1 2 3 Previous Next

21st Century Supply Chain

888 posts
by Bob Ferrari

hand touching touch pad, social media conceptThe following guest blog commentary is contributed by Bob Ferrari, Founder and Executive Editor of the Supply Chain Matters blog and Managing Director of the Ferrari Consulting and Research Group LLC.


In March of 2011, I had the opportunity to join fellow supply chain management bloggers Trevor Miles and Lora Cecere in a Kinaxis sponsored thought-leadership webcast focusing on the potential of the social supply chain. The concept of the social supply chain was relatively new, not well understood, and lacking many specific examples to cite. The closest context was one articulated by noted IT author Geoffrey Moore, who labeled the term “systems of engagement”. Back then, supply chain organizations were becoming aware of Facebook and Twitter, but not in the context of business. Many businesses were banning the use of social media on work premises.


Yet, we all believed that the potential leveraging of social media tools in demand, supply and risk management elements of supply chain business processes had enormous potential. I noted in a Supply Chain Expert Community posting at the time that: “social concepts do not equate to endless 120 character streams of unrelated or broadcasted information, but rather a context to a business process need.”


Indeed, four years later, after much market education and early adopter successes, leveraging social supply chain applications to enhance business processes has far more meaning and applied uses. The notion of social tools as mechanisms for matching people possessing respective skills, expertise, and knowledge with specific internal or external process and decision-making needs has more meaning and application. That is especially pertinent to today’s reality of increasingly complex and fast moving globally based supply chain networks.


It is about tapping the expertise and power of the extended supply chain network.


Consider some specific supply chain challenges:


  • Extending the methodology, knowledge and discipline of sales and operations planning (S&OP) across the extended supply chain network.
  • Collapsing the functional silos to establish an end-to-end planning perspective and enable cross-functional decision-making.
  • Gaining earlier warning on potential supplier problems.
  • Determining if certain products are experiencing extraordinary quality problems on a near real-time basis.
  • Acquiring daily feedback as to how customers are responding to a recent new product launch and the impact this response will have on existing supply plans.
  • Obtaining insights as to what is happening at the source when major supply chain disruption occurs and existing IT systems communication channels are temporarily unavailable.

Many leading-edge supply chain organizations such as Barnes and Noble, Cisco, Procter & Gamble, Volkswagen, Wal-Mart and others have since addressed such supply chain process challenges utilizing social methods. Cross-industry educational organizations such as the Supply Chain Risk Leadership Council (SCRLC) have highlighted council member efforts in the effective application of social supply chain methods in addressing various aspects of supply chain risk management and mitigation. Similarly, the Council of Supply Chain Management Professionals (CSCMP) has featured learning and education on supply chain organizational initiatives leveraging social tools. Such learning has acknowledged that social methods can present a slippery slope, but corporations can benefit in many ways by supplementing existing processes with effectively applied social-based strategies addressing supply chain business and decision-making processes.


A further influence rests with millennials and new graduates, the future leaders of tomorrow’s supply chain organizations. They are quite comfortable and adroit in the use of social-based systems for extended communication and team-based interaction. They are becoming influencers and innovators of change.


On the technology front, various vendors have since helped in addressing a number of the concerns initially raised with the application and deployment of social based tools. Organizations can now take advantage of internal, private, and public cloud networks for hosting and deploying social applications. Supply chain planning, procurement, business network collaboration and fulfillment application software providers are augmenting their application software offerings to include embedded social tools that allow individuals and extended teams to socially interact in business processes, knowledge networks and supply chain focused forums within the application stack. Available information is not just structured, but more often unstructured in communication streams and knowledge transfer.


Like all important initiatives, the overall goal is always not the technology itself but rather the business and cross-functional challenges and objectives needing to be addressed and resolved in a far more rapid manner.


The reality of today’s industry supply chains is one of extended value-chain networks that are made-up of internal, and often externally based organizations and teams. Information, knowledge and team interaction are more externally focused.


Noted supply chain management academic, thought leader and author John Gattorna has dedicated 40 years to the study and written articulation of supply chain management processes. His most recent work was titled Dynamic Supply Chains: How to Design, Build and Manage People-Centric Value Networks. That title indeed reflects the rapidly changing reality of the power of people-centric networks. The opportunity to leverage teams of individuals is indeed the opportunity for addressing how difficult and challenging problems are tackled and solved in a near real-time manner.


Social based supply chain methods remain as the opportunities to tap the power of many.


Is your organization taking the opportunity to leverage social methods?

The post Tapping the Power of Many- The Application of Social Enabled Supply Chain Processes appeared first on The 21st Century Supply Chain.



Originally posted by Bob Ferrari at http://blog.kinaxis.com/2015/08/tapping-the-power-of-many-the-application-of-social-enabled-supply-chain-processes/

by Lori Smith

Can the S&OP process be done without technology?


The answer to that question has certainly evolved over the years, and while there are still some holdouts, most will now agree that technology is indeed required. Whether its objective should be to support the process or help define the process remains a healthy debate.


Fundamentally, the more complex the organization and the more mature the process, the greater the need for technology. So what technologies are today’s supply chain teams using to support the critical S&OP process? Amazingly, it seems most organizations are running their process with spreadsheets.


It never ceases to surprise me when I hear how many enterprises entrust a mission-critical task to the desktop spreadsheet software Excel®. On the other hand, the fact that so many turn to Excel is proof that despite the plentitude of systems (or perhaps because of it), existing ERP and legacy planning apps are not meeting the requirements for S&OP processes regardless of where that process is positioned on the maturity curve.


Consider the Supply Chain Insights report, Research in Review (Nov 2014), that states:


“Many companies have five to 30 Enterprise Resource Planning systems and two to three supply chain planning systems. In addition, companies will have two to five S&OP processes working independently.”


This demonstrates an enormous level of complexity, from both a process and data perspective.


So what’s wrong with Excel? It’s a great tool for personal productivity. And it’s helpful for department-level planning and budgeting. But spreadsheets can’t scale up to support the rigorous, multi-tier decision-making that S&OP requires. For example, with Excel you can’t easily:


  • Integrate information from many sources
  • Provide in-depth analysis using complex analytics
  • Simulate numerous “what-if” scenarios
  • Support reliable data quality and secure data exchange

These observations are supported in the same Supply Chain Insights report I referenced above:


“Today’s S&OP process needs to be modeled using technologies that recognize constraints and bottlenecks and can model volatility and demand/supply probabilities. The supply chain of today is just too complex to be modeled in a spreadsheet.”


So, if organizations are not able to do the analysis they need using spreadsheets, then you have to ask yourself why is it so prevalent?


I believe it is because supply chain teams are ill-equipped to support their S&OP process using their ERP systems. The multi-million dollar ERP system does all the essential jobs it was designed for: taking, making, shipping and accounting for customer orders. But it’s tough to get to the next level of S&OP using ERP and a collection of add-on modules or other advanced planning systems. In most cases, each piece is a stand-alone product designed for just one part of the process. The integration effort is cumbersome.


This piece-process approach has proven to lead to ineffective and inefficient planning cycles that drive less than maximized value for the organization, largely because it does not adequately address cross-functional (and cross-enterprise) issues or concurrent activities.


Here’s how the design of ERP systems compares to S&OP requirements:




As you can see, ERP and the associated legacy supply chain planning solutions were originally designed for a much slower, more centralized world, so they struggle to support today’s requirements for intense participation from multiple players in different locations using different systems.


Here are four critical limitations of legacy planning systems when it comes to S&OP:


  1. Inaccurate forecasts based on statistical forecasting that can’t keep up with volatile markets and ever-changing business assumptions
  2. Slow and limited “what-if” simulations to test assumptions and alternative actions
  3. Limited collaboration support to bring teams together, either planned or ad hoc, to provide input and secure buy-in
  4. No accounting for outside value, such as inventory being purchased, assembled or shipped by third parties

If you’re not using Excel, your ERP system or legacy applications to manage your S&OP process, you are likely using a purpose-built S&OP tool. If that’s the case, it’s important to understand that these tools


primarily focus on an aggregated view of demand and a static and high-level representation of supply. At best, supply constraints are determined using rough cut capacity planning where only key constraints are included. In some cases, key or constrained materials are considered. Further, timing and interactions of those key constraints are ballpark estimates at best. The true impact and/or feasibility of the plan isn’t actually known until after the S&OP plan is disaggregated down to the MPS.


To have the most effective S&OP process, you need to link ‘cause’ to ‘effect’, which can only be achieved by having a complete representation of your supply chain – from the highest level demand signal (e.g. product family forecast) to the very lowest level raw material component – in one system!


 cover shot of the S&OP in the 21st Century ebookS&OP in the 21st CenturyAs the S&OP process continues to evolve and mature, a different interpretation and expectation for S&OP is emerging that entails better, broader goals. This recently published eBook elaborates on the evolving horizontal S&OP process capabilities that are required in order to achieve a transformation. Download your own copy here.

The post Excel, ERP and Legacy Apps, Oh My! What Technology is Supporting Your S&OP Process? appeared first on The 21st Century Supply Chain.



Originally posted by Lori Smith at http://blog.kinaxis.com/2015/08/excel-erp-and-legacy-apps-oh-my-what-technology-is-supporting-your-sop-process/

by Alexa Cheater

Dominic ThomasMoving along with our ‘Learn from the Masters’ series, which features answers to your burning supply chain-related questions from our talented business consultants, we bring you the newbie – Dominic Thomas. Dominic has only been with Kinaxis a few short months, but he’s no slouch in the supply chain field, with more than 20 years experience!


How did you come to find yourself in a supply chain software business consultant role – what was your path to here?
I applied for a co-op job in university in which the description said “opportunity to travel”. A few years and several software implementations later, I switched over to business consulting and have done this ever since.


What’s the biggest lesson about supply chain management you’ve learned?
After being in this business for 20 years, I know that developing the “perfect” plan is a fruitless exercise. Supply chains are getting more complex, competition is increasing and consumers are becoming more demanding. The only certainties in life are death, taxes and that (supply chain) plans change all the time. Responding to these changes in a timely way is what matters.


What advice would you give to anyone considering a career in supply chain?
It’s a fascinating area to focus on. The supply chain matters! It delivers things that you and your family use every single day. Learning about it and being creative in your approach to problem solving can be very rewarding.


If you had to name three priorities for a company looking to evolve their supply chain processes, what would they be?


  1. Strategic:
    • Understand what your strengths, and more importantly your weaknesses, are from a supply chain perspective. Determine where your organization is headed and set your strategy. Develop quantifiable goals that support the overall strategy.
  2. Tactical:
    • Hire good people and allow them to do what they do best. Support them with the right technologies (supply chain software) so that they don’t need to do unnatural acts to be successful.
  3. Execution:
    • Measure them and reward them when they achieve their goals.

If you could change your job title to a comic or superhero name that would aptly describe what you do, what name would you give yourself?
I have no idea! Will I be able to get away with that? Perhaps my esteemed colleagues will give me one at some point.


What’s the one app on your phone that you can’t live without?
Can I have two? Google maps and Words with Friends.




The post Learn from the Supply Chain Masters – Q&A with Dominic Thomas appeared first on The 21st Century Supply Chain.



Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/08/learn-from-the-supply-chain-masters-qa-with-dominic-thomas/

by Alexa Cheater

supply chain poetry bookYes, you read that title right. In honor of Bad Poetry Day I asked my colleagues to send me their best (and worst!) supply chain-related sonnets, odes, limericks, haikus – well you get the point. It turns out I work with quite a creative crowd.


Now keep in mind this is BAD poetry day. So if you’re looking for Shakespeare quality prose, I suggest you just keep on looking. Without further ado, enjoy these supply chain poems written by Kinaxis staff just for you!




An Ode to Supply Chains
By Alexa Cheater


O supply chain, how I do appreciate thee,
always working hard to bring things to me.


From raw goods to finished, and everything in-between,
your complexities are many, especially when you’re lean.


Don’t let anyone dismiss you or belittle your worth,
because without you supply chain, nothing could ever circumvent the Earth!




Supply Chain on the Brain
By Lori Smith


I’ve got supply chain on the brain
I’m trying to stay sane
Amid my supply-demand pain
I don’t want to plan in vain
So I need to refrain
From forcing only one lane
Go against the grain
The key is to bend and change
Flexibility without strain
Old supply chain models slained!
My determination will not wane




Carl I
By Maddy Knuth


Carl was an Inventory Manager
Who knew he was better than amateur.


So he suggested RapidResponse,
To see the metrics he wants,
And now he can reset parameters.




Carl II
By Aswin Aristama


PLANning to reduce inventory by 10%,
Carl, the inventory manager, DOes it using RapidResponse.


CHECKing on the status of the inventory reduction,
His boss is impressed by Carl’s ACTions, so he says,


“Carl, thanks for your rapid response!”




Laments of a Master Scheduler
By Taunya MacDonald


Orders come in, supply goes out.
Not enough here, too much there, all around me they shout.


A Master Scheduler I am and not a friend I can make.
A better solution I need, oh for goodness sake!


But alas what is this? A hero is on the way!
It’s RapidResponse come to save the day!


I could do this, I could do that.
Create scenarios and compare, it’s done in seconds flat.


So things have changed, and everything is great.
Ask me your questions, my answers are never late!


RapidResponse lets me know sooner, act faster, that’s what it’s all about.
Now work is done let’s go for beers, I’ve got friends and we are heading out.




Excerpt from “The tragedy of the Inventory Planner, prince of Warehousemark”, Act III
By Alvaro Fernandez


To stock, or not to stock, that is the question:
Whether ’tis Planner in the mind to suffer
The slings and arrows of outrageous forecasts,
Or to take charts against a sea of wastes,
and by responding end them: to hide, to grieve
no more; and on the cheap, to say we end
the headache, and the casual stock-out




The Rise of the Inventory Planner
By Andrew Dunbar


O’ Inventory planner; thy reactive ways
Cause grief and suffering to
Finance and customers alike.
When in disgrace in fortune and men’s eyes1
Tis of importance to remind thyself that
‘I am the master of my fate’2


Arm thyself with the tools of the trade;
Dashboard metrics and scorecards: combine.
Once inventory forecasts and plans are laid
To err is human; to Rapidly Respond, devine! 3


1 – Shakespeare
2 – W.E. Henley
3 – A. Pope




A Wicked Good Limerick


By Kerry Currier


There once was an Inventory Manager from Boston
Who needed some excess from Austin
With Rapid Response he could see a great transfer opportunity
Shipping was all that it cost him




Scenario Hindsight
By Steve McStravick


Inventory Low,
Supplier lead-time too long,
Should have used “What ifs”.




RapidResponse Haikus
By Karen Morrison


System requirements changes for users


Requirements change.
No IE seven or eight.
No Java seven.


Display a profile picture


Upload a picture.
It appears in messages
And on your contact card.


Find resources using global resource tags


Can apply blue global tags
To shared resources.


Scenarios no longer need unique names


Your scenarios
Do not need unique names now.
See the release notes.


Reorder columns in a worksheet


Rearrange columns
In any type of worksheet
Except for crosstab.


Drill to a form


With a single click”
You can open a form now
From a worksheet link.


Workbook command logging and enhancements


Errors might occur
But commands can still proceed.
The results are logged.


Enhanced collaboration with contact cards


Click a contact card
To share a scenario
Or send a message.


Run a command to open a form


On workbook toolbars
Custom buttons can launch forms.
Commands button, too.


Dynamic forms


Forms might give feedback
And hide or deactivate
Irrelevant fields.


Send links to forms


Now, send links to forms.
Help colleagues to complete tasks –
Link the form they need.


Using key fields in a table to customize filters


Tables can now have
Many key fields. For filters,
Choose the one you want.




By Joe Cannata


Kinaxis you’re fast
Our business is growing
The woes in the past
Big profits are flowing


Supplies on the move
We respond right away
Production does groove
IT leads the way


Oh RapidResponse
You so fill our need
Our profits are up
Shareholders succeed


We’re stronger each day
Your data we use
To reshape the way
Our brand does not lose




Missed Deliveries
By Susan O’Loughlin


Blizzard on East Coast
Planes are grounded on tarmac
No Christmas presents




The Transformation
By Emily Fisk


There once was a man named Manning
Who performed Sales & Operations Planning.
He lacked the support and information required, so sadly
He performed it very badly.


He worked in a silo without anyone with whom to collaborate
Without help, many problems he did exacerbate.
Spending his days frustrated, fighting fire after fire,
He couldn’t wait until the day he could retire.


On a bright sunny day, he stumbled upon RapidResponse
The answer to his prayers, the eliminator of nonchalance
All supply chain information and simulation in one place?!
Silos and fires disappeared without a trace


While supply chain disruptions still happen on a daily basis
Reaction to change resembles a state of homeostasis
Now the days of Sales & Operations Planning
Are infinitely better for the man named Manning




The post A Collection of Bad Supply Chain Poems appeared first on The 21st Century Supply Chain.



Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/08/a-collection-of-bad-supply-chain-poems/

by Lori Smith

Sales and Operations Planning (S&OP) has been around for a long time. It’s been called “old hat” and “the new kid on the block.” Both are true. And despite having been around for decades, S&OP continues to gain momentum and grow in maturity.


Most of us in the supply chain industry have a conceptual and common understanding of what S&OP represents, however the variety of ways in which S&OP is executed demonstrates that it can mean very different things to different organizations.


A typical/traditional Sales and Operations Planning (S&OP) process is primarily:


  • Operations led
  • Mainly focused on satisfying revenue and margin goals
  • Aimed at attempting to meet a forecast for a discrete planning horizon, usually 6-24 months
  • Sequential and involves isolated planning activities consolidated at a high level and then pushed up to management for approval, and pushed down to manufacturing for execution

And most experts agree that S&OP has four ingredients:


  • People: the cross-functional teams involved
  • Process: the way you make decisions and manage meetings
  • Information: the data from your demand and supply chain
  • Technology: the systems that support planning and decision-making

Not everyone agrees on the correct proportions of these ingredients, but everyone agrees that S&OP needs all four. Knowing exactly what is required for each of these areas, and potentially most importantly, finding the right balance between them is the key to effective and efficient planning cycles that drive maximized value for the enterprise.


When defining S&OP, it’s also important to look at S&OP Maturity Curves. A maturity model is like a staircase that describes how companies manage a certain area of their business. The lowest step is usually sporadic and disorganized, while each step up becomes more organized and effective. These models allow us to quickly measure how we’re doing in a specific area and point the way up to the next level.


Numerous maturity models have been developed for S&OP. Most are variations of the same theme, with four or five stages from immature to mature. For example, Gartner calls these stages React, Anticipate, Integrate, Collaborate, and Orchestrate.


Here’s a typical model, based on the approach of Larry Lapide from MIT:


A Four-Stage S&OP Maturity Model


The bad news is that most companies are stuck at stages 1 or 2. Of course, no company is a monolith – different divisions may be more or less mature at S&OP and companies can even lurch ahead and then fall back due to a merger or acquisition, a failed project, or resistance to change.


Regardless, not putting a focus on S&OP can make a big difference within your company. As one example, Aberdeen Group classifies 30% of all companies as laggards in terms of the maturity of their S&OP processes. These organizations suffer from:


  • Lower customer service (79% of orders on-time vs. 95% for best-in-class competitors)
  • Inaccurate forecasts (accuracy of 25% vs. 86%)
  • Poor ROI (cash conversion cycle of 85 vs. 46 days)

On the flip side, companies that improve their S&OP to best-in-class levels can achieve:


Ultimately, S&OP should be about piloting your daily operations and monthly plans toward your long-term business goals. It’s about getting everyone headed in the same direction – including your contract manufacturers, suppliers, distribution partners, and customers.


 cover shot of the S&OP in the 21st Century ebookS&OP in the 21st CenturyAs the S&OP process continues to evolve and mature, a different interpretation and expectation for S&OP is emerging that entails better, broader goals. This recently published eBook elaborates on the evolving horizontal S&OP process capabilities that are required in order to achieve a transformation. Download your own copy here.

The post Tackling Life’s Big Questions… What is S&OP appeared first on The 21st Century Supply Chain.



Originally posted by Lori Smith at http://blog.kinaxis.com/2015/08/tackling-lifes-big-questions-what-is-sop/

by Alexa Cheater

Bill RiordanThe next victim err… I mean willing participant in our ‘Learn from the Masters’ series, which features answers to your burning supply chain-related questions from our talented business consultants, is Bill Riordan. Bill has been with Kinaxis just over a year.


How did you come to find yourself in a supply chain software business consultant role – what was your path to here?
Probably like most of us in the BC role, we didn’t start out looking to become supply chain BCs. In fact, for many of us who’ve been around a while, the term supply chain hadn’t even been coined yet. I started out working with and developing plant floor manufacturing and controls systems, so that was my introduction to a part of the “supply chain”. I really enjoyed both the challenge of understanding and managing the dynamics of a supply chain, as well as the software technologies of the solutions that were being developed to address the challenges of the supply chain. Fast forward through a handful of really interesting technology companies which addressed different parts of the supply chain problem, and here I am.


What’s the biggest lesson about supply chain management you’ve learned?
You’ll never develop the perfect plan. Or, if you do, it’s good for about a second. The best supply chains are those that do a good job of anticipating what’s going to happen while at the same time having the ability to adjust when things (inevitably) change.


What advice would you give to anyone considering a career in supply chain?
Like any career, make sure you like what you do first and foremost. Supply chain isn’t sexy, but it matters and it makes a difference to a company’s performance. And, it offers an array of challenges from technology to organization to pure creative problem solving.


If you had to name three priorities for a company looking to evolve their supply chain processes, what would they be?


  1. Make the ‘project’ a priority and give it the attention it needs.
  2. Put your best people on it. I’ve seen many failed projects because they we’re staffed with ‘available’ resources. Never works.
  3. Tie the success of the project to realistic, measurable business goals (revenue, margin, service level, share, etc.).

If you could change your job title to a comic or superhero name that would aptly describe what you do, what name would you give yourself?
Pixelator – because I use screen projections of PowerPoint and demos to show how wonderful our prospect’s futures will look with RapidReponse.


What’s the one app on your phone that you can’t live without?
RiffMaster Pro. I’m trying to learn to play the guitar like Bill Dubois (which is forever unlikely). But this app allows me to slow down music to 1/8 of the regular speed so at least I can get through a song. Tough to dance to, which is why you won’t see me playing the clubs anytime soon.




The post Learn from the Supply Chain Masters – Q&A with Bill Riordan appeared first on The 21st Century Supply Chain.



Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/08/learn-from-the-supply-chain-masters-qa-with-bill-riordan/

by Kirsten Watson

leading change, shared vision, empowering people - all good examples of a strong supply chain leaderWhen considering what attributes supply chain leaders are most likely to possess, it’s easy to think first of hard skills—analytical prowess, technology expertise, and operations and economics knowledge quickly come to mind. But while hard skills may land you a job, many times it’s your soft skills that will keep you there—and accelerate your climb up the corporate ladder. So what attributes from both areas are today’s supply chain leaders most likely to possess?


The APICS Supply Chain Council set out to answer this question in its latest industry report entitled “Supply Chain Leadership Report: Many Styles Generate Success.” The findings were generated from multiple sources, including surveys of APICS members, articles, and external research. With the goal to share a professional capabilities blueprint for current and future supply chain leaders, the report explores pivotal features of a successful supply chain leader, including his or her attributes, leadership style and ability to formally and informally influence an array of stakeholders.


With its focused research of supply chain and operations management professionals across multiple industries and management levels, APICS pinpointed these core themes for successful supply chain leadership:


  • Applying certainty to uncertain situations affecting others, such as in forecasting or decision making
  • Balancing risk and reward in careful analysis using hard and soft skills
  • Aligning tactics to strategy in planning and harmony with organizational culture
  • Maintaining and improving relationships of supply chain partners
  • Satisfying competing priorities and stakeholders on an ongoing basis

Let’s take a closer look at why these skills have undoubtedly earned relevance in today’s supply chain management industry.


Applying certainty to uncertain situations affecting others, such as in forecasting or decision making—There’s no doubt that volatility in the supply chain has become the norm. In the past, supply chain management was based largely on the notion that the best predictor of future events is historical events. Events of the past ten years tell us that unpredictability is here to stay, driven largely by economic fluctuations, increasingly demanding consumers, expanding regulatory concerns, and supplier instability. In this climate, forecasting, budgeting, business planning and other processes must be conducted by practitioners who are comfortable dealing with ambiguity (and we would argue, those who are smart enough to implement technology that removes guesswork).


Balancing risk and reward in careful analysis using hard and soft skills—The word “analysis,” especially in a supply chain context, often implies crunching numbers to arrive at a decision. But that volatility mentioned above requires supply chain leaders to think imaginatively—seeing the big picture without becoming mired in a mountain of data. As supply chain management rightly emerges as an increasingly strategic function within the enterprise, the demand for high-level problem-solving skills among executives, managers, and practitioners will escalate accordingly.


Aligning tactics to strategy in planning and harmony with organizational culture—Even great supply chain strategy is rendered meaningless if you fail to execute a supporting tactical operations plan. Connecting strategic supply chain imperatives—that align with overall company objectives—to a tactical management system necessitates the establishment of meticulous metrics. A supply chain leader must be able to continuously monitor these metrics to determine if productivity, quality, inventory, and other tactical objectives are being met, exceeded, or missed. And, this activity can’t take place in a vacuum. Today’s increasingly collaborative enterprise requires supply chain professionals to work closely with finance, sales, IT, and other departments to ensure company-wide success.


Maintaining and improving relationships of supply chain partners—Those collaborative skills I just mentioned don’t just apply within the four walls of the enterprise. Cultivating mutually beneficial connections with supply chain partners requires both an in-depth understanding of the business operations as well as an innate talent for relationship building. These skills for supply chain leaders have only grown in importance in recent years. After many suppliers went out of business during the last economic downturn, those who emerged from the rubble face tremendous pressure to perform in a continuously evolving business landscape. Supply chain executives must carefully nurture effective supplier relationships to ensure a sustainable business and operational model.


Satisfying competing priorities and stakeholders on an ongoing basis—Conflicting objectives within the supply chain have escalated in recent years as internal and external pressures to both reduce costs and increase service levels have intensified. The purchasing department looks to keep volume requirements steady, maintain relatively large quantities, and ensure flexible delivery times. Manufacturing strives to maintain high quality and productivity while keeping production costs low. And, customers expect vast product variety and quantities, short order lead times, and low prices. Managing these competing priorities and the expectations of key stakeholders requires supply chain leaders to have a tenacious management approach blended with a sophisticated communication style.


In addition to these skills, APICS’ research identified seven core competencies of an effective leader to be someone who:


  • Creates and communicates a vision
  • Promotes and brings about change
  • Builds partnerships
  • Captures and acts on insightful information
  • Seizes and creates opportunity at the right place and time
  • Consistently models honorable behavior and best practices
  • Serves the best interests of the organization without being self-serving

What are the most valuable qualities of a supply chain leader in your organization? Are there any attributes you would add to the list? Let us know in the comments!

The post What Qualities Make the Best Supply Chain Leaders? appeared first on The 21st Century Supply Chain.



Originally posted by Kirsten Watson at http://blog.kinaxis.com/2015/08/what-qualities-make-the-best-supply-chain-leaders/

by Alexa Cheater

A farmer represents part of the agricultur supply chainI used to think slavery was, for the most part, a thing of the past. An abhorrent practice that was abolished for very good reason, and a constant reminder that human life has tremendous value and as such should be respected and honored. I used to think there was no way slavery would ever have a place in modern society, that no one would allow such a practice to exist outside the most desolate and desperate places on Earth. I used to have my head buried in the sand.


The sad reality is that slavery, in all its unpleasant forms, exists much closer to home and in much greater numbers than I ever expected. Traces of it can be found virtually everywhere. In the clothes on your back, the shoes on your feet, the food that you eat, and even the computer, tablet or smartphone you’re likely reading this blog on. How? Through the supply chain.


Modern slavery is one of the supply chain industry’s dirty little secrets, but thankfully, governments in the US and UK are attempting to wash it clean, working to put a stop to a problem that should never have been allowed to exist in the first place. Or at least, they’re trying to.


As the Wall Street Journal (WSJ) reports, new rules recently announced by British lawmakers will require companies “to give an annual disclosure detailing efforts to root out slavery and human trafficking in their global supply chains.” The new provision, which is part of the broader Modern Slavery Act enacted in March, will impact more than 12,000 UK companies whose global revenues each total more than 36 million pounds. It’s based on California’s Transparency in Supply Chains Act, which was passed in 2010.


The problem is, both laws only require companies to disclose their use of slave labor, not actually put an end to it. So how is this going to solve the supply chain slavery issue?


The WSJ cites a statement made by Britain’s Home Secretary Theresa May, in which she says the new law will provide a “strong incentive” for companies to take action, allowing “investors, consumers and the general public to decide who they should and should not do business with.” I question how many will actually take the time to read all 12,000+ statements to determine who is and who isn’t using slave labor.


In a related article by the Guardian, David Noble, chief executive of the Chartered Institute of Procurement & Supply, points out just how pervasive this issue is, saying 11% of British business leaders report modern slavery likely already plays a role in their supply chains.


The British Standards Institution (BSI) has also raised the alarm regarding slavery in the supply chain, releasing a new Risk Index Report identifying China, India, Vietnam, Bangladesh and Myanmar as the five highest risk countries for human rights violations.


According to a Forbes article, “These countries account for 48% of global apparel production, 53% of global apparel exports and 26% of global electronics exports – making it very clear which are the industry sectors most likely to be at risk.”


Forbes quotes Courtney Foster, Supply Chain Solutions Manager EMEA at BSI Group as saying, “Consumers do not accept ignorance as an excuse in today’s age. Brands need to find ways of obtaining supply chain intelligence in areas such as ethical, environmental and human rights by using industry designed pre-qualification frameworks and information tools.” That’s something I’ve discussed in the past and wholeheartedly agree with.


Mike Bailey, EMEA Director of Professional Services at BSI also told Forbes, “Some organizations underestimate the damage that can be caused by not adopting and enforcing ethical practices across their supply chain. Command and control from the center means nothing if it is not rigorously monitored and enforced. For too long, extended supply chains have obscured ethically questionable practices.”


Across the pond, US Representatives Carolyn Maloney and Chris Smith are also now wading into the fray, introducing the Business Supply Chain Transparency on Trafficking and Slavery Act of 2015, which requires public companies with over $100 million in global gross receipts to publicly disclose any measures to prevent human trafficking, slavery and child labor in their supply chains.


In a statement, Smith said, “Some companies may participate knowingly in human trafficking to pad the bottom line; others are willfully ignorant of where and how their inexpensive products are made; and still others simply do not know.”


The introduction of that bill followed the release of the US State Department’s Trafficking in Persons Report 2015, which upgraded Cuba and Malaysia’s status but left Thailand at the lowest level after it received a downgrade last year. The WSJ says, “Governments in the lowest tier could see the US government withhold non-humanitarian, non-trade-related foreign assistance. These countries could also see the US oppose giving them aid through international financial institutions like the World Bank.”


In an announcement of the report results, US Secretary of State John Kerry pointed to an article the New York Times about a Cambodia boy who found himself held by armed men and pressed into service on the sea, shackled by neck to a boat, saying, “If that isn’t slavery and imprisonment, I don’t know what is.”


The Associated Press has compiled parts of Kerry’s speech into a video clip, where he discusses how this has become a “battle against evil.” I couldn’t agree more.


So then, what can be done to tackle modern slavery in supply chains? The Walk Free Foundation, an organization attempting to end contemporary slavery and human trafficking, has published a very informative guide on this very topic, Tackling Modern Slavery in Supply Chains. It provides some great insight and tools on how to effectively evaluate your supply chain.


The post Modern Slavery in Today’s Supply Chains appeared first on The 21st Century Supply Chain.



Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/08/modern-slavery-in-todays-supply-chains/

by Alexa Cheater

Hans VelthusizenA look at the roster of Kinaxis employees reveals an incredible depth of supply chain talent, knowledge and experience. We thought we’d tap into that wisdom pool by sitting down to gather industry insight from members of an elite group who are entrenched in the pitfalls and successes of supply chain management on a daily basis – our very talented business consultants. For the next few weeks we’ll be featuring answers from these supply chain gurus – some shrewd, some sarcastic and some just off the wall silly!


First up, Hans Velthuizen. Hans has been a business consultant with Kinaxis for more than three years, and is based out of the Netherlands. Yes, he does like tulips!


How did you come to find yourself in a supply chain software business consultant role – what was your path to here?
I wanted to become a lorry driver, moving goods from A to B, but it took me too long to get a drivers’ license.


Okay, so actually I studied Distribution Management and always wanted to travel. I became a business consultant immediately after my studies. I never found the urge to change my role since I think I have one of the best jobs ever. There’s never a dull moment.”


What’s the biggest lesson about supply chain management you’ve learned?
It’s all about teamwork, but only one out of five project members is a team player.


What advice would you give to anyone considering a career in supply chain?


  1. Make sure you get many different insights in the beginning of your career. Look for a job that allows frequent task rotations, like doing a project in demand planning, then procurement, then operational excellence, etc. (a business consultant role is a good example as you will see many different companies with even more supply chain challenges)
  2. Look for innovative companies and try to be part of them, this way you will learn the most.

If you had to name three priorities for a company looking to evolve their supply chain processes, what would they be?


  1. Plan
  2. Monitor
  3. Respond

If you could change your job title to a comic or superhero name that would aptly describe what you do, what name would you give yourself?
Regarding comics or superheroes, that is a typical North American phenomenon and it’s difficult to find a European one. When I think of one it’s Hans Brinker (although he is actually an American creation), the Dutch boy who put his finger in the leaking **** to save the low lands from flooding. His decisive action saved many lives and is a good example of rapidly responsive action.


What’s the one app on your phone that you can’t live without?
The health check app.




The post Learn from the Supply Chain Masters – Q&A with Hans Velthuizen appeared first on The 21st Century Supply Chain.



Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/08/learn-from-the-supply-chain-masters-qa-with-hans-velthuizen/

by Lori Smith

Ready for a bit of a rant? I may not be a Jon Stewart or a Dennis Miller, but I just have to share my thoughts on something. I feel like the supply chain industry is at a roadblock. The concept of managing the value chain end-to-end is pervasive, yet the understanding of what’s fundamentally needed to get there still has a way to go. There is too much talk about data integration and not enough about process integration. The industry talks about capabilities in isolation, yet the value is in the combination of them. Too many speak about bringing functions together when they should be talking about running them as one. We want the whole, but we think we can get there by putting disparate pieces together.


It reminded me of the other day when I ate a whole bunch of chocolate truffles. I’m just sick over it. I was in a candy store and there was this neat row of lovely looking truffles. They looked just right… and the description said all the right things. For sure they would satisfy my sweet tooth! So I went to buy one. The candy clerk told me that for the craving I had, I really needed four or five truffles together. And so I bought the whole bunch… it cost a lot more than I had wanted to spend. I also had to wait for longer than I expected as the clerk struggled to arrange all the truffles in a box that they didn’t really fit in. And then she loosely and awkwardly tied a ribbon around the whole thing… all of that came with an extra charge by the way. But finally, finally, I had my truffles and with great anticipation, I took a bite – YUCK!  It was not what I was expecting… it certainly wasn’t what I wanted… and it definitely left a bad taste in my mouth. I went back to the clerk and questioned if there was an error – she insisted that it must be something wrong with my taste buds, and instructed me to try another (though she did offer to custom make more at added cost and time). So I went back and tried the truffles again thinking that as I got accustom to them I would understand and appreciate how the flavors were supposed to work together, but over and over again I had the same sour experience, until finally I said ‘enough is enough’.


I want to buy one chocolate bar – one simple chocolate bar that was made with flavors that work together… that can quickly satisfy my craving… that doesn’t need to be all packaged up… and that I can get more when I want. Forget the ribbon and bows, I want to judge on the outcome (in this case, good taste and a satisfied sweet tooth).


So, yes, maybe I got off on a bit of a tangent, but not really. We value these same concepts in our software – we believe in combining capabilities and functions into one planning system of record that gives people the insight they need, the user experience they want, and that will work for them as they grow and change their business over time. Our customers have spoken to these, and other key tenets in some recent interviews. They have pushed through the roadblock.


There are several short clips available that I hope you’ll check out. Here are just a couple.




“We’ve been about five years down the journey, and we continue to evolve with the product, but we use it as our core. It’s core to our architecture. We are an SAP shop from a financial ERP system, but RapidResponse really is our planning system of record.”





“We needed a tool which [supports] end-to-end collaboration…a collaborative platform.”


The post Wrapping a Ribbon Around it Doesn’t Mean You Have Tied Things Together – The #1 Supply Chain Software Roadblock appeared first on The 21st Century Supply Chain.



Originally posted by Lori Smith at http://blog.kinaxis.com/2015/08/wrapping-a-ribbon-around-it-doesnt-mean-you-have-tied-things-together-the-1-supply-chain-software-roadblock/

by Agnes Rubaj

A man uses a social collaboration interface


I received a somewhat confusing email a few weeks ago – an invitation, from a colleague, for me to join Yammer. The invitation didn’t provide much information about why I should be joining, so naturally a few questions ran through my head. Why have I been invited? Is this related to a project? Am I supposed to know? Did I miss something at the last team meeting?


I bit and created a Yammer account thinking that these burning questions would be answered…not so much. After poking around the home page, which resembled my Facebook news feed, I went straight to the source – the person who invited me. Turns out my colleague had been invited by someone else, and then invited me to join along with a few other team members. Which got me thinking: should a mere invitation be the driver to adopting a new collaboration tool?  While Yammer certainly provides some intriguing features, for me the motivation just isn’t there – at least for the time being.


So what does this have to do with supply chain? Well, collaboration in a supply chain organization is essential to pretty much every role, from the customer service rep, to the demand planner, to the supply chain executive. And those are just the roles within the company. Supply chain organizations operate within global networks of external trading partners that require regular back and forth communication.


Social media aids collaboration within a business environment because it can help build trust and closely connect people from different roles, backgrounds, and locations across the globe. Many companies, in the supply chain space or not, are turning to enterprise social networking tools to influence collaboration and open communication throughout their departments. However, research shows that these tools are not getting as much traction as predicted and employees go back to relying on outdated collaboration methods, such as email, review meetings, and phone calls. One of the main cited causes is lack of business context.


This is due to the fact that enterprise social network tools are usually deployed independently of other widely used enterprise software systems meaning that key information is not integrated. Because these tools are not integrated with corporate processes they end up being too cumbersome to use and oftentimes cannot provide the right answers at the right time.


Imagine you are working away at a specific task that requires the assistance of another colleague. In a global organization with thousands of employees and thousands of external partner employees, how common is it for you to know every person whose actions might impact your job, and every person who you might affect? To determine who to work with, you must leave your current program, open another one, perhaps sign in, then try and figure out the most appropriate contact. Assuming you can identify who to work with, you then need to provide them with the information, the context, and the request in order to get their help. All of this activity will likely happen outside of the system from which you draw the data and execute the decision in. Not exactly the most efficient way to get your job done.


How do we simplify this process and make it more like a social network where information can easily be shared and collaborated upon? What is required for a successful implementation and integration of a social network in a supply chain organization?


As my colleague Carol put it, “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 opinion, there are some requirements that a supply chain planning system of record must possess in order to facilitate proper integration of social networking functions, including:


  1. An end-to-end integrated system that includes everyone you collaborate with, including customers and external suppliers = Everyone working in one place
  2. Cross-functional visibility into up-to-date data = Everyone working from the same data
  3. Ability to create copies of said data (what-if scenarios) to model various supply chain business problems = Analysis is purpose-driven based on specific events/goals
  4. Ability to share the what-if scenarios with anyone in the system = Collaboration happens in context and with a specific objective
  5. A way to connect people in the system to the processes and materials for which they are responsible, so that identifying who to work with can be done quickly and mid-task = The right people are brought together

Is your company struggling with an enterprise social network implementation? What do you think a potential solution could be to improve collaboration?

The post Collaboration and the making of a social supply chain appeared first on The 21st Century Supply Chain.



Originally posted by Agnes Rubaj at http://blog.kinaxis.com/2015/08/collaboration-and-the-making-of-a-social-supply-chain/

by Alexa Cheater

A group of millennials jump for joy. They have the purchasing power to change supply chains.It seems like everywhere I look I see mention of millennials, that ‘next generation’ who seems to be shaking things up in a big way. From the way companies do business to the products available on store shelves to the rising stars of the executive world, there’s no mistaking the millennial influence. That got me wondering, what kind of sway does this technology-loving, values-driven, need-to-know right now, group have over your supply chain. And do they deserve the power we’ve given them?


I should start by saying that I am in fact a part of this often talked about demographic, which according to Wikipedia is comprised of anyone born from the early 1980s to the early 2000s. I’ll let you guess where in that range I fall.


So why the big fuss about us up-and-comers? Well, according to Forbes, who agrees that 2015 is the Year of the Millennial, there are 80 million millennials in the U.S. alone, and it’s estimated that by 2017 we’ll be spending $200 billion annually. But it’s not just our spending power that has companies taking note. Here are a few facts from a Forbes and Elite Daily report.


  • A measly 1% are swayed to trust a brand based on advertising
  • 75% believe it’s fairly or very important for a company to give back
  • 62% will engage with brands on social media
  • 60% are often or always loyal to their regular brands
  • 42% are interested in co-creating products with companies
  • 87% use between two and three tech devices at least once a day

So how does all that relate to how you’re managing your supply chain? Let me explain. We want what we want when we want it. The speed of your supply chain in delivering goods to the end consumer is about to become critical. Same day delivery is becoming the norm. Why? Because millennials demanded it. But the pressure we’re putting on supply chains doesn’t stop there.


Mass production is no longer good enough. Leading consumer behaviouralist Ken Hughes points out we’re also demanding boutique, artisan goods and services, personalized in their nature and delivery. And did I mention how much we love shopping local? Are you sourcing your materials from within my country? What about from within my community? That’s going to make a difference.


Right alongside the fact that we’re all about local goods is our desire to see companies we support give back – to communities, workers and the environment. I’ve touched on this topic before when I explored how consumer priorities are driving major supply chain changes. Those consumers I was talking about. You guessed it, millennials.


I’d love to tell you that you have time to make changes to your supply chain. That you can take years to work on sustainability, sourcing local suppliers, and developing an environmentally-friendly process. But the reality is that one of the most defining traits of my generation is our expectation that everything we want is available at the swipe of a finger. Growing up in the age of the Internet of Things means we’re used to things being available at hyper speed.


And while I may have posed the question at the start of my blog, it appears with our buying power and the very fact we’re poised to overtake the Baby Boomer generation in a matter of years, that yes, apparently we do deserve the kind of power we’ve been given. I just hope we use it responsibly and don’t let it go to our heads!


Is your supply chain ready to meet the needs of the millennials? What have you done for this fundamental shift in priorities? Let us know in the comment area below.

The post The Millennial Mentality: Is Your Supply Chain Ready for the Shift? appeared first on The 21st Century Supply Chain.



Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/07/the-millennial-mentality-is-your-supply-chain-ready-for-the-shift/

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.




“…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…”





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





“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…”



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/

Filter Blog

By date:
By tag: