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2015
by Alexa Cheater

Data represents a non-traditional supply chainAn interesting topic came up the other day at the office, the idea of non-traditional supply chain. Not non-traditional in the sense of a company that thinks and acts a little outside of what’s considered to be ‘normal’ supply chain operating processes. Rather, supply chains that don’t deal with material goods at all. Perhaps it’s because I’m a Millennial, part of Generation Y, and came of age at the same time the internet did, but my very first thought was of course there’s such a thing as non-traditional supply chain – just look at the data!

 

Anyone who works in traditional supply chain knows data is king. It plays an integral role in managing not only your sales and operations planning (S&OP), but rules the roost so to speak when it comes to making sure your supply chain is operating effectively. Without accurate and timely data, that’s also easily visible, you’re likely not making the best decisions for your business.

 

But what I’m talking about isn’t using data to enhance your supply chain. I’m talking about data as a commodity – and it’s a booming business right now. There are countless companies whose sole purpose is to mine data about consumers and sell it back to businesses for research and marketing purposes. How else do you think those annoying telemarketers got your number? This non-traditional supply chain isn’t pulling in parts from multiple suppliers to build an end product. But it is pulling data from multiple sources to compile a comprehensive database about you (frightening, I know!). That data is then moved from server to server and from company to company, the same way traditional supply chain moves inventory.

 

For the number of companies who trade in data, there are thousands more who use it as a primary part of their business on a daily basis. They need to monitor where that data is coming from, where it’s headed to, and the consequences of any delays, just like with traditional supply chain. Financial institutions, health care operations, and even SaaS businesses are just a few examples of industries where data should be managed the same way as traditional supply chain. Perhaps in some cases it already is.

 

These non-traditional supply chains even have similar risks as their traditional cousins. Both need to be concerned with things like disruptions to the supply chain. Event occurrences like natural disasters don’t only effect the movement of goods. They can knock out servers and down phone and power lines, preventing data-based companies from delivering their virtual goods. And don’t forget, worker strikes and labor shortages aren’t just limited to the manufacturing sector. Plus, non-traditional supply chains dealing with data have the added risk of breaches caused by hackers, improper procedures, or corrupted files.

 

Stay tuned for part two, where I discuss another potential non-tradition supply chain – people.

 

The post Non-Traditional Supply Chain Pt 1: Data as a Commodity appeared first on The 21st Century Supply Chain.

 

http://blog.kinaxis.com/wp-content/uploads/2015/04/blog-webcast-supply-chain-transformation1.png

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/04/non-traditional-supply-chain-pt-1-data-as-a-commodity/

by CJ Wehlage

a vehicle break-in was part of the ugly at the High Tech Supply & Demand SummitThe first words foretold the upcoming days. When I checked into the hotel at the High Tech Supply & Demand Summit in San Francisco, the front desk person, as she was handing me the room card, pointed to the right, and said, “if you go for a walk, don’t go that way, that’s the Tenderloin district. It’s a very dangerous place.”

 

Those initial words rang true to what happened the next two days. Having spent two years at AMR Research, I’ve seen the type of analyst that will be so direct, the message comes across harsh. I’ve leaned towards the concept of writing the positives, with some humor, and based on practical, business-based supply chain knowledge. Today, for this blog post, that changes.

 

The Good

 

As always with the IE Group conferences, the speakers, presentations and content were fantastic. They were based in core business challenges, with practical take home learnings. I’ve seen other conferences that focus too much on the “2020” and “Future Supply Chain” stuff. Hard to take sustainable 3D printing advice to the CFO, when they are asking for inventory and cost savings.

 

The best quote of the conference came from Jawbone.

 

“Is your supply chain Reaction Worthy?”

 

There are many supply chains that pride themselves on “getting it over the goal line”, and “chasing down that shortage”. When you think about it, those concepts are costing the company cash flow, either in lower margin or lost productivity. The biggest issue with Excel isn’t the potential errors, the multiple sets of numbers, or the disconnected plans. It’s the strong willed planner who uses Excel to get their supply chain disruption fixed. Yes, they may have fixed the issue. But, at what cost? Were there other higher priority issues? What carnage did fixing this issue create? All this gets back to “Reaction Worthy”. As Jawbone presented, the better supply chains need to be notified of a true, priority exception, not have all planners running around trying to find exceptions. Only when this happens, will planners be able to drop the “reactionary” model and move towards a “proactive” model.

 

Jawbone left with some great questions each supply chain leader should take back home:

 

  • What If your competition puts a similar product out, do you know what supply chain model they are using to beat your margin and profit?
  • What is your ideal reaction?
  • What is the cost impact? Revenue impact?
  • What other reactions should you consider? Have you simulated them?
  • Who needs to collaborate and who needs to agree on the response?
  • Have you prepared probability scenarios to address the risk?
  • When you “Hit Start”, are you certain ALL nodes of your network are executing the change?

Later that day, these questions were brought to life when a brand presented their supply chain story. As they talked about customer collaboration and such, an actual customer of the brand was in the audience. It was dynamic and entertaining, along with some awkward back and forth. That’s the fun of the IE Group content. Watching a brand and customer challenge their supply chain model was insightful.

 

The Bad

 

The comments from the registration desk put the venue at the top of this list. This wasn’t a great location for a conference. The accommodations, along with some service and a tight fit, were below average. As well, the multiple company presentations need be limited. Three separate companies presented twice in the two days. That’s six presentations from three companies. While the content was interesting, I would have wanted to see a mix of companies, rather than one company presenting multiple times during the conference.

 

As a vendor, I did take back a huge lesson. When having a customer present on behalf of a vendor, make sure the content shows the customer challenge, the customer response, and the customer benefits only. The audience will engage with the customer much more. Hearing about the software and getting a sales pitch disengages the room. There were 34 questions for Jawbone, who presented on behalf of Kinaxis. Another vendor added software and marketing insights to their customer presentation. While interesting, that presentation only received three questions.

 

The Ugly

 

I thought this section would contain itself to just our account executive. When driving back home to the south bay from San Francisco, another car hit him. Thankfully he’s fine and it was just the car damaged. I understand this happens, but, you see, he was days away from moving his family back to Chicago, and this had a huge impact on his schedule.

 

However, the Ugly story doesn’t end there. It was school vacation week, so my family decided to join me in San Francisco, since San Diego is not too far of a drive. We went over to the Exploratorium, parked in a paid lot, in the handicap spot. When we returned a few hours later, we found our car windows were smashed, and some luggage taken. We had to drive the eight hours back to San Diego with kids and a service dog sitting next to smashed windows. The police were very helpful with the report, but said “this happens a lot.” I did some “googling” and found he was right. Crime, especially against tourists, is up dramatically in San Francisco.

 

I guess the “Hope and Change” isn’t quite what we expected in the City by the Bay!

 

The post The Good, the Bad and the Ugly at the High Tech Supply & Demand Summit appeared first on The 21st Century Supply Chain.

 

http://blog.kinaxis.com/wp-content/uploads/2015/04/blog-webcast-supply-chain-transformation1.png

 

Originally posted by CJ Wehlage at http://blog.kinaxis.com/2015/04/the-good-the-bad-and-the-ugly-at-the-high-tech-supply-demand-summit/

by Andrew Dunbar

A common supply chain challenge is resource planningGoogle “Top 10 supply chain challenges” and you’ll find 44 million different opinions on the biggest issues our industry faces today. Many are filled with our favourite industry buzzwords: Visibility, Risk Management, Cost Pressure, The Internet of Things, Security Threats… and the list goes on. These are all interesting and catchy concepts but they don’t necessarily address the fundamental challenges faced by your supply chain organization. A common mistake when developing a supply chain strategy is to select some key initiatives or technology platforms and a list of best practices, and work backwards to highlight the business problems you’ll solve with your plan. If this is your approach then the Boston Bruins aren’t the only one’s putting the cart before the horse (Go Sens!).

 

I like the approach recommended by Peter Bolstorff, a Supply Chain Council Executive Director with APICS. He recommends a fundamentals-first approach to strategic planning and suggests focusing on three basic challenges:

 

  1. Rate of supply chain planning
  2. Resource management in a global organization
  3. Real time transformation of data into competitive insight.

The engineer in me loves the idea of designing a strategy beginning with first-principles and the business analyst in me is glad to see the challenges worded as business problems, instead of technology platforms. In the end, you may come up with the same plan you had when working from the solution backwards, but if you start with your business’s key challenges you can make sure nothing gets lost in translation.

 

Here’s my take on Peter’s three supply chain challenges:

 

  1. Rate of planning – This is a big one if you’re going to survive in today’s environment. If you’re still using MRP to make your supply chain planning decisions you’re in serious danger of getting edged out by your competition. Think your MRP system is working just fine? Check out this video from the Demand Driven Institute and ask yourself if this case sounds familiar: The Conventional Planning Puzzle – Just How Crazy Does MRP Make Your Life?
  2. Resource Management –Do the people you employ have the training to make the right decisions and to understand the impact of their decisions on the rest of your organization? It can get pretty ugly if your supply chain personnel doesn’t have the training to even identify the deficiencies in your organization. Supply chain planning systems are incredibly complex and if you’re not ensuring your team are experts with the tools you give them, then you can’t possibly get the most out of your investments.
  3. Competitive Insight – Do you have the ability to perform real-time simulations and clearly define the impact your planning decisions have throughout your organization? Taking that one step further, do you have the ability to ACT on that insight? Dashboards, metrics, scorecards, alerts, and collaboration tools are a must-have if your supply chain is going to give you a competitive advantage.

Do you have fundamental supply chain challenges that aren’t mentioned here? How are you going about fixing them? Comment back and let us know!

The post How Do You Define Your Supply Chain Challenges? appeared first on The 21st Century Supply Chain.

 

http://blog.kinaxis.com/wp-content/uploads/2015/04/blog-webcast-supply-chain-transformation1.png

 

Originally posted by Andrew Dunbar at http://blog.kinaxis.com/2015/04/how-do-you-define-your-supply-chain-challenges/

by Alexa Cheater

A green supply chainIn honor of Earth Day I thought I’d take the opportunity to outline in my humble opinion why having a green supply chain is no longer a nice-to-have – it’s a necessity. Gone are the days when consumers would look the other way while companies rode roughshod over the environment in pursuit of a more profitable supply chain. Nowadays even governments (the good ones at least), are actively involved in making sure Mother Nature is protected, at least to some extent. Are you doing your part?

 

There is a growing need for sustainability integration into supply chain management and if you haven’t already started down the path to greener pastures you’re falling dangerously behind the trend, and it could be costing you more than you know.

 

According to a recent World Economic Forum report written in collaboration with Accenture, companies like UPS, SABMiller, DHL, Unilever and Nestle are among 25 multinational companies that have increased their revenue by up to 20% while cutting supply chain costs as much as 16% thanks to a focus on sustainability. Beyond Supply Chains: Empowering Value Chains outlines 31 best practices for businesses to follow in order to see similar results, in what they’ve termed “the triple supply chain advantage.” Basically, companies work to achieve profitability through measures that benefit society and the environment at the same time.

 

A few of the more interesting practices include collaborating with the competition and using innovative technologies to drive savings. Why would anyone want to collaborate with the competition? And how exactly does that lead to a green supply chain? Nestle is referenced as one company who has taken this approach and seen the gamble pay off. They’re collaborating with rival PepsiCo, combining parts of their supply chain for fresh and chilled products in the Belgian market. The report says the two have “bundled warehousing, packaging and outbound distribution and synchronized deliveries to retailers to get full truck loads.” As a result, transportation costs dropped 44%, carbon emissions were reduced by 55%, and retailer and customer satisfaction levels increased. Talk about a win-win scenario.

 

DHL has also made efforts toward a green supply chain with the implementation of an aerodynamic trailer, first deployed way back in 2006. The Teardrop™, developed jointly with Don-Bur, is more aerodynamic than traditional models, and delivers fuel and CO2 savings of up to 12%.

 

What I also found particularly surprising was the report’s reference to the fact that profitability went up at almost the same rate a company’s carbon footprint went down. Carbon gas reduction was between 13-22%, while revenue was uplifted 5-20%. Add to that the fact that brand value increased an average of 15-30% and I’m seriously starting to question why any business isn’t taking a good hard look at implementing a green supply chain.

 

Of course, I’m fully aware that’s a lot easier said than done. There are some pretty big hurdles that need to be overcome before a green supply chain become a reality, most notably the associated costs needed for implementation, ensuring compliance in global, non-transparent supply chains, and the difficulty in identifying and utilizing options that will actually drive value for the business, society and the environment. I won’t go into great detail here about how you can get your business on the path to a green supply chain, but check out a previous blog, Start small, stay focused and keep going, by my colleague John Westerveld for some great information.

 

Green supply chains help promote lean operations, earn the admiration and loyalty of customers and employees, and improve profitability. So get at it! It’s not going to be easy, but it will be worthwhile.

 

What steps has your company made in moving toward a green supply chain? Comment below and let us know!

The post Why Having a Green Supply Chain Has Become a Necessity appeared first on The 21st Century Supply Chain.

 

http://blog.kinaxis.com/wp-content/uploads/2015/04/blog-webcast-supply-chain-transformation1.png

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/04/why-having-a-green-supply-chain-has-become-a-necessity/

by Bob Ferrari

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

 

Avaya's Supply Chain Transformation

 

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

by Melissa Clow

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Avaya's Supply Chain Transformation

 

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

by Agnes Rubaj

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

 

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

 

Let’s get started!

 

Kinexions Logo

 

“I think I like this one.”

 

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

 

“Hey, that’s pretty clever!”

 

“Is it too busy though?”

 

Kinexions Logo

 

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

 

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

 

Kinexions Logo

 

“Look, red cards, they read my mind!”

 

“OK, so is that a full house?”

 

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

 

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

 

Kinexions Logo

 

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

 

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

 

Kinexions Logo

 

“Hmmm….”

 

“I like the poker chip idea.”

 

“I don’t like the background.”

 

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

 

Kinexions Logo

 

“The chip again! And no grey!”

 

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

 

“I prefer the shortened tagline.”

 

Kinexions Logo

 

“Collective gasp.”

 

“Whoa!”

 

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

 

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

 

 

 

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

 

 

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

 

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

by Alexa Cheater

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

 

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

 

Register now!

Speakers

 

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

 

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

 

Benji Green

 

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

 

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

 

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

 

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

 

Avaya's Supply Chain Transformation

 

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

by John Westerveld

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

 

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

 

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

 

  1. Knowing sooner
  2. Acting Faster

Know Sooner

 

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

 

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

 

Act Faster

 

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

 

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

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

 

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

 

 

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

 

Avaya's Supply Chain Transformation

 

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

by Alvaro Fernandez

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

 

Avaya's Supply Chain Transformation

 

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

by Melissa Clow

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

Avaya's Supply Chain Transformation

 

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

by Alexa Cheater

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

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

You can start the show… whenever you’re ready

 

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

 

Bullwhip Effect

 

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

 

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

 

Multi-Echelon Supply Chain

 

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

 

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

 

Push Model

 

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

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

 

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

 

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

 

Single-Use Kaban

 

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

 

Pull Model

 

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

Key Factors of Success

 

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

 

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

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

 

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

 

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

 

 

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

 

Avaya's Supply Chain Transformation

 

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

by Meranda Powers

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

http://blog.kinaxis.com/wp-content/uploads/2015/04/blog-webcast-supply-chain-transformation.png

 

 

 

 

 

 

 

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

 

Avaya's Supply Chain Transformation

 

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

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