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21st Century Supply Chain

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by Lori Smith

What if there were little, to no, limitations to the what-if analysis you could do? What if you could change anything (data, working assumptions, business rules) to explore options and see the impact instantly? What if you could do scenario simulations for any function of your supply chain? What if you didn’t need to make it an IT project to create new scenario parameters? What if I go on and on with these questions… ?

 

Like many supply chain capabilities discussed in the industry, it is something touted by many, but not all what-if capabilities are created equal. Many advanced supply chain planning systems involve conditions where computing power must be rationed, scenario parameters are limited and collaboration is not built-in. Yet the value of what-if analysis is in the power to put the ability to do scenario simulations in the hands of many.

 

What-if analysis, in the most optimal condition, would be quick, flexible, extensive, and collaborative. And because it’s fast and easy, the capability would be leveraged fully and often, leading to decision-makers being able to test multiple scenarios projecting the impact of various “what-if” alternatives and evaluating their achievement against relevant operations performance metrics so a team is choosing objectively among a full range of options.

 

And we would argue that is exactly what happens in RapidResponse. It’s our secret sauce after all – well maybe not so secret given how much we advocate it. The point is that what-if analysis is absolutely foundational to our product and among the most critical capability in delivering on the “Know Sooner, Act Faster” value proposition.

 

This came through loud and clear in some recent customer interviews, whereby our customers talked about how scenario simulations are being used across business processes (strategic to tactical) to enable new ways to analyze situations and make decisions… fast!

 

There are several short clips available that I hope you’ll check out, but in the meantime, here is a taste of a few on the topic of what-if.

 

Celestica

 

“…if an order comes in and changes or you get an emergency drop in order, we’re able to see how that order drops in, understand the effect of the order, understand what other orders are at risk in the simulation mode, and seeing right down to how does it affect our gross margin, how does it affect our inventory levels, how does it affect revenue at risk for a quarter end…”

 

Play the video on youtube.com

 

Qualcomm

 

“…we then set up what if scenarios that then become the foundation for our executive team to make any immediate course directions…”

 

Play the video on youtube.com

 

Anritsu

 

“we’re doing scenarios, that really within a matter of minutes.. pinpoints… the risks that we have [in order] to be able to meet our customers’ requirements…”

 

Play the video on youtube.com

 

 

 

What-if you wanted to learn more about our scenario simulation technology? Well we have lots more to show you here: http://www.kinaxis.com/en/capabilities/rapidresponse-supply-chain-software-capabilities/supply-chain-what-if-analysis/

 

 

The post What if there were no limitations to your what-if analysis?  What would you simulate? appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Lori Smith at http://blog.kinaxis.com/2015/07/what-if-there-were-no-limitations-to-your-what-if-analysis-what-would-you-simulate/

by Alexa Cheater

A woman holding a plant brought by the nursery supply chainToday is ‘Take Your Plant for a Walk Day’ (yes, apparently that is a real thing), and in honor of houseplants everywhere I thought I would look at the supply chain of an industry that has long fascinated me – the nursery industry. What exactly goes in to getting all those lovely shrubs, trees and flowers from the grower to the garden?

 

Let me start by saying that I personally do not have a garden. Why? Because while I love plants, they do not love me. No matter how enthusiastically the very knowledgeable staff tell me that this plant or that one can survive anything, the sad truth is none has survived my very, very black thumb, despite years of trying.

 

That of course does not stop me from visiting my local nursery to see what they have in stock. From seeds to shoots to seedlings and fully-grown shrubs, trees and flowers – the complexities of getting these plants to the end consumer are many.

 

The Nursery and Garden Industry of Australia (NGIA) has very nicely put together two videos about the supply chain issues production nurseries face. I’ve taken the liberty of sharing them here for easy viewing.

 

The first outlines the issues, while the second, which is comprised of a series of clips, talks about potential solutions. Neither is very long and both are worth watching even if only for the fun tractor graphics at the beginning.

 

 

 

One of the main issues presented is a lack of standards. In pots, trays, transportation systems and even among the different plant species themselves. AmericanHort, which is a consolidation of the American Nursery and Landscape Association and the Association of Horticultural Professionals, has put together the American Standard for Nursery Stock, which establishes common techniques for things like measuring plants, determining container size and proper classification of species.

 

Another large problem NGIA points out is lack of organization and ineffective planning, which leads to wasted time and wasted product. If your demand planning isn’t on point you may end up with a surplus of plants you’re unable to move. Then you’re left with the choice of letting them go to waste, or trying to keep them for another season, which presumably has a higher cost associated with it than many other industries. Plants can’t just be packed away on a dusty shelf like non-perishable goods. In most cases, they require daily care and maintenance to keep them alive – a cost that may not be feasible for many nurseries or other retailers.

 

Something not included in the videos but that I suspect is a major supply chain issue for the entire nursery industry is unanticipated risk. Things like droughts, disease and flooding can all wreak havoc on plant crops, particularly if they’re grown outside instead of in greenhouses. A recent article by Greenhouse Management suggests that growers should focus on drought-tolerant plants not only to help protect their own crop, but to appeal to consumers who are faced with the same poor growing conditions. Then there’s risks like an invasion of foreign species (aka weeds) threatening your crop, or bugs snacking on your seedlings.

 

I can easily see how the ability to quickly run ‘what-if’ scenarios could be hugely beneficial in determining if you can still meet consumer needs in the event you lose 30% of a specific crop to any of the mentioned supply chain risks.

 

I’m not sure how many people actually participate in take your plant for a walk day, but I for one am hoping to see a mass of lilies, orchids, violets and spider plants being paraded down the street in the arms of their proud owners. If I could keep a plant alive long enough to blossom I’d want to show it off too.

 

The post From Grower to Garden: The Complexities of the Nursery Supply Chain appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/07/from-grower-to-garden-the-complexities-of-the-nursery-supply-chain/

by Alexa Cheater

Racks of clothing represent one stop on the fashion supply chainWhether you’re a fashionista or overly fond of the frumpy look, chances are you’re buying into the multi-billion dollar clothing industry. And whether you realize it or not, the garment industry supply chain is changing – both for the better and for the worse.

 

Cambodia, China, Taiwan, India – look at the ‘made in’ labels on your clothing and you’re likely to find these popular clothing manufacturing countries. A recent Wall Street Journal article reveals African nations such as Ethiopia may soon be added to that list thanks to their lack of minimum wage regulations. Apparently, the $67 a month workers make in Bangladesh was getting to be too costly. This represents what many feel is wrong with the industry – large companies willing to sacrifice human dignity and safety to save on their bottom line.

 

There have been countless examples of big fashion brands finding themselves caught up in controversy thanks to their supply chain, and the use of factories that pollute, employ child labor, mistreat workers or worse. Sadly, it took a major tragedy to open the eyes of millions to see exactly what goes into making the clothes on their backs.

 

In April 2013, more than 1,100 factory workers lost their lives in the name of fashion in the Rana Plaza collapse in Bangladesh, now recognized as the deadliest garment-factory accident in history. Warnings to avoid using the building after cracks were discovered the day before were ignored and workers were ordered back to work. But out of the rubble several movements emerged, demanding the fashion industry straighten up their seams.

 

Thanks to social campaigns like Fashion Revolution Day and organizations like FairTrade, choosing clothing from companies that adhere to environmental and ethical standards is becoming more popular. In essence, fairly traded clothing has become its own fashion trend, another topic the Wall Street Journal has recently covered. Companies like Patagonia, Mountain Equipment Co-Op, Prana and many others have all lifted the veil on their supply chains to some extent, proving to consumers they care about how and where their clothing is manufactured, and the impact it has on the environment, the community and individual lives.

 

Hopefully, more brands will follow suit. In a recent article, Maxine Bédat, co-chair of Fashion Revolution Day, was quoted as saying, “Ninety-five percent of brands don’t know where their materials come from, and 75 percent don’t know where all their clothes are cut and sewn.”  This really speaks to the heart of the issue – global supply chain visibility and transparency. Extended supply networks create substantial obstacles in terms of supply chain visibility and coordination. Even when companies have the right intentions, being able to understand what needs to be changed, and where or how, is an enormous challenge, and then subsequently, being able to understand the options and impact of corrective action only makes the task more difficult. Companies are simply not equipped with the tools needed to manage their global supply chains in a way that keeps them in control of it.

 

Companies require a unified view across the enterprise regardless of the number and location of supply chain nodes. They must be able to have a full representation of their supply chain network in order to coordinate activities as if the operations had remained in house. That way when an event occurs that creates supply chain risk (immediate or potential future harm) companies can know and react quickly. Even with long term supply chain planning, knowing sooner of the market requirements, corporate risks, industry trends, and the resulting organizational impact is strategic to making the right decisions for the future.

 

Businesses aren’t having to answer only to the consumer on these issues. Governments are starting to get involved. The European Commission is expected to launch a flagship EU Garment Initiative before the end of 2015. The idea would be to provide guidelines on responsible business practices in the supply chain and engagement practices when dealing with producing countries. It’s still not clear whether these new guidelines will be voluntary, or enforceable regulation.

 

The European Commission has gone on record saying, “The issue of responsible supply chains touches upon several aspects of sustainable development ranging from safety at work, the use of chemicals, child labor, to ‘living wages’ and collective rights, including enforcement of appropriate national legislation and of international standards and commitments as well as many others issues more directly linked to the sustainable competitiveness of the EU companies involved in such supply chains. It is being proposed because it is close to citizens’ concerns and expectations, partly due to the increased attention given to this issue following the tragedy of the collapse of the Rana Plaza factory building in April 2013, which revealed serious shortcomings in the occupational safety and labor conditions of Bangladeshi workers in the garment industry.”

 

And it isn’t just overseas where officials are stepping in. Los Angeles’ garment industry is fretting over a city-wide proposed pay hike for workers, that would see the minimum wage in the city raised by 50% to $15 an hour by 2020. Some apparel manufacturers in the city are already considering closing up shop and moving outside the city or importing more from foreign markets to offset the increased labor costs. While the wage increase will undoubtedly have a positive effect for the workers who actually make the clothes –and there are approximately 45,000 of them in Los Angeles – it’s likely to hurt the bottom line of apparel manufacturers who for years have prided themselves on being ‘made in America.’

 

Will that push them to change their current supply chain and seek our factories in countries where the cost of doing business is less? Perhaps. Or perhaps consumer demand will grow enough in the next five years that ensuring a safe, sustainable and ethical supply chain will just be considered a cost of doing business. At the end of the day, at the core of any change will need to be the supply chain systems that can enable the supply chain visibility and process innovation required for ethical and sustainable global supply chain management.

 

So the next time you go to buy that perfect pair of jeans take a minute to consider the journey those pants have been on. The supply chain that brought them to you is made up of so much more than just trucks and cargo boxes. It’s made up of people. The person in the field harvesting the raw materials, the person in the factory who sewed the garment, and even the person who helped you find your size in the store. Each one deserves recognition and fair treatment.

 

 

 

The post The Fashion Supply Chain: Unraveling the Reality appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/07/the-fashion-supply-chain-unraveling-the-reality/

by Andrew Dunbar

The future of inventory managementThis post concludes my inventory management blog series.

 

Throughout this series I’ve proposed an elevated role for the inventory manager that challenges the assumption that an inventory manager is a victim of his colleagues’ business decisions and plays only a limited role in formulating inventory results. Inventory management is not a stand-alone business process that occurs after other processes are complete. It is a high-level process that should be integrated into other supply chain planning processes including, at a minimum, sales and operations planning, master production scheduling and supply action management. Inventory managers should support multiple business objectives and should have business integrated targets related to inventory levels, customer service levels, total inventory cost, and inventory quality.

 

The inventory manager needs to act like an air traffic controller, effectively collaborating with his management peers to guide and coordinate their processes together in a way that leads to optimized inventory results. They should be able to update safety stock and order policy settings, and they should be able to collaborate on improvement initiatives related to lead-time optimization, supply and demand variability, and supply chain agility. It’s important for the inventory manager to have strong analytic skills and a deep understanding of the principles of supply chain management as a successful inventory manager will understand how to meet his targets without negative consequences in other areas of the business. The company should support the inventory manager with access to continuous learning resources and development courses to ensure they stay current and can take advantage of recent industry advancements.

 

The planning system should embrace the complexity of the inventory management process by offering advanced configuration options, but should minimize the complications by providing simple and standardized business processes. The planning system should visualize business goals, predict performance and exceptions, and prescribe realistic resolution options. The inventory manager’s dashboard should help them to understand the complex relationship between multiple business processes, and help them to identify and address high-priority improvement opportunities. The basic daily process for the inventory manager should be to sense the current status of the inventory plan, assess any exceptions or opportunities, formulate a response, recalibrate based on the predicted results and collaborative input, deploy the changes to the planning system, and document any assumptions or notes to learn from the results.

 

The inventory management survey we completed last month highlighted that the inventory manager’s role varies widely from company to company, and that they often only have limited authority to impact their company’s inventory results. How does your inventory manager’s role compare to the one I’ve described here? With that answer in mind, I’ll ask again: Are you getting the most out of your inventory management process?

 

Don’t agree with the role I’ve described here? Are there business goals I’ve missed that the inventory manager should be accountable for? Please share your feedback with me in the comments below.

 

Interested in learning more about inventory management? Check out the rest of the blogs in this series.

 

 

The post The Future of Inventory Management appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Andrew Dunbar at http://blog.kinaxis.com/2015/07/the-future-of-inventory-management/

by Lori Smith

Supply chain visibility… ah, yes, possibly the most over used term in the industry. And as is typical with over used terms, there are as many interpretations as there are colors in a kaleidoscope. What it means, what it involves, and what the goal is can be very different depending on the person, the organization… and even (or especially!) the solution provider.

 

Below you will find video links to Kinaxis customers that speak to the visibility they have gained from RapidResponse, which so fittingly articulates the three key components we believe are critical to gaining the type of visibility that can produce real value for an organization.

 

Multi-Enterprise – For visibility to be truly insightful, it must be all inclusive. A company must have the ability to consolidate data from multiple sites (internal or external to the organization) for a holistic view of the extended supply chain. No longer is it only an issue of visibility between functions (and that is still a big issue!), but also of visibility between companies. Piece meal information will only provide a look into a fraction of the business. For global performance management, one needs global visibility. A multi-tier, multi-enterprise view of operations is required to have a full outlook of the business and to strategically manage operations as appropriate.

 

Harmonization – At the heart of multi-tier, multi-enterprise visibility is the necessity for data harmonization across multiple data systems. In large part, this means achieving consistency in things like item identification, unit of measures, and time buckets. If you can’t connect the data in a synchronized way, then you will still be faced with trying to analyze separate silos of information. A single “view” of the supply chain must equate to a fully reconciled representation of the supply chain data pulled from disparate systems.

 

Modeling – Visibility without the tools to drive action gives only minor advantages to the organization. In environments where there are hundreds of decisions throughout the day that must be made at the moment, static visibility alone is not enough. The problems are complex and require one to interact with data in a collaborative way performing real-time calculations and data modeling. One needs to be able to analyze the information, not just see it. They must be able to test out different decision alternatives to understand the cause and effect of their actions; this takes visibility from seeing “what currently is” to seeing “what may be”.

 

Enough with my pontificating. Check out these “2-minutes or less” video clips to hear from your peers on what they have gained with this value-based definition of visibility.

 

ANRITSU
“…before it was a chain of a planner, to a buyer, to a CM, and that could take days of communication. Now that planner has visibility all the way down to a CM level immediately.”

 

Play the video on youtube.com

 

TERADYNE
“…we worked with our contract manufacturers and said, ‘Give us the feed, give us the feeds into our RapidResponse system so I can re-create your MRPs in our system and we can link them together and get a holistic view of our supply chain.’ “

 

Play the video on youtube.com

 

CELESTICA
“Having the visibility is one thing, but being able to synchronize it so that you know the cause and effect of everything… is something that’s key to our clients… ”

 

Play the video on youtube.com

 

 

Our Customers Are Talking – To hear more from Kinaxis customers on the topics of end-to-end supply chain visibility and orchestration, what-if scenarios, platform features and business results, watch these video clips.

 

The post Top 3 Supply Chain Visibility Necessities… As Best Explained by Our Customers appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Lori Smith at http://blog.kinaxis.com/2015/07/top-3-supply-chain-visibility-necessities/

by Alexa Cheater

Cocoa powder represents a supply chain riskHi, my name is Alexa and I am a chocoholic. It’s been less than a day since my last indulgence.

 

There’s no two ways about it. When it comes to the cocoa-laden confectionery, I’m hooked. It doesn’t matter if it’s milk, dark or white. Anything with even a hint of chocolatey goodness will suffice – and sadly for my waist line, one little taste is never enough.

 

What’s even more unfortunate than the effect on my figure is that it’s about to get a whole lot more difficult to feed my addiction thanks to a lack of insight into supply chain risk. The Wall Street Journal (WSJ) recently posted an article about the huge shortfall in the cocoa crop in Ghana. Dry weather coupled with the late application of vital pesticides to cocoa trees has caused the crop to shrink significantly, and sparked fears growers may not be able to deliver enough cocoa to fulfill their contracts. That means manufacturers will likely be scrambling to find enough cocoa to satisfy their chocolate producing needs.

 

Skyrocketing prices aside, this latest news is enough to send any chocolate lover to the store to stock up, and really puts the spotlight on a major supply chain risk in the $7 billion cocoa-futures market. As the WSJ points out, there is a drastic over reliance on the Ivory Coast and Ghana when it comes to the global cocoa supply chain. Together they account for more than half of the world’s cocoa supplies!

 

With that much of the world’s supply coming from one region, it’s no wonder the price and availability of chocolate fluctuates as wildly as it does. Natural disasters, poor growing conditions, pandemics, war, political and social unrest, terrorism and accidents can all have huge consequences on supply chains relying on either a single supplier, or suppliers who are all in the same geographic region.

 

So my plea to all you supply chain managers our there is this. Know your supply chain risks and have a plan of action! The current situation in Ghana should serve as just another reminder that there is inherent risk in putting all of your chocolate chips in a single bag. This chocolate crisis is far from the only case of consumers paying the price, literally and in terms of a lack of product availability, when the unexpected strikes.

 

My colleague John Westerveld has previously written about the subject of supply chain risk, outlining how massive flooding in Thailand in 2011 had a large-scale impact on the manufacturing of hard drives. And it’s not unusual for natural disasters to be among the largest supply chain disruptions each year. An article by Supply Management points out three of the top five supply chain disruptions for 2014 were due to a natural disaster.

 

The five worst disruptions of 2014 (estimated revenue impact, and time needed to recover)

 

  1. Typhoon Halong, south east Asia ($10+ billion, 41 weeks)
  2. Severe flooding, Long Island, New York, US ($4+ billion, 38 weeks)
  3. Typhoon Rammasun, south east Asia ($1.5+ billion, 38 weeks)
  4. Gas explosions, Kaoshing, Taiwan ($900+ million, 26 weeks)
  5. Hazardous chemical spill, Arizona, US ($900+ million, 10 weeks)

That’s why John’s blog points out the importance of having a supply chain risk management strategy in place for just such an unexpected and uncontrollable event.

 

That strategy needs to take into account how your supply chain will handle unpredictable occurrences. Do you have another supplier who can fulfill your needs? Do you have a way to quickly alert others within your organization to any potential order delays or shortfalls? Do you have a way to easily run ‘what-if’ scenarios to determine which course of action will have the smallest overall impact?

 

I won’t dive any further into the issue of supply chain risk and how to manage it here. You can check out a number of blogs we’ve published on the issue. We’ve even put together a great infographic and informative white paper on how to plan and respond to supply chain risks. So while you take a look at the other great resources we have available on the topic, I’m going to enjoy the candy bar that’s been sitting in front of me the entire time I was writing this blog.

The post A Chocolate Addict’s Plea: Know Your Supply Chain Risks! appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/07/a-chocolate-addicts-plea-know-your-supply-chain-risks/

by Lori Smith

“Sense and Respond”, or as we position it, “Know Sooner, Act Faster”, is a favorite topic on the Kinaxis blog. Many have had a lot to say on the topic (see here, here and here as examples). And now, so do our customers.

 

Before we get to that, let me ask you, do you know what the first step is that leads to being able to sense and respond? Acceptance – a recognition that you can’t plan perfectly. I suspect you are thinking to yourself, “everyone knows this and accepts this already”, right?   Well, in theory and in their words they might, but in execution… not so much. For example, at a meeting with a prospect recently the team talked at length about their need to be more responsive and flexible. They said they needed to advance their processes and bring them together to be able to be more agile and effective in their planning, analysis and decision making. Awesome… music to our ears! And when the conversation turned to the capabilities they were seeking, guess what happened? They presented a series of feature checklists for each individual function, primarily focused on planning capabilities. Hmmm.

 

When an organization truly recognizes the difference between planning better and knowing sooner, acting faster, it means they are looking at the problem differently. And equally important, they start looking at the solution differently. The conversation changes from looking at ways to optimize the plan, to looking at ways to optimize decision-making processes when there are variances. They consider a set of capabilities that are fundamental to creating a competency in “sensing and responding” – from getting harmonized data, to being able to do quick simulations, to bringing teams together to make informed risk decisions and business tradeoffs.

 

We’ve posted a series of Kinaxis customer clips, among them are a few that speak to this theme. There are some pretty good insights that are definitely worthy of a listen.

 

TERADYNE

 

“…we haven’t been able to accurately forecast for a long time, and it was just fooling ourselves, and so years ago we really embraced this philosophy that, “No we can’t, so what can we do about it?”… and so what we began doing was… ”

 

Play the video on youtube.com

 

 

QUALCOMM

 

“We’ve learned to accept and embrace that a forecast is wrong, rather than continually try to influence a customer to correct that. I think that we just accepted that there is just inherent forecasting inaccuracy. So to mitigate that we… ”

 

Play the video on youtube.com

 

 

AVAYA

 

“If I get a sales-out spike of two times my run rate, an alert goes to the planner. We go look at it. Is it an inventory problem? Is it not? Can I rebalance between regions? So in very tactical ways, we’ve become much faster at sensing and responding.”

 

Play the video on youtube.com

 

Our Customers Are Talking – To hear more from Kinaxis customers on the topics of end-to-end supply chain visibility and orchestration, what-if scenarios, platform features and business results, watch these video clips.

 

The post Sense and Respond – A Concept In Need of More Than Just Lip Service appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Lori Smith at http://blog.kinaxis.com/2015/07/sense-and-respond-a-concept-in-need-of-more-than-just-lip-service/

by Alexa Cheater

Bill Dubois, host of our Late Late Supply Chain Show, had the opportunity to sit down with Jeff DeGraff, a well-respected innovation thought leader dubbed “The Dean of Innovation” to find out what you can do to get those creative juices flowing. And yes, it does involve stepping outside of your comfort zone.

 

DeGraff says it really takes three main things to become an innovator, and all of them relate to diversifying your thinking.

 

Be Self Aware

 

The first stop on the journey to a more ‘innovative you’ is to become aware of your thinking patterns. DeGraff says that while many of us continually work to improve ourselves, we rarely take the time to examine our dominant logic, which is a set of tenets or beliefs that determines what we value and what we don’t. This dominant logic is often what gets us stuck in grooves that can be hard to get out of. By recognizing your dominant logic, and finding a way to rise above it, you’ll have a better chance at innovation.

 

Feed Your Head

 

DeGraff says it’s critically important to “get different things in your head.” He suggests reading something you wouldn’t normally read, encountering something you wouldn’t normally encounter, and looking for the good in those experiences.

 

Change the Guard

 

Surrounding yourself with the same people day after day may be a way to make you more socially comfortable, but it could be killing your innovation process. DeGraff says he routinely sees people only hang out with those who have the same thoughts and beliefs as they do. He recommends expanding your intellectual horizons by going to different places and taking part in different groups. You never know what you’ll learn!

 

Watch the entire interview below to see what else DeGraff has to say on innovation.

Play the video on youtube.com

 

Now that you’ve learned the keys to unlocking your creativity, it’s time to put your new skills to good use. So strap on your idea hat and get to work on becoming the next great innovator of the 21st century! Or just use them to come up with an amazing concept to impress your boss at your next business meeting. Your choice!

 

The post Getting Creative with The Dean of Innovation appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/07/getting-creative-with-the-dean-of-innovation/

by Carol McIntosh

Forward Thinkers

 

Car on a foggy roadAs you can probably guess, this is the last step in reaching Stage Five for your Supply Chain Planning System of Record (SCP SOR).

 

Why can’t we predict everything?

 

Predictive analytics are one way to forward think. Quantitative analysis has really become popular and there is no lack of data. Data scientists are the new generation of supply chain planners. However, the assumptions and variables can be wrong… leaving you with a lot of data, but zero visibility. How do you manage the risk?

 

Supply chain is a risky business!

 

Risk management is being seen as a strategic imperative in supply chain. Events like natural disasters, world economic issues, regulatory changes, demand volatility all wreak havoc on your supply chain. With shorter lead-times and fierce competition, a missed delivery can result in losing customers and missing financial projections. A generic pharmaceutical company I worked with told us that when they miss a delivery to Walmart for a SKU they can loose the sales for the entire product line.

 

On the other hand, I have worked with a company that within a few hours after learning about the Japan earthquake and tsunami of 2011, were able to determine the impact of supplier late deliveries and very quickly find alternate sources of supply. How was this done?

 

They already had a risk management strategy in place using what if scenarios. When they modeled the impact of the tsunami, they created multiple versions of the data with different variables and assumptions. The scenarios were compared and quickly the best course of action was agreed upon. A recent Forbes article said ‘the more paths travelled the greater the likelihood of coming up with the best answer’. That is really what risk management is about. In a study completed by Accenture, they found that more than 75% of the 1,000 plus executives they interviewed consider operations risk management to be very important in addressing supply chain risk issues. They also learned that various industries have their own approach. The levers that they value for trade off decisions were different.

 

How does risk management relate to a SCP SOR?

 

What if analysis, scenarios, simulations, modeling, business tradeoffs, risk analysis… If you haven’t heard these terms then it is time to start becoming a forward thinker!

 

Gartner speaks of the ability for your SCP SOR to run multiple what-ifs on the planning model to assess alternative trade-offs at different levels of granularity and different time horizons.

 

The pressures companies face today have made this a mission critical requirement. At my former company we were performing what if analysis, dropping in large forecasts for hundreds of products into a scenario and after a few seconds, analyzing the impact on our supply plan, our new purchase requirements netted against our orders, our capacity, our inventory levels and of course I was always asked ”What is the increment sales $?”  We answered that question also. We were literally able to change any record in a virtual copy of the data and have the system calculate the impact within seconds. No one, not your customer or your CEO is willing to wait hours for an answer, nor should they. There are SCP SOR’s that do this very well and not all are created equal.

 

Forward thinking in sales and operations planning and other processes

 

Scenarios are of value with any supply chain process such as inventory planning, supply management, demand planning, order fulfillment, or capacity planning. What surprises me most is the lack of forward thinking with sales and operations planning. Many organizations I have met with still use business intelligence or data warehouses to gather data for sales and operations planning. The S&OP meeting is a review of PowerPoint slides telling everyone what they just did and NOT what they are going to do.

 

The most strategic use of scenarios is to support the process of sales and operations planning. Evaluating trade off decisions and selecting the right course of action in a collaborative discussion with Sales, Marketing, Finance and Operations is a guarantee for success.

 

The End?

There is never an end in supply chain. There will always be another five steps to achieve. Thanks for reading this practitioners view focused on The Right Talent — SCP SOR Building Blocks — Connecting the Dots — Collaborative Management — and Forward Thinking.

Looking for more information about Supply Chain Planning System of Record? Check out the rest of the series!

 

The post Step Five: Stage Five Supply Chain Planning System of Record (SCP SOR) appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Carol McIntosh at http://blog.kinaxis.com/2015/07/step-five-stage-five-supply-chain-planning-system-of-record-scp-sor/

by Alexa Cheater

Our own Trevor Miles, VP of Product Innovation and Thought Leadership, had the chance to sit down with Bob Ferrari of Supply Chain Matters to talk about multi-industry supply chain challenges. Their in-depth interview touched on the challenge multi-industry sales and operations planning (S&OP) teams have when it comes to various cross-functional information and decision-making silos.

 

Trevor relayed how he often sees businesses looking to gain “a more detailed understanding of the various tradeoffs of decision-making, especially related to various competing metrics.” Adding that for many the most significant technology focused supply chain challenge often relates to data – making sense of it and providing proper context. RapidResponse is aimed at harmonizing those needs, providing a single data model for planning and decision- making.

 

Kinaxis blogger Andrew Dunbar, also recently published an article on defining supply chain challenges. He notes there are widely differing opinions on what the biggest supply chain challenge facing the industry is, and that each business needs to evaluate its own situation and determine their own challenges before developing a plan to deal with them.

 

He recommends an approach by Peter Bolstorff, a Supply Chain Council Executive Director with APICS. The idea is a fundamentals-first approach to strategic planning when defining those challenges. Andrew’s blog also highlights a common mistake business make when developing a supply chain strategy, which is to select key initiatives or technology platforms and a list of best practices, and work backwards to highlight the problems solved. The same issues, although arguably on a more complex scale, face multi-industry supply chains.

 

During the course of their interview, Trevor and Bob also spoke about the notion of supply chain control tower capabilities, and where this type of capability stands today. Trevor mentioned two distinct approaches – a logistics execution approach and an operations and planning resource approach. While he sees a role and value for both capabilities, he does lean toward the operations and planning resource approach due to the ability to bring together planning and execution in a near real-time perspective.

 

The complete Supply Chain Matters interview on supply chain challenges can be found here.

The post Multi-Industry Supply Chain Challenges appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/07/multi-industry-supply-chain-challenges/

by Carol McIntosh

Collboration is step four in acheiving a stage five SCP SORCollaborative Management is Step Four to a Stage Five Supply Chain Planning System of Record (SCP SOR)

Supply chain collaboration. What is it and why is it so important?

 

Today there is a focus on supply chain analytics and the automation of decision making. However, this does not preclude the need for humans and collaboration.

 

A quote from a Forbes article read ‘humans evolved to survive and collaborate to ensure survival’.

 

In my first blog I wrote about talent management. The millennial generation thrives on working in a social collaborative manner. In supply chain they need to share plans, assumptions and recommendations with others.

 

The Cloud

 

The good news is that working in the cloud makes collaboration that much easier. It is estimated that the market for cloud-based supply chains is growing at a compound annual rate of 19%.

 

Why Collaborate?

 

Yesterday the emphasis was on vertical supply chains while today companies require horizontal supply chain excellence. Global companies require data and information to be shared and decisions made across the organization very quickly.

 

Those of us raised in the traditional supply chain era where functional expertise was the #1 priority may think of collaboration as a very nebulous term. Today it is a necessity for timely communication and decision making from the customer to manufacturer to supplier.

 

The emerging digital supply chain requires data and analytics AND social media functions.

 

How do you define collaboration?

 

Let me summarize in a few bullet points a definition of collaboration:

 

  • sharing of data across organizations, internally and externally
  • sharing of what-if scenarios
  • capturing everyone’s input and assumptions
  • capturing approvals and rejections of plans
  • identifying who has been impacted

Ultimately it is about…

 

  • creating, sharing and capturing information/insight (not just data) with speed and confidence

And it should be…

 

  • event-based, focused on sharing exceptions
  • results-based, sharing the result of a plan or decision
  • impact-based sharing the impact of a plan or decision on others

How does this relate to the SCP SOR?

 

The SCP SOR must be intelligent enough to help you connect with the right people and facilitate collaboration. Technology is an enabler to making the best decisions. People, and human judgment will always be required.

 

When I am working with clients a common topic is ‘managing risk’. Knowing sooner and acting faster. People want to create and share scenarios across the organization and with their partners. It is the combination of technology and collaboration that addresses this need.

 

The Internet of Things, the use of interconnected devices, is rising. Products and processes must be highly integrated and interconnected. The collaboration needs to be embedded in the process for the system to be most effective. Everyone’s input and analysis can be captured and tracked. It can all be based on events – coalescing around a particular issue to achieve a particular outcome.

 

In my next blog the topic will be ‘Forward Thinkers’. See you then.

 

The post Step Four: Stage Five Supply Chain Planning System of Record (SCP SOR) appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Carol McIntosh at http://blog.kinaxis.com/2015/07/step-four-stage-five-supply-chain-planning-system-of-record-scp-sor/

by Alexa Cheater

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Join us on July 7 at 1pm EDT as we sit down with “The Dean of Innovation” Jeff DeGraff for a live Q&A.

 

Jeff’s creative and direct take on innovation has made him a world-renowned thought leader and helped him earn the title of “The Dean of Innovation.” Putting his practices into action, he advises Fortune 500 companies on how to grow, change and ultimately move forward to see positive results.

 

An enthralling and inspirational speaker, this is an amazing opportunity to learn a bit about Jeff’s unorthodox view of innovation as he shares his ideas on combining theory and practice to instill the mindset needed to make innovation truly happen.

 

Who: Jeff DeGraff “The Dean of Innovation”

 

What: Live Q&A

 

When: July 7 at 1pm EDT

 

Where: Live Online Streaming Event

 

Save the Date!

The post Live Q&A with Jeff DeGraff “The Dean of Innovation” appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/06/live-qa-with-jeff-degraff-the-dean-of-innovation/

by Andrew Dunbar

Woman touching a virtual screenThe modern day inventory manager described in this series is the backbone of your company’s inventory planning process. She has a strong understanding of supply chain fundamentals and is an expert at controlling the key levers impacting the inventory company’s investment in inventory. All that’s left is to add a planning system that enables her to work effectively. If you leave her to build reports and metrics that she needs in excel then she’ll spend all her time crunching numbers instead of planning your company’s largest asset. So, what features should you look for in a good planning system?

 

  1. All your data’s in one place. Your planning system should combine all your company’s data in one system. It should be up-to-date (daily at a minimum), and include all the input data required to make your inventory planning decisions.
  2. Closed Loop. If you don’t execute with your planning system, there should at least be a closed loop between the systems so you don’t spend all your time transcribing after making a decision.
  3. Built in reporting systems should immediately alert your inventory manager to changes requiring response. Agile response can make all the difference.
  4. Your inventory manager needs a dashboard that can give her a clear picture of the current status of the inventory plan and provide insight that guides her actions each day. It’s also useful to have more in-depth tools that provide a visual representation of a wide array of metrics simultaneously to help identify concerning trends and improvement opportunities across all the levers in her toolbox. While it can be hard to find time for it, exploratory analysis often pays big dividends.
  5. I covered this last week, but I really can’t stress enough how important it is to select metrics that support all of your business goals. It’s important that the impact of you planning decisions are visible across all parts of your organization. These metrics should be using live data, and you should instantly see the results of the changes you make.
  6. Interactive charts and graphs. The metrics on your dashboard should be interactive to enhance their analysis value. You should be able to hover your mouse over charts to read key figures, and you should be able to drill into the details with a single click. Metrics should update immediately when you make changes and you should be able to filter the input data to dig in to areas of concern.
  7. Hierarchies. Data hierarchies allow you to see your data at various levels of aggregation. Imagine being able to see your metrics at a global, regional, country, or site specific level with a click of the button. Hierarchies can be built into dashboard and reports to allow instant filtering to look at key details.
  8. What-if scenarios allow you to immediately calculate the results of changes you make so you can evaluate the results before committing the changes to your master data. You can easily lose a whole day if you have to wait for your ERP system to refresh overnight before you can understand the impact of a settings change.
  9. When you see something wrong in your metrics that requires collaboration, you should be able to quickly send a message to the person responsible for that part. If you’ve created a what-if scenario, you should be able to share that with your colleagues to get their input or buy-in.
  10. Task flows. Standard business processes save time and can help educate new employees. Many common inventory task are repetitive and best practices should be captured in task flows to maximize the efficiency of these tasks.

The tools described above enable the inventory manager to respond to changes when they happen, not when her phone rings. It allows her to visualize their inventory plan, predict the impacts of her actions, and effectively collaborate with her colleagues. It allows her to redefine the role of the inventory manager and add new value to the company’s bottom line.

 

Interested in learning more about advanced supply chain systems of record? Check out this blog series by my colleague Carol McIntosh. Stay tuned for the final post of this series on inventory management where I’ll share some results from our recent inventory management survey and share my final thoughts on the role of the modern inventory manager.

Interested in learning more about inventory management? Check out the rest of the blogs in this series.

 

The post Inventory Management: Technology Enablers appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Andrew Dunbar at http://blog.kinaxis.com/2015/06/inventory-management-technology-enablers/

by Matt Benson

A woman reviews an S&OP related documentAs I was presenting at the European Supply Chain and Logistics Summit last week, the overriding memory I’ll take away was the number of people that were nodding and pointing at the screen when I talked about how unplanned supply chain events that occur need to be addressed immediately and that they cannot wait to be included as part of a new S&OP cycle.

 

Traditionally, an S&OP cycle is a process geared towards taking a medium/long-term forecast, balancing with aggregate level resources and generating questions/answers to establish preventative action. Usually it’s seen as a monthly process that follows this cycle:

 

  1. Collate actual data and perform performance analysis
  2. Start demand planning cycle
  3. Establish supply status
  4. Perform balancing and establish variances
  5. Agree on corrective action and present solutions
  6. Executive decision and commit to the business

However, this process makes several broad assumptions:

 

  •  Is your forecast accurate? The industry average is approximately 65%. What’s yours?
  • Are your ‘optimization’ based balancing engines up to the job? Many companies establish a large number of unchecked, rarely revised and estimated parameters that accompany many ‘black box’ solutions. That means very often an ‘optimized’ solution is far from that and often unfathomable in terms of interpreting the results. How believable is your result and can you explain it?
  • The monthly S&OP also assumes that supply chains are stable! Really? In today’s environment?

What about the following possible events:

 

  • Chaos management and large scale firefighting?
  • Volume of orders changing?
  • Supply variability?
  • Rogue marketing teams?
  • Things break!
  • Things get lost!
  • Resources fail!
  • Product mix changes?
  • Reacting and responding to competitor strategy?
  • Acts of god!

Sure, some of these events could be categorized as ‘daily operational planning issues.’ If these issues are relatively small and within permitted boundaries of acceptability that’s fine. For example, it’s unlikely that if a supplier delivers one short on a delivery of a million units that it will have much impact. But what about the events listed above that would normally be considered during an S&OP cycle? What happens if they occur midway through a monthly S&OP cycle?

 

Before the event, I took a look at the top 25 Gartner Supply Chain Planning companies and saw some commonality and overriding statements from these organizations:

 

“…improving speed to response…” – Unilever

 

“…designed and brought to market in a week…” – Inditex

 

“…end to end visibility…” – Samsung

 

“…using what-if simulations and real time analytics…” – Colgate

 

“…driving waste out of supply chain operations…” – Nike

 

“…improving forecast collaboration…” – Coca Cola

 

“…collaborative…” – Seagate technology

 

“…accelerating time to market…” – 3M

 

These guys are ‘Planning in the NOW’ – they’re not waiting for the next S&OP cycle to make operational and tactical decisions that influence event results. They’re responding to supply chain events collaboratively and as quickly as possible.

 

In fact, DRK Research recently published a paper that directly linked the impact of a supply chain unplanned event to the amount of time taken to discover it, respond to it and correct it. Those companies that react quickest, see much less disruptive impact.

 

So, if your competition is doing this – could you be doing it too? Is the traditional S&OP cycle now defunct?

 

Well, at Kinaxis, we think that having a single end-to-end planning engine allows you to run your operational business, establish tactical and strategic aggregate S&OP for demand forecasting and inventory optimization and also have a system to be able to respond and react to S&OP level events as they occur. Kinaxis is unique in that it can handle all of this planning, using a single data model with all planning applications dynamically linked and generating ‘what-if’ scenarios to consider unplanned events, establish a corrective action and then commit the response back to the operational business model.

 

Want to learn more about S&OP in the now? You can see my full presentation here, or ask me a question in the comments section below!

The post Sales and Operations Planning (S&OP) in the NOW, is happening NOW! appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Matt Benson at http://blog.kinaxis.com/2015/06/sop-in-the-now-is-happening-now/

by Carol McIntosh

Connecting the dots like in the game Simon is step three to stage five SCP SORStep Three – Connecting the Dots

How many of you are familiar with the game Simon? While Simon is really a memory game, what I really want to emphasize is that it is unpredictable. You start by pressing on one color and with every selection you are presented with a random sequence of colors that you must remember and repeat. It is random; not sequential and your decisions have to be made quickly as the game speeds up at every turn. It is just like your supply chain.

 

So how do you manage an integrated supply chain when you don’t know the sequence of events from day-to-day and any decision you make can impact your next action and also others in the organization?

 

I like to call this ‘Connecting the Dots’.

 

I remember starting in supply chain many years ago in procurement, negotiating pricing and managing suppliers. At the beginning, about a month after I had placed a large purchase order I was approached by accounting. It turns out that the supplier didn’t acknowledge the price and invoiced differently than the purchase order. This is one example of many accounting issues that we all know can occur but it taught me very early that everything I do can potentially impact some other part of the business and often you find out much later, often too late.

 

Have you ever made a bad decision?

 

How many of you have made quick decisions on meeting forecasts only to find out that you lost a good part of your margin on expedited freight, overtime and premium material costs?

 

Connecting the dots is very important for a SCP SOR because everything is related to cause and effect – understanding the impact of your decisions before you execute.

 

The siloed approach

 

This is where the traditional SCP SOR vendors have failed. Many organizations are working with the siloed approach with separately integrated modules. The concept of demand understanding how they have impacted supply or vice versa is unheard of.

 

How to achieve transparency

 

Achieving transparency within and outside your four walls is going to require the following:

 

  •  A truly integrated system where you have everyone working with the same data and the moment someone pulls a lever it is possible to identify everyone affected and alert them to any risk or opportunity.
  • Full representation of the supply chain in one system. This includes your vertical and horizontal supply chain, including key suppliers.
  • Speed of information. If the data is not recalculating fast enough users will revert back to old means, that typically being their favorite personal productivity tool “Excel” which is often the risky backbone for many mission critical supply chain processes.
  • How common is it for you to know all the people in your supply chain that you affect or that affect you? The SCP SOR must be intelligent enough to help you connect with the right people and facilitate collaboration. Technology is an enabler to making the best decisions. People, and human judgement will always be required.
  • Flow of data to and from the ERP data source. The data must flow to the SCP SOR and any planning changes need to flow back to the ERP for timely execution

In the next blog I will speak more about collaboration. Look for Step Four to Stage Five SCP SOR ‘Collaborative Management’.

 

The post Step Three: Stage Five Supply Chain Planning System of Record (SCP SOR) appeared first on The 21st Century Supply Chain.

 

 

Originally posted by Carol McIntosh at http://blog.kinaxis.com/2015/06/step-three-stage-five-supply-chain-planning-system-of-record-scp-sor/

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