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2012

This week I was privileged to man the Kinaxis booth at the IBF conference held at the beautiful Disney Contemporary resort in Orlando. The event was well attended with Demand Planning, S&OP and Supply Chain professionals coming to discuss forecasting, sales and operations planning and supply management.

 

One of the ideas that was discussed is that there is still a wall between the demand planner and the supply planner. In other words, in some organizations, the demand planner feels they do not need to concern themselves with what the supply picture is. This is a very traditional view of demand planning and unfortunately doesn't reflect the realities of modern supply chain management (note that supply chain management includes demand planning in my opinion). Think about the concept of supply shaping — that is the benefit of running promotions to reduce inventory or fill unused factory capacity. How can you make this type of decision without integrating supply and demand management? Inventory isn't a supply side responsibility, nor is it a demand side responsibility. Inventory (an excess or shortage) is the result of a misalignment between demand and supply. Both parties have a stake in the problem.

 

On the S&OP side, a statement I heard several times is that a successful S&OP implementation is the result of the right people, process and technology. I couldn't agree more.

  • You need the right People to design your process, but more importantly, you need the right people to take part in the meetings. Successful S&OP meetings require regular attendance by representatives of each group (Demand Planning, Supply Planning, Finance, HR, Engineering (for NPI activities)) who are capable and accountable for the decisions and agreements made at the S&OP meeting. A top level executive is also needed to chair the meeting and to render final decisions where needed.
  • Also needed is Process. The S&OP team process must establish the groupings, or families that will be reviewed by the executive team. Further, S&OP meetings need to have a clearly defined agenda, with meetings scheduled on a predictable cadence, scheduled well in advance so that decision makers can plan to attend. Finally, the process needs to define roles, responsibilities and timing for creating the S&OP plan.
  • The last piece of the puzzle is Technology. Companies have been successful running S&OP using excel spreadsheets, but new, robust supply chain tools can do so much more. Most S&OP tools we've seen focus primarily on the demand side and have relatively static representations of supply. Supply constraints are represented using rough cut capacity planning where key constraints or materials are included. Further, timing and interactions of those key constraints are rough estimates at best. The true impact of your plan isn't truly known until after the S&OP plan is disaggregated down to the MPS.

     

    Now think of another approach. What if your S&OP plan could be modeled considering your entire supply chain? You make a change to demand, and instantly, you can see a constraint several levels down the supply chain, potentially at a different site — perhaps even at a supplier site which is overloaded. How might this change your S&OP planning process? How much more confidence would you have in the plan?

 

The last thought I have is around a statement one of the presenters made: "—We need to grow our demand planning organization. I have budget and headcount spaces allocated...the only thing I need is someone to fill the space. We can't find those people."— This is a disturbing trend that I'm hearing all over supply chain...there are jobs out there for supply chain professionals, but it's getting harder and harder to find people to fill them. I know that many schools are offering supply chain management courses. If you are looking to find young energetic planners, try contacting local schools and interviewing graduating students. You might be surprised! Also, organizations like IBF and APICS offer training and certification programs that can take interested people from within your organization and turn them into superstar planners.

 

As I sit at the Orlando airport waiting for my flight, and think back about the last few days I only have one disappointment. Mickey Mouse never came by the booth! Oh well, maybe next year.

 

 



Originally posted by John Westerveld at http://blog.kinaxis.com/2012/10/thoughts-from-ibf-conference-in-orlando-wheres-mickey/

This week I was privileged to man the Kinaxis booth at the IBF conference held at the beautiful Disney Contemporary resort in Orlando. The event was well attended with Demand Planning, S&OP and Supply Chain professionals coming to discuss forecasting, sales and operations planning and supply management.

 

One of the ideas that was discussed is that there is still a wall between the demand planner and the supply planner. In other words, in some organizations, the demand planner feels they do not need to concern themselves with what the supply picture is. This is a very traditional view of demand planning and unfortunately doesn't reflect the realities of modern supply chain management (note that supply chain management includes demand planning in my opinion). Think about the concept of supply shaping — that is the benefit of running promotions to reduce inventory or fill unused factory capacity. How can you make this type of decision without integrating supply and demand management? Inventory isn't a supply side responsibility, nor is it a demand side responsibility. Inventory (an excess or shortage) is the result of a misalignment between demand and supply. Both parties have a stake in the problem.

 

On the S&OP side, a statement I heard several times is that a successful S&OP implementation is the result of the right people, process and technology. I couldn't agree more.

  • You need the right People to design your process, but more importantly, you need the right people to take part in the meetings. Successful S&OP meetings require regular attendance by representatives of each group (Demand Planning, Supply Planning, Finance, HR, Engineering (for NPI activities)) who are capable and accountable for the decisions and agreements made at the S&OP meeting. A top level executive is also needed to chair the meeting and to render final decisions where needed.
  • Also needed is Process. The S&OP team process must establish the groupings, or families that will be reviewed by the executive team. Further, S&OP meetings need to have a clearly defined agenda, with meetings scheduled on a predictable cadence, scheduled well in advance so that decision makers can plan to attend. Finally, the process needs to define roles, responsibilities and timing for creating the S&OP plan.
  • The last piece of the puzzle is Technology. Companies have been successful running S&OP using excel spreadsheets, but new, robust supply chain tools can do so much more. Most S&OP tools we've seen focus primarily on the demand side and have relatively static representations of supply. Supply constraints are represented using rough cut capacity planning where key constraints or materials are included. Further, timing and interactions of those key constraints are rough estimates at best. The true impact of your plan isn't truly known until after the S&OP plan is disaggregated down to the MPS.

     

    Now think of another approach. What if your S&OP plan could be modeled considering your entire supply chain? You make a change to demand, and instantly, you can see a constraint several levels down the supply chain, potentially at a different site — perhaps even at a supplier site which is overloaded. How might this change your S&OP planning process? How much more confidence would you have in the plan?

 

The last thought I have is around a statement one of the presenters made: "—We need to grow our demand planning organization. I have budget and headcount spaces allocated...the only thing I need is someone to fill the space. We can't find those people."— This is a disturbing trend that I'm hearing all over supply chain...there are jobs out there for supply chain professionals, but it's getting harder and harder to find people to fill them. I know that many schools are offering supply chain management courses. If you are looking to find young energetic planners, try contacting local schools and interviewing graduating students. You might be surprised! Also, organizations like IBF and APICS offer training and certification programs that can take interested people from within your organization and turn them into superstar planners.

 

As I sit at the Orlando airport waiting for my flight, and think back about the last few days I only have one disappointment. Mickey Mouse never came by the booth! Oh well, maybe next year.

 

 



Originally posted by John Westerveld at http://blog.kinaxis.com/2012/10/thoughts-from-ibf-conference-in-orlando-wheres-mickey/

Readers of our blog know how much we love our top ten lists. Well, we did it again; we compiled the top ten tweets from Kinexions `12 our annual training and user conference. With so much tweeting at the conference, it was difficult to narrow it down to just ten, but here it is... drum roll please!

 

 

 

10. Lora Cecere, Supply Chain Insights

 

 

 

9. Mark Mirsky, GT Nexus

 

 

 

 

 

 

8. Ray Wang, Constellation Research, Inc.

 

 

 

 

 

 

7. Lora Cecere, Supply Chain Insights

 

 

 

 

 

6. Trevor Miles, Kinaxis

 

 

 

 

 

 

5. Frank Scavo, Constellation Research, Inc.

 

 

 

 

 

 

4. Ray Wang, Constellation Research Inc.

 

 

 

 

 

 

3. Bob Ferrari, Supply Chain Matters

 

 

 

 

 

 

2. Lora Cecere, Supply Chain Insights

 

 

 

 

 

 

1. Frank Scavo, Constellation Research, Inc.

 

 

 

 

 

 

 

Originally posted by Melissa Clow at http://blog.kinaxis.com/2012/10/top-ten-tweets-from-kinexions-12/

We had our annual user conference last week. All early signs point to Kinexions '12 being a great event. The feedback from customers and the influencer community has been 100% positive (fingers crossed for future blog posts!).

 

The conference was my second since joining in August of 2011. As the conference was wrapping up, it really made me reflect on why I joined the company in the first place and why I continue to love working here.

 

Back on August 28, 2011, the day before I joined, I wrote a blog post on Why I am Joining Kinaxis. The three main reasons were: (1) the technology and approach behind RapidResponse, (2) happy customers and (3) the Kinaxis team. I loved what I saw of my interactions with employees. I was blown away by the case studies and customer stories. The product was something I had been waiting to see since I started my software journey as a product manager many years ago. Well, after my second Kinexions, let's take stock on where these sit today.

 

Kinaxis Team

 

We use LLSC to mean both "Late Late Supply Chain" Show and Learn, Laugh, Share and Connect. Let's face it — Supply Chain is hard. It is even harder than I thought a year ago. Promising orders, reducing inventories, collapsing cycle times, reducing planning cycles, gaining consensus on demand forecasts — these are not fun. So, the fact that we can get supply chain people together to laugh (a lot!), share their experiences, learn from experts and each other and connect with their peers — to collaborate around solutions to these complex problems in a relaxed setting — is really important and something that is at the very core of our culture. Hopefully, we will be able to post some videos of the event shortly to make this point (for those of you who were not there).

 

Verdict: Exceeds my initial expectation

 

RapidResponse Technology and Approach

 

RapidResponse is also better than I expected. Although I am not surprised about the power of one product — a single code based to solve many business challenges — I am surprised at our ability to innovate on top of the platform. Working in — and competing against — many other enterprise software vendors, it always seemed that the only path to new innovation was through releasing new products. Old products become "legacy" quickly because they are not built with a view to the future. The mantra of innovation in software companies is "new problem: new product" (where "new product" often means "acquire a small innovative software company"). So, naturally, I was skeptical about our ability to get new innovations to market in a timely fashion — we clearly were not going to compromise on having a single product. Well, all my worrying was needless. In calendar 2012, we will have had three releases (11.0 in March, 11.1 in July in 11.2 in December) bringing the following innovations to market (just as examples of a larger pool):

  • Database namespaces — to extend RapidResponse into new application areas
  • Non-Blocking Allocations and Multi-Level Sourcing — to free up material resources to get products to market quicker (without compromising delivery of other products)
  • Workbook and Alerting Enhancements — to allow for more rapid application development and reuse of resources (usability)
  • New demand planning analytics and chart types
  • Mobile offering — auto-creation of dashboards in HTML5 to be device independent for highest adoption (ROI) and lowest maintenance (TCO)
  • Integrated project management — to balance supply and demand of both material and human resources (filling a major hole in the market)
  • Real-time Data Integration — through the inclusive of an enterprise service bus and queuing service embedded into RapidResponse
  • Attribute-based planning — for analytics extensions and flexibility in planning
  • Feature (or variant) bill of materials — for companies doing configure-to-order off a feature list
  • New scripting engine — for customer-based extension of workflow and automation
  • Process orchestration — to co-ordinate planning and response activities
  • New S&OP resources — including a calendar-based view of S&OP ownership by date

 

Verdict: Significantly exceeds my initial expectation

 

Happy Customers

 

I can start with the verdict on this one. It is seriously way above what I could have imagined. This is not hyperbole at all. I have also rewritten history and moved this up to #1 on my list — in spite of being a product guy who found a product that easily exceeds my expectations, this one is more important, refreshing and frankly, unbelievable in spite of seeing it numerous times now. Let's face it, happy enterprise software companies is an oxymoron to most people. Not to say that some of our customers don't have challenges with the software some days — of course they do. BUT ... instead of me going on, I suggest that if you are reading this and were not at the event last week, that you should check out the recordings by Laura Dionne, Guenter Schmidt, and JP Swanson of TriQuint and Don Gaspari of NCR. Not only do they share our values of learn, laugh and share in these presentations, their stories talk about very transformation initiatives that they have achieved with RapidResponse. If you have the chance to watch these, take into consideration that no one from Kinaxis saw (or asked to see) these presentations before the conference. They are completely the unedited work of the authors. We also had great presentations from Shellie Molina of First Solar at our influencer event, Lieu Yoke Sun from Agilent and Erwin Hermans from Celestica.

 

Net/net: Things are going really well at Kinaxis.

 

Before I close, I also want to pass on my favorite tweet (and there were a lot of good ones) from the conference tweet stream #kinexions12 and #kinexions. I really like this one because we really feel that we are the "Saleforce.com of SCM" or the "Workday of SCM" but we never talk to the market that way.

 

This one was all Frank Scavo (of Constellation)
 

 

 
 

 

 

 

 

 

 

 

 



Originally posted by Kirk Munroe at http://blog.kinaxis.com/2012/10/reflections-on-kinexions-2012/

The Kinaxis user conference " Kinexions" just wrapped up this afternoon at the beautiful Westin Kierland resort in Scottsdale Arizona. It was an action packed three days with insightful learnings from industry pundits, inspiring and entertaining presentations from customers and educational breakout sessions. Add to this a lot of fun, great food and plenty of networking opportunities and you have the makings for a real success.

 

The theme of the conference was called the "Power of One" and it talked to how having a single solution for end to end supply chain leads to improved responsiveness, better planning, better collaboration.

 

I recall a time not that long ago where you would need to have multiple devices to perform a few simple functions. The truly connected geek needed a cell phone for making calls, a PDA for managing calendars and contacts, a Blackberry for e-mails (remember when a Blackberry could only send and receive e-mail?) a pager to let you know when someone needed to get in touch with you and finally a GPS so that you wouldn’t get lost. Pretty soon, you started to look like this;

 

 

When the first smart phone came out, we suddenly had all the capability of multiple devices in a single compact package and the world changed. Today we look back at those days and think that needing all those devices was pretty silly…and it was

 

Yet if you think about the state of supply chain software today, we are very much in the mode of a different device(software) for each function. We have MRP systems, forecasting systems, demand management systems, inventory analysis systems…the list goes on. And of course, none of those systems talk “nicely” to each other. Data needs to be moved between systems, and as there is no way to get real time information flow to occur between each piece of software. Even software suites are not fully interconnected. You can’t, for example modify a forecast in the demand management module and instantly see the impact on the supply plan, even if the modules are provided by the same vendor and are supposedly “integrated”.

 

The result of all these systems is a supply chain where information flow is slowed by the need to move data between all these systems. S&OP takes weeks from information gathering to executive meeting. Evaluating demand or supply changes takes days and more often than not, decisions are made based on Excel models or guessing because it is too difficult to get the data from the various disparate systems. Further, the complexity of managing all these systems and ensuring information continues to move drives significant IT overhead costs.

 

So, imagine an alternative. Imagine a supply chain where all data exists in a single system. Where everything from forecast to supplier collaboration is not only provided by a single vendor but in a single piece of software, with a single data model. Imagine these supply chain calculations occurring in seconds. Imagine what this would mean to your ability to plan and respond. Now think about how your current supply chain software works with various semi-integrated modules that don’t really work well together. Seems pretty silly…and it is.

 

If your goal is to turn your supply chain into a strategic advantage, rather than just a cost center you need a single system for end to end supply chain. You need the Power of One.

 

 



Originally posted by John Westerveld at http://blog.kinaxis.com/2012/10/thoughts-from-kinexions-the-power-of-one/

My children are getting to the age now where the question that inspired the title of this blog is creeping into our dinner conversations. Luckily for me, the suggested twist in this classic exchange is not nearly as contentious or potentially upsetting as its original...

 

Or is it?

 

Unlike our belief in Santa Claus which starts out with us as toddlers "knowing" that he exists and progressing through a cycle of hoping, questioning, doubting, to ultimately, and somewhat tragically realizing that he...

 

Our adoption of the notion of Supply Chain Management as business strategy is often the opposite ̶ from disbelief/disinterest, to fervent conviction that it is so.

 

As children we knew everything there was to know about Santa Claus, we had no trouble putting a face to the name and he knew exactly what we wanted before we even asked, we understood his order management system, received order confirmations, we knew how his products were made, his method of delivery, his key suppliers, his delivery route, landed cost (naughty/nice, sleeping/awake), due date/promise date, we were able to reduce the bullwhip effect by (subconsciously) sharing our anticipated demands with his suppliers, many of us could even receive advanced shipping notices and track our packages through NORAD. Yes it's true, Santa has one of the most sophisticated supply chain networks in the world.

 

And yet, with this fact so deeply woven into our fabric of early life, why do some of us have trouble acknowledging that EVERY organization needs a sophisticated and competitive Supply Chain?

 

I don't mean to imply that this is the rule, surely we have seen the successes of many large, multinational corporations rise to astronomical heights based on the strength of their Supply Chains. Something that seems to be getting more and more attention in the mainstream media. Take this excerpt from an article in the Huffington Post written by Peter Henderson and Poornima Gupta where they state (of Tim Cook, CEO of Apple)

 

"...Rather, it was the speed of the global launch that astounded, validating the new CEO's much-touted wizardry at the essential but unglamorous task of managing a supply chain."

 

Read more about this article: http://www.huffingtonpost.com/2012/09/22/apple-supply-chain-tim-cook_n_1905674.html

My disbelief refers to the laggards, the late adopters of the advancing principals of Supply Chain Management. We see it too often, companies closing their doors because they were unable to compete with the giants of their industry, or even some of these giants closing their doors due to ballooning inventories often directly related to a loss of control of their Supply Chains. Yet, these companies faced the same problems that the successful ones did; their key competitive advantage (I would argue) was how they managed their supply chains.

 

One passage of the classic newspaper column stands out to me in this...

 

Did you ever see fairies dancing on the lawn? Of course not, but that's not proof that they are not there.

 

So, to all the doubters out there who feel inclined to ask "Is it real?" I will borrow the words of Francis Pharcellus Church...

 

Ah, Virginia, in all this world there is nothing else real and abiding.
No Supply Chain strategy! It lives, and it lives forever. A thousand years from now, Virginia, nay, ten times ten thousand years from now, it will continue to make glad the hearts of all.



Originally posted by Andy Zeitz at http://blog.kinaxis.com/2012/10/yes-virginia-there-is-a-supply-chain/

I spent the last several days in Philadelphia at the LogiPharma 2012 event. The event was held at the Lowes hotel on Market street, a refurbished historic building, which was the former home of the Philadelphia Savings Fund Society (PSFS), the first savings bank in the United States. Many elements of the hotel harken back to the banking heritage including a huge vault door in the lobby. But this isn't John's historic building blog. What about supply chain you ask?

 

We've been to several of these over the past years. One thing that we've noticed is that we are seeing more supply chain interest at these events. As we talked to the various people who came by the booth, it isn't surprising why. Pharma has several unique supply chain challenges. Combine this with more and more government regulation, rules that change with geopolitical borders, and you can understand why we were so busy at our booth.

 

Cold chain — Many pharmaceutical require that the product be maintained at a specified temperature throughout the manufacturing life of the product. From API (the active ingredient in the drug) through to delivery into the customer's hands, the product must maintain a specific temperature —or it is ruined

 

Expiry — Every drug I've seen has an expiry date associated with it. Also each country has different regulations that restrict how close to the expiry date you can sell the product. One country may allow you to sell a product within 6 months of its expiry date, other countries may be stricter and only allow sales up to 18 months before expiry

 

Long lead times — Many pharmaceuticals especially biologically derived drugs have extremely long lead times. The active ingredient must be grown and as such will take months for a batch to be ready. One company we talked to was telling us of a product that took 6 months to produce, had a 2 year shelf life and had to be sold at least 12 months before expiry. (Yikes!)

 

Yield —Traditional supply chains consider yield to be a percentage of production. If I make 100, 3 may be defective. However, many pharmaceuticals are produced in batches. If the batch isn't good, 100% of the batch fails and you have to start from scratch — combine this with a 6 month lead time and you have a scheduling nightmare.

 

Patent expiry — Imagine that you have a very lucrative product. Sales are good, you are operating at capacity and are making very good money. Now imagine that a competitor comes along, uses your design and makes a competing product at ½ the price. This happens all the time to pharmaceutical companies when the patents run out and generic drug companies are allowed to start production. If not planned for, this event can have a significant impact on capacity utilization and revenues.

 

FDA approval — Introduction of a new drug is serious business. Every aspect of the design and manufacture of a drug must be approved before a drug can be used. Even if a company decides to manufacture the drug in a new location, the new location must be approved. If demand for a drug is higher than anticipated, you can't simply offload manufacturing to a new supplier — they must be approved for that drug in that country. Finally, if that approval is delayed, you cannot manufacture that drug until approval is received.

 

There are more aspects, but I think you can see why pharmaceutical supply chain is complex. But one thing to remember is that in many cases, these are lifesaving drugs. If the customer doesn't get their product, they can become very, very sick and perhaps even die. Adds a whole new dimension, doesn't it?
 
 



Originally posted by John Westerveld at http://blog.kinaxis.com/2012/10/supply-chain-heroes-observations-from-the-logipharma-event/

Oliver Wight has long been at the forefront of Sales and Operations training and consulting – even to the point that many companies will tell you very proudly that they have attained Ollie Wight Class A certification for a variety of processes. Oliver Wight has also spawned several off-shoots, including Ling-Coldrick, who has done some really great work in getting S&OP started in many organizations. Oliver Wight promotes the concepts of their ' Proven Path Methodology' on a ' Journey to Business Excellence', which I have captured below. This is a business process maturity chart, ultimately ending up in integrated business processes.

 

 

Maybe it is just me being impatient, but whenever I look at this diagram, I cannot help wondering who is going to embark on a 10 year process. In the current market conditions who can afford to wait that long? Anyway, Ollie Wight has been doing process consulting and change management for a lot longer than me, so perhaps they are correct. But it must be nice for Oliver Wight to get someone to commit to a 5-10 year project. Wow.

 

Having been around supply chain management since the early 1990's, I wonder how many companies have progressed to Phase 3, and are nibbling at Phase 4. Perhaps the answer lies with a different maturity model promoted by Roddy Martin, formerly of AMR Research, which is now part of Gartner's Supply Chain Management practice. Notice how there is a different value trajectory for the companies that are beyond Stage 3, when the focus is more on business value than operating efficiency.

 

 

 

 

 

 

Comparing these two maturity models I would say that Stage 2 of Roddy's model equates to Phase 3 of Oliver Wight's model, which is the focus on functional excellence supported by the automation of functional processes. Roddy contends that most companies are at 2.5 on the maturity curve, and some have reached 3.0, with Proctor & Gamble ahead of the pack at 4.7. In other words many companies have reached Phase 3 of the Oliver Wight model and a few have progressed into Phase 4.

 

It is in this context that I was fascinated by a recent daily email feed I get from George Palmatier of Oliver Wight in which he describes principles he wishes he had understood earlier in his life. (You can sign up for the daily feed here.)

 

 

It is the 'Integrated Planning and Control' aspect that I find really different and interesting. This equates to Roddy's notions of 'Demand Driven' (Stage 4) and 'Value Translation' (Stage 5). Fundamentally it is the recognition that while planning is necessary, planning alone is insufficient. One point on which I disagree with George is that he refers to 'changes in the market' without acknowledging that most of these are not changes but rather evidence that we did not have 100% knowledge of the market in the first place, and we never will. The significance is that by using the term 'changes in the market' there is an implicit assumption that a perfect plan that captures market conditions exactly can be created. We all know that any plan we create is aspirational, especially the long term plans, which is why, to me, 'control' sounds too much like measuring a supply chain's performance based upon Plan Conformance. If the plan was never 100% right in the first place, why are we forcing the supply chain to follow it?Instead of 'control' I would use Gartner's term ' Profitable Response' (see the diagram below), which is the core message of the middle paragraph in George's principle. The diagram is from a recent Gartner article titled ' Elevate Your S&OP Process From Traditional to Demand-Driven' (subscription required) published by Todd Applebaum and Jan Kohler in which they recommend that companies

 

Create a vision for S&OP that moves beyond operational planning to drive business value by driving profitable demand responses based on trade-offs and conscious choice.

 

Sounds to me like they are making the same point that George is making: Planning and XYZ. The important bit to me is the association of profitable response with demand sensing and demand shaping. What I like about the term demand sensing is the implicit recognition that we did not have a complete understanding of demand in the first place, whether in the long term, medium term, or short term. Obviously some of the need for demand sensing can be put down to 'changes in the market', not just lack of knowledge.

 

 

But what goes into being able to sense and shape demand, and then provide a profitable supply response? The strength of a large organization like Gartner is that there is often some really interesting work going on in multiple related areas. In June 2011 Roy Schulte, Janelle Hill, Nigel Rayner of Gartner published a report titled ' The Trend Toward Intelligent Business Operations' (subscription required)in which they address the Sense-Shape-Respond need from techy perspective, but the messages are consistent with what both Todd and Jan write (Gartner), and what George writes (Oliver Wight), and in which I believe. The key findings of the Gartner report on Intelligent Business Operations are

  • The adoption of integrated analytics is increasing as business managers and knowledge workers are asked to make faster and better decisions, and thus need improved visibility into their operations and environments.
  • “Real-time” operational intelligence serves different needs and uses different design patterns than tactical and strategic business intelligence (BI) and performance management (PM).
  • There are two fundamental styles of real-time operational intelligence: analytic services that run on request and active analytics that continuously monitor conditions in a company and its environment.
  • Organizations that pursue the business process management (BPM) approach to implementing systems are among the most enthusiastic and successful adopters of intelligent business operations, because business people and analysts can readily see where analytics and decision management should be used, and the project team has a commitment to explicit business process modeling and continuous process improvement.

 

My conclusion is that Gartner is seeing the need to plan, monitor, and respond in multiple business areas, not just supply chain management. The necessary technical capabilities they describe are captured in the following diagram.

 

 

For the less technically minded, the acronyms used in the diagram are as follows:

  • BAM — Business Activity Monitoring refers to the aggregation, analysis, and presentation of real-time information about activities inside organizations and involving customers and partners.
  • CEP — Complex Event Processing is event processing that combines data from multiple sources to infer events or patterns that suggest more complicated circumstances. The goal of complex event processing is to identify meaningful events (such as opportunities or threats) and respond to them as quickly as possible.
  • CBO – Constraint-Based Optimization, in the context of supply chain management, is essentially what we have called planning, and is focused on functional excellence.
  • BPMT — Business Process Management promotes business effectiveness and efficiency while striving for innovation, flexibility, and integration with technology.
  • Sim. – Simulation is the imitation of the operation of a real-world process or system over time. The act of simulating something first requires that a model be developed; this model represents the key characteristics or behaviors of the selected physical or abstract system or process. The model represents the system itself, whereas the simulation represents the operation of the system over time.

 

But we can see all the elements of the integrated planning and control discussed by Oliver Wight and Gartner's Sense-Shape-Respond. Both capture the essential point that while planning is necessary, it is not sufficient on its own.

 

Likewise processes and systems, such as event management, that can only alert you when a particular metric is out of whack without being able to tell you the downstream or upstream impact are insufficient. Similarly predictive analytics processes and systems that are based upon statistical analysis without any notion of the underlying model are insufficient. This is the point brought out in the definition of 'simulation'. And what better model of the supply chain do you have than the model you used to generate the plan in the first place?

 

Most supply chain planning systems fail to address the needs for 'intelligent business operations' described by Gartner because their entire focus is on creating the perfect plan. The term 'supply chain planning' indicates their focus. They do not provide the capabilities to monitor, manage, and control the business once planning is "done". Where supply chain planning systems fail is in being able to

  • identifying the upstream and downstream impacts of events
  • directing the alerts to the people responsible for the impacts
  • orchestrating the multi-functional simulation of ways to resolve the issues
  • incorporating both operational and financial metrics in the comparison of simulations
  • incorporate human judgment as the key element of making trade-offs across functions and competing metrics
  • doing all of this quickly

 

Doing some of this is not enough. Doing all of it slowly is not enough. Doing all of it quickly provides the Sense-Shape-Respond capabilities described by Gartner that are required to satisfy the needs expressed by George Palmatier of 'Integrated Planning and Control'.

 

 



Originally posted by Trevor Miles at http://blog.kinaxis.com/2012/10/integrated-planning-control-new-perspectives-from-oliver-wight/
Kinaxis

Dude, Where’s my car?

Posted by Kinaxis Oct 10, 2012

I recently had the opportunity to attended the Automotive Logistics Global conference in the Motor City, Detroit Michigan. As a self-proclaimed "car guy", the conference proved to be a fascinating behind the scenes look at the logistics of turning raw materials into the beautiful finished good we call the modern automobile. I had no idea about the complexities of the logistics involved and the amount of product that needs to be produced, manufactured, shipped and tracked all over the world.

 

Before I share some of the conclusions I took away from the subjects that were discussed, I must admit that I'm borrowing the idea for the title of my blog post from one of the sessions at the conference that was titled "Dude, there's my car". I think that either title (where or there) makes reference to an important challenge that the automotive logistics industry faces. Visibility. There a number of areas within this industry where visibility plays an incredibly important role, ranging from the visibility of the market (supply and demand) of raw materials to visibility into the availability and delivery date of finished vehicles to dealer lots.
SHEPTON MALLET, ENGLAND - APRIL 21: Visitors ...

 

There is no doubt, and it was definitely emphasized in various forums at the conference, that while visibility is key, it's also a challenge. With realities of lean manufacturing and just-in-time (JIT) delivery, one key area of visibility for an OEM is that of the shipments of parts that are destined for it's plants. One example of some successes in this area was shared during a joint presentation by Matt Jorgensen from Ford and Kevin Denomme from Penske. Leveraging GPS technology on it's fleet of trucks and the transfer of this information via Electronic Data Interchange (EDI), Penske had been able to provide Ford increased visibility into the arrival time of key components to it's plants. This has obviously assisted Ford in getting their plants to be more efficient and prevent downtime due to late deliveries. However in the complex industry that is the automotive manufacturing industry, an OEM having visibility into the delivery time of parts to it's facility is just the tip of the iceberg. There are multiple tiers of suppliers, all the way down to the raw materials, as well as the transportation of goods between all these tiers that make getting visibility into the entire supply chain a huge challenge. It's clear from the discussions that were held at the conference that the more visibility that can be gained into this supply chain, the more efficient and profitable the whole industry can be.

 

The idea sounds seems simple enough. Provide more visibility throughout the supply chain so that we can all be more efficient and profitable. But what was also clear is that all this visibility also mean a lot more data. And thus another challenge arises. What do I do with all this data? How do I store it, manage it, not to mention, make decisions based on it

 

From what I could tell, all this added visibility and the data that comes along with it could be one of the next big challenges for the industry. It's not good enough just to collect the data but not act on the data.

 

The better a company gets at analyzing that data, the more gains that company can make in terms of quickly detecting issues, and taking action earlier to mitigate issues. Essentially, knowing sooner and acting faster.

 

With all this data, there is no doubt that sophisticated tools are required to put the data to best use. These tools need to provide decision makers with the ability to do key things:

 

1) Visualizations and Alerting — It's critical that decision makers can get clear visualizations of the data in order to see what is happening in the business (through dashboards, charting etc..). The addition of alerting capabilities to this provides early detection of situations which are trending in the wrong direction.

 

2) Scenario creation — it is one thing to identify a problem, but it's another to analyze all the potential solutions. Having the ability to run and compare multiple what-if scenarios is key to being able to determine the right action in order to manage and mitigate the issue.

 

3) Fast Analytics — Doing all the above at lightning speed. Decision quality can't come at the cost of decision speed. It's critical that the financial and operational impact of the issue and the solution being considered be calculated instantly.

 

By the end of conference, it was clear that the industry is making great strides at improving the visibility into the supply chain. The answer to the question, "Dude where's my car?" is becoming easier and easier to provide. But the next step, and the step that I believe will yield even greater results is to not only answer the question, "Dude where's my car?" Instead, we need to be able to say "Not only do I know where your car is, but I'm making informed decisions to get it to you faster and with better productivity and profitability for the business!"

 

 



Originally posted by Andrew Bell at http://blog.kinaxis.com/2012/10/dude-wheres-my-car/
German beer

I recently came upon an upsetting article on the NPR news blog that I thought I would share. Evidently beer consumption in Munich has been positively impacted by an unusually warm late summer and bottle and keg returns have been lower than normal.  This unexpected increase in bottle and keg demand combined with an unexpected decrease in supply has resulted in the risk of the unthinkable; a potential beer shortage during Oktoberfest.

 

A quote from the article…” At the moment we could have a situation where we don't have any dark beer for a few days”…seems almost trivial until you think about it within the context of the 1.98 million gallons

of beer that were consumed during the 17 days of last year’s festival.   This is definitely not a trivial matter to local breweries.

 

I think that one of the interesting aspects of this supply chain model is the reliance on consumers to return the bottles and kegs for re-use.  Local breweries will wash and re-use returned bottles up to 50 times according to the article.  Having consumers play such a major part in the supply chain is great from a resource and environmental standpoint, but it could also expose breweries to some risk in the case of a spike in demand.

Taking into consideration that the consumer is also the supplier, what would be your strategy to keep bottle supply in-line with demand?

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