissa Clow

control tower diagram


Our partner Celestica recently published the following article, ‘Six Steps to Ensure your Control Tower Project is Successful’. The author, Rebecca Schriver, Global Director, Supply Chain Solutions at Celestica, describes the six critical success factors to ensuring control tower projects are delivered on-time with strong end-user support.

 

Developing a successful control tower to manage your supply chain can be a significant undertaking. But through Celestica’s experiences in leading control tower projects, they’ve learned some valuable, hard-won lessons. If you’re considering a control tower project, we’ve pulled together Rebecca’s six lessons to harness the power of data to make faster, smarter and better decisions about your supply chain.

 

  1. Listen to the Data
    In traditional control tower projects, months can be spent developing data extracts in source systems before loading them into the application. Instead, try a rough-cut load using manual file inputs at the start of a project. It’s a lot quicker and helps indicate where data transformations will be required, highlights upfront technical and design challenges and validates the business process and requirements.
  2. Requirements Gathering – Changing the approach
    In Celestica’s experience, users seldom identify requirements well, and even when they do, their IT counterparts aren’t likely to perceive it all correctly. Consider the following:

     

    • Keep requirements gathering simple—illustrate with mock-ups instead of long wordy documents. Also, use data as part of the requirements-gathering approach to validate expected outcomes.
    • Understand the end-the-end business process as well as the inputs and outputs.
    • Outline and understand the overall objectives and key value drivers to ensure you are delivering a differentiating value from what the business uses today.
    • Prototyping as part of requirements validation enables development teams to get a greater understanding of how the development items must come together and what technical challenges are ahead.
  3. Data TransformationFocusing on the data that matters
    We can’t stress enough the importance of aligned data! For most projects this is going to be the number one factor in success. It’s also going to be one of the most time-consuming. Making use of tools and technology that create faster development cycles can reduce development by several weeks and improve the effectiveness of user testing. It’s a lot easier for testers to spot any potential pitfalls early on if they see real data in action.
  4. End-to-End Design Vision – The drive to start developing right away
    After prototyping, don’t dive right into development—as temping as it may be from a timeline perspective. Take the necessary time to understand the end-to-end design of the entire control tower project. Run through how you want the control tower to function and how data will flow through the system. And make sure the entire business team is involved. Collaboration is key! Taking sufficient time at this stage will help avoid potential data integration pitfalls.
  5. The Development Cycle – Build, align, repeat
    A staggering 56% of IT projects don’t deliver on the intended benefits (2012 Mckinsey/Oxford). An effective way to manage this is to use an iterative development approach in which the development work list is broken down into two-week sprints of effort, with continuous communication to business teams through playbacks. This approach also validates that the solution is still on track to meet those requirements you determined in step two (you did do that already didn’t you?). Be sure the playbacks have appropriate context and what is showed can be related back to the business process.
  6. Managing Adoption – Invest upfront and don’t walk away
    The going may be tough at times, but it’s important to stick with it. Ensuring successful early adoption will go a long way in making sure your control tower project is successful. So how do you achieve that adoption? Invest early in super users and key influences and use them as advocates. Design with the lowest-level end user in mind so the system is easy to use and easier to understand. Train all users, both at go-live and beyond, and make sure training materials are accessible. It’s also vital you’ve pre-defined the metrics for adoption, and communicated them to the entire team. That includes managing expectations for when the value will be realized and results will be shown. Stabilization is always further away than you think, so be there to support the business teams for the long haul.

By following these six critical steps you’re well on your way to implementing a control tower solution that comes in on-time and with strong end-used support. Your supply chain will be able to harness the power of your data, allowing you to make faster, smarter and better decisions.

 

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

 

Looking for even more great information about supply chain management. Check out these other great blogs in our Celestica series:

The post Control Tower Success: Six Critical Steps to Ensure Your Project Thrives appeared first on The 21st Century Supply Chain.

 

Originally posted by Melissa Clow at http://blog.kinaxis.com/2015/03/control-tower-success-six-critical-steps-to-ensure-your-project-thrives/

by Meranda Powers

I suspect that few folks in the supply chain management world would argue with the fact that supply chain management is risky business.

 

The reality is that risk comes in many forms (including anticipated risk, uncontrollable risk and unanticipated risk). It’s constantly changing. And the amount of risk being faced by supply chain professionals has been on the rise for the past 20 years.

 

When we talk risk, we’re not just talking about headline-making tsunamis, floods and earthquakes. We’re talking everyday risks as well. (Some might even argue that risk in daily business activities and decision making can be just as, if not more, impactful than exceptional risk events.) Ensuring success in ‘normal’ operating conditions and when faced with catastrophic supply chain disruptions is why developing risk management strategies should be a top priority.

 

Regardless of the type of risk or where it’s coming from, you need to be prepared. While it may be tempting to try to define specific response plans for every potential risk your supply chain might encounter, that would be difficult to achieve. Instead, it’s really about taking a proactive approach that ensures you are prepared to recognize, assess and respond to any disruption that comes your way. Putting plans, processes, enabling tools and technology in place will help you improve reaction times and decrease the overall impact of any disruption.

 

We wanted to share this infographic that looks not only at the types, drivers and impact of risk but also discusses the competencies needed to react to a disruptive event and the advantages that a focus on risk management can bring your organization.

 

supply chain risk infographic

 

Download Infographic

 

If you want to learn more about supply chain risk management, our Knowing the Risks – Mitigating and Responding for Success is a good read. Access it here.

 

 

The post Supply Chain Risks: Big or Small, Plan For Them All appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Meranda Powers at http://blog.kinaxis.com/2015/03/supply-chain-risks-big-or-small-plan-for-them-all/

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!

With consumer markets more volatile and unpredictable than ever before, companies need to make up for a lack of forecast accuracy with supply chains that can rapidly respond to changing demand, says Chris Vosse, business systems analyst with Teradyne.


Demand planners agree: the forecast is always wrong. “We haven’t been able to accurately forecast for a long time,” says Vosse. But rather than try to hone their predictions further, companies should be looking to improve their agility in responding to unexpected shifts in demand.

 

Vosse speaks of the process of “informed risk decisions.” At Teradyne, many components have a lead time stretching over two quarters, and require 26 weeks to procure. Yet customers expect delivery to occur within eight weeks or less. The solution, according to Vosse: “You need to start acting sooner in order to respond later.”

 

Watch now: Teradyne – Managing Demand: How Agility Replaces Predictability

 

Teradyne is determined to give customers exactly what they want, despite the volatility that marks much demand today. In some cases, it has made changes to product while still in the process of building or configuring it. Even with the outsourcing of manufacturing, it has vowed to maintain high levels of service and customer satisfaction.

 

Teradyne can’t just build to a forecast supplied by marketing. “We need to own this,” says Vosse. “Make informed decisions, and start taking control of demand itself.”

 

The answer lies in a more strategic approach to inventory and supply. It’s important to create a “one-number” forecast that is shared by all parties, Vosse says, adding that Teradyne maintains close communications with its contract manufacturers.

 

Teradyne is deploying the RapidResponse planning and forecasting tool of Kinaxis to help achieve those goals. Contract manufacturers feed it data inside that application, allowing Teradyne to create an accurate material requirements plan and achieve a holistic view of the supply chain, “as if we had manufacturing within the company.”

 

The post Teradyne – Managing Demand: How Agility Replaces Predictability – SupplyChainBrain & Kinaxis Video Series appeared first on The 21st Century Supply Chain.

 

Originally posted by Melissa Clow at http://blog.kinaxis.com/2015/03/teradyne-managing-demand-how-agility-replaces-predictability-supplychainbrain-kinaxis-video-series/

by Melissa Clow

Manik Sharma named 2015 Provider 'Pro to Know'A huge congratulations goes out to Manik Sharma, our vice president of industry strategy and innovation, for being named a 2015 Provider ‘Pro to Know’ by Supply and Demand Chain Executive magazine.

 

We couldn’t be prouder to have Sharma join the growing list of Kinaxis executives who have received this coveted award. It comes as no surprise to anyone who knows him that Sharma is being recognized for his dedication to ensuring customer success.

 

“I’m thrilled to be named as a ‘Pro to Know’,” says Sharma. “And I’m looking forward to continuing to educate companies on the Manik Sharma was named a 2014 Provider 'Pro to Know'significant impact that RapidResponse can have on their end-to-end supply chain.”

 

The title of ‘Pro to Know’ is certainly richly deserved and we look forward to seeing what other accolades Sharma will garner in the future. Given his hard work and dedication we’re sure they’ll be many.

 

Congratulations Manik Sharma!

 

 

The post Kinaxis VP Manik Sharma Named a 2015 Provider ‘Pro to Know’ appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Melissa Clow at http://blog.kinaxis.com/2015/02/kinaxis-vp-manik-sharma-named-a-2015-provider-pro-to-know/

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 this interview, hear Kathyleen Beveridge, director of sales operations with Qualcomm discuss “What’s Wrong With Traditional S&OP?” According to Beveridge, the sales and operations planning (S&OP) process brings great value to an organization, but companies need to take a fresh approach in order to ensure more efficient planning cycles.

 

Sales and operations planning involves a number of sequential stops. Mistakes anywhere along the way can lead to inefficient planning, says Beveridge. A new approach is needed that allows companies to become more agile in a difficult business climate.

 

Under the traditional approach to S&OP, it can take upwards of two weeks to compile data. “By the time you get in front of the management team, that data has already changed,” Beveridge says. Qualcomm has adapted S&OP to a weekly cycle, under which it has more frequent discussions with key decision makers. They focus on the state of the company’s supply and demand balance, with an eye toward making “immediate course changes” if necessary. The company also conducts monthly S&OP meetings that focus on longer-range issues.

 

Watch now: What’s Wrong With Traditional S&OP?

 

 

Qualcomm isn’t throwing out S&OP in its traditional form; it’s simply supplementing the practice with shorter-term solutions, says Beveridge. That becomes necessary “if you’re working at a company where demand is ever-changing. Our lead time is shrinking. We need to augment.”

 

Integration of supply and demand planning is essential to a company’s ability to react to volatility. Working with Kinaxis, Qualcomm brought together the two disciplines to scrutinize the company’s project road map, with a goal of implementing capable-to-promise functionality. In the process, it’s able to build what the customer wants, instead of what it forecasts demand to be.

 

The journey isn’t over yet. Having implemented available-to-promise and commitment to finished goods, Qualcomm next wants to extend its visibility and control back to raw materials and semi-finished goods. The ultimate goal is to make possible customization of product. “If we can delay the build-out of finished goods,” Beveridge says, “we’ll be better positioned to satisfy our customers.” And Qualcomm, for its part, will benefit from improved inventory optimization.

 

The post Qualcomm: What’s Wrong With Traditional S&OP? – SupplyChainBrain & Kinaxis Video Series appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Melissa Clow at http://blog.kinaxis.com/2015/02/qualcomm-whats-wrong-with-traditional-sop-supplychainbrain-kinaxis-video-series/

by John Westerveld

Hug Your Master SchedulerI’ve had the opportunity over the past few weeks to investigate how many companies perform their Master Planning practices, and in the process do a pile of thinking about the Master Scheduling role.

 

My conclusion is that if your company is running smoothly, you need to stop what you are doing right now and hug your Master Scheduler. If your company isn’t successfully executing your plan, you should look at the tools you’ve given your Master Scheduler because with the traditional tools, asking the Master Scheduler to do an effective job is like asking da Vinci to paint the Mona Lisa with a can of spray paint. It isn’t going to be pretty.

 

If you think about it, the Master Scheduler is the keystone of your business. They have the unenviable job of being the first point of execution in your planning process. The Master Scheduler sets the build schedule for your plant, or perhaps even for your global supply chain. To do this, they need to balance the realities of the supply chain against the randomness of demand (after all, forecasts are…well forecasts. And you know the rule about forecasts – they are always wrong.)

 

Master Schedulers need to do this while respecting capacity limitations, working the overloads and back-filling the underloads. If that isn’t challenging enough, these constrained resources could be multiple levels away from the point of demand with multiple lead time offsets to consider. Starting to sweat yet? Now think about this; at the same time, the company has firm inventory targets that need to be respected. If your wonderfully leveled master schedule causes you to exceed your inventory targets, it’s back to the drawing board. If you are able to make a schedule that meets all requirements, you no sooner have that schedule ready to go when someone is trying to make it invalid. Scrap, late supplies, demand changes and capacity issues all can force the Master Scheduler to review and possibly adjust their plan.

 

On top of this, the Master Scheduler has multiple other responsibilities. They can be pulled into new order feasibility discussions with Order Fulfillment, they often are responsible for maintaining planning BOMs and are responsible for setting planning parameters like lead times, demand horizons and lot sizes.

 

So, I think we can all agree that the Master Scheduler has a challenging job. But, you’ve given the Master Scheduler the best tools, right? Stay tuned for part two to see how you can help your Master Scheduler with more than just a hug.

The post The Challenges of Master Scheduling: Hug Your Master Scheduler Part One appeared first on The 21st Century Supply Chain.

 

 

Originally posted by John Westerveld at http://blog.kinaxis.com/2015/02/the-challenges-of-master-scheduling-hug-your-master-scheduler-part-one/

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