Join us on July 7 at 1pm EDT as we sit down with “The Dean of Innovation” Jeff DeGraff for a live Q&A.
Jeff’s creative and direct take on innovation has made him a world-renowned thought leader and helped him earn the title of “The Dean of Innovation.” Putting his practices into action, he advises Fortune 500 companies on how to grow, change and ultimately move forward to see positive results.
An enthralling and inspirational speaker, this is an amazing opportunity to learn a bit about Jeff’s unorthodox view of innovation as he shares his ideas on combining theory and practice to instill the mindset needed to make innovation truly happen.
Who: Jeff DeGraff “The Dean of Innovation”
What: Live Q&A
When: July 7 at 1pm EDT
Where: Live Online Streaming Event
The post Live Q&A with Jeff DeGraff “The Dean of Innovation” appeared first on The 21st Century Supply Chain.
Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/06/live-qa-with-jeff-degraff-the-dean-of-innovation/
The modern day inventory manager described in this series is the backbone of your company’s inventory planning process. She has a strong understanding of supply chain fundamentals and is an expert at controlling the key levers impacting the inventory company’s investment in inventory. All that’s left is to add a planning system that enables her to work effectively. If you leave her to build reports and metrics that she needs in excel then she’ll spend all her time crunching numbers instead of planning your company’s largest asset. So, what features should you look for in a good planning system?
The tools described above enable the inventory manager to respond to changes when they happen, not when her phone rings. It allows her to visualize their inventory plan, predict the impacts of her actions, and effectively collaborate with her colleagues. It allows her to redefine the role of the inventory manager and add new value to the company’s bottom line.
Interested in learning more about inventory management? Check out the rest of the blogs in this series.
Originally posted by Andrew Dunbar at http://blog.kinaxis.com/2015/06/inventory-management-technology-enablers/
As I was presenting at the European Supply Chain and Logistics Summit last week, the overriding memory I’ll take away was the number of people that were nodding and pointing at the screen when I talked about how unplanned supply chain events that occur need to be addressed immediately and that they cannot wait to be included as part of a new S&OP cycle.
Traditionally, an S&OP cycle is a process geared towards taking a medium/long-term forecast, balancing with aggregate level resources and generating questions/answers to establish preventative action. Usually it’s seen as a monthly process that follows this cycle:
However, this process makes several broad assumptions:
What about the following possible events:
Sure, some of these events could be categorized as ‘daily operational planning issues.’ If these issues are relatively small and within permitted boundaries of acceptability that’s fine. For example, it’s unlikely that if a supplier delivers one short on a delivery of a million units that it will have much impact. But what about the events listed above that would normally be considered during an S&OP cycle? What happens if they occur midway through a monthly S&OP cycle?
Before the event, I took a look at the top 25 Gartner Supply Chain Planning companies and saw some commonality and overriding statements from these organizations:
“…improving speed to response…” – Unilever
“…designed and brought to market in a week…” – Inditex
“…end to end visibility…” – Samsung
“…using what-if simulations and real time analytics…” – Colgate
“…driving waste out of supply chain operations…” – Nike
“…improving forecast collaboration…” – Coca Cola
“…collaborative…” – Seagate technology
“…accelerating time to market…” – 3M
These guys are ‘Planning in the NOW’ – they’re not waiting for the next S&OP cycle to make operational and tactical decisions that influence event results. They’re responding to supply chain events collaboratively and as quickly as possible.
In fact, DRK Research recently published a paper that directly linked the impact of a supply chain unplanned event to the amount of time taken to discover it, respond to it and correct it. Those companies that react quickest, see much less disruptive impact.
So, if your competition is doing this – could you be doing it too? Is the traditional S&OP cycle now defunct?
Well, at Kinaxis, we think that having a single end-to-end planning engine allows you to run your operational business, establish tactical and strategic aggregate S&OP for demand forecasting and inventory optimization and also have a system to be able to respond and react to S&OP level events as they occur. Kinaxis is unique in that it can handle all of this planning, using a single data model with all planning applications dynamically linked and generating ‘what-if’ scenarios to consider unplanned events, establish a corrective action and then commit the response back to the operational business model.
The post Sales and Operations Planning (S&OP) in the NOW, is happening NOW! appeared first on The 21st Century Supply Chain.
Originally posted by Matt Benson at http://blog.kinaxis.com/2015/06/sop-in-the-now-is-happening-now/
How many of you are familiar with the game Simon? While Simon is really a memory game, what I really want to emphasize is that it is unpredictable. You start by pressing on one color and with every selection you are presented with a random sequence of colors that you must remember and repeat. It is random; not sequential and your decisions have to be made quickly as the game speeds up at every turn. It is just like your supply chain.
So how do you manage an integrated supply chain when you don’t know the sequence of events from day-to-day and any decision you make can impact your next action and also others in the organization?
I like to call this ‘Connecting the Dots’.
I remember starting in supply chain many years ago in procurement, negotiating pricing and managing suppliers. At the beginning, about a month after I had placed a large purchase order I was approached by accounting. It turns out that the supplier didn’t acknowledge the price and invoiced differently than the purchase order. This is one example of many accounting issues that we all know can occur but it taught me very early that everything I do can potentially impact some other part of the business and often you find out much later, often too late.
Have you ever made a bad decision?
How many of you have made quick decisions on meeting forecasts only to find out that you lost a good part of your margin on expedited freight, overtime and premium material costs?
Connecting the dots is very important for a SCP SOR because everything is related to cause and effect – understanding the impact of your decisions before you execute.
The siloed approach
This is where the traditional SCP SOR vendors have failed. Many organizations are working with the siloed approach with separately integrated modules. The concept of demand understanding how they have impacted supply or vice versa is unheard of.
How to achieve transparency
Achieving transparency within and outside your four walls is going to require the following:
In the next blog I will speak more about collaboration. Look for Step Four to Stage Five SCP SOR ‘Collaborative Management’.
The post Step Three: Stage Five Supply Chain Planning System of Record (SCP SOR) appeared first on The 21st Century Supply Chain.
Originally posted by Carol McIntosh at http://blog.kinaxis.com/2015/06/step-three-stage-five-supply-chain-planning-system-of-record-scp-sor/
Over the last several weeks, this blog series on Inventory Management has explored the objectives and roles of inventory managers and outlined several of the improvement levers available to them. This post will discuss some of the metrics and analysis tools that an inventory manager needs to identify risk and opportunities and to make intelligent decisions to optimize the performance of their inventory.
When determining the metrics required for any business process, the first question you need to ask yourself is, “What are the business goals of the process?” Once you can answer that, you need to understand where the business process fits into the organization. What processes are upstream of your current process? Who relies on the outputs, and what are their priorities? These are all important questions to help you select metrics that facilitate a balanced decision making process and allow you to understand the trade-offs between proposed scenarios.
The metrics you choose should answer the questions your organization is asking, without requiring additional analysis. If you find your organization spending too much time completing repetitive ad-hoc analyses, you may want to re-evaluate your metrics. Each metric requires context. This could be a target level, or simply historical data that allows the reader to understand how the current situation compares to the ideal. Your dashboard metrics should highlight issues requiring immediate action and should be supported by details that can tell the whole story. If your organization wants advice on data visualization techniques for dashboard design, communication, or analysis purposes, I highly recommend checking out the work of Stephen Few.
So, what do you need to measure to manage your inventory?
Interested in learning more about inventory management? Check out the rest of the blogs in this series.
Originally posted by Andrew Dunbar at http://blog.kinaxis.com/2015/06/inventory-metrics-from-insight-to-action/
Co-author: Alvaro Fernandez
Happy Father’s Day to all those hardworking dads out there! Ever notice how your dad’s advice always seems to come from a place of experience? He’ll always let you make your own mistakes, unless he’s already made those same mistakes himself. In honor of these dads’ accomplishments in the field of trial and error, I’ve compiled a list of the top 10 lessons your dad can teach you about supply chain.
10. First pants, then shoes – Whether you’re getting dressed for work or increasing your supply chain maturity, it’s important not to get too far ahead of yourself. Make sure your supply chain solutions help you excel at each capability as you progress through the maturity model.
9. Know the risk – Ex. In principle, just-in-time processes are very efficient. You get to hold on to your hard earned money for longer, you don’t have to store extra inventory, and your workspace isn’t cluttered with things you don’t need yet. In practice, these high rewards comes with high risk. Dads have learned this the hard way by applying this approach to things like anniversary gifts, anniversary cards, and sorry-I-missed-our-anniversary flowers. It’s important to understand the risks in your supply chain, and to have the right mitigation strategies in place.
7. Waste-not, want-not – Have you ever seen dad eating that leftover turkey sandwich piled up with layers of creamed-onions, roast potatoes, Brussels sprouts and cranberry sauce? Or finding inventive ways to use up that bulk purchase of 200 cans of tomato soup? He’s treating that excess inventory as delicious opportunity instead of a liability.
6. Always use the right tool for the job – You wouldn’t put a screw in with a hammer, so why would you plan with an execution system? Hacksaws are great for small jobs, and the same goes for spreadsheets! Know the limitations of your supply chain solutions, and make sure you invest in the right tools for the job.
5. Don’t waste time fixing lemons – Sometimes replacement is the best option. Don’t hesitate to abandon projects that have failed, as some problems just can’t be fixed. Maybe you’ve inherited a clunky planning system? You’ve got the talent to fix the problems you see, but it’s going to take years, and your company just doesn’t have that kind of time. Good bet you haven’t found all the problems yet either…
4. Know what you need – How many times have you gotten partway through a home improvement project and realized you don’t have the materials you need for the next step. You make a quick trip the hardware store, get home, and realize you forgot the glue! Combining supply chain planning with integrated project management tools can save you time and money by ensuring you make one trip to the hardware store instead of seven!
3. Don’t rely on the instructions – Just like your dad, you learn way more from your mistakes than from doing things by the book. While it’s important to know and understand industry best practices, they’re not always going to be tailored to suit your particular needs. If an industry recognized ‘best practice’ feels like a step backwards for you, don’t hesitate to use your experience to build something configured for your requirements.
2. Measure twice, cut once – Wouldn’t it be nice to know that board will fit before making your cut? The best planning systems allow you to simulate your changes before committing them, so you can see exactly what impact they’ll have. Something looks wrong? Back to the drawing board before making the final decision.
1. And finally, what’s the number one lesson your dad can teach you about supply chain? Go ask mom!
The post What your Dad can teach you about effective supply chain appeared first on The 21st Century Supply Chain.
Originally posted by Andrew Dunbar at http://blog.kinaxis.com/2015/06/what-your-dad-can-teach-you-about-effective-supply-chain/
In my first blog I wrote about the first step to reaching a Stage Five Supply Chain Planning System of Record (SCP SOR) which was securing the right talent.
SCP SOR Building Blocks
What is the necessary foundational planning layer required to support demand/supply planning for your industry?
There are specific functional requirements necessary for supply chain planning. The short list includes:
In more detail this can include:
Over the years, you have likely evaluated multiple vendors on their functional capability. However is this enough? Is it really about evaluating and optimizing each individual process?
And if everyone has the same building blocks what makes you unique? The maturity of your supply planning processes will differentiate you.
From my experience, the more mature supply chain organizations are focused on the integration of the functional capabilities, rather than solely on the individual function itself. They recognize that the whole is greater than the sum of the parts.
They often have differentiated and cohesive processes that they incorporate into their planning platform. This requires a SCP SOR that is configurable.
The Technology vendors all sound the same!
Finding the right SCP SOR technology solution is not easy especially when numerous vendors claim to provide all of the functional capabilities.
Having been in management positions in supply chain in my former life, I encourage you to ask vendors to prove it. Proof of concept workshops provide you the confidence you need to make the right decision.
I have always believed that it isn’t WHAT these vendors can do but rather HOW they do it.
The complexity, volatility and global nature of the supply chain require unique approaches to the HOW.
Make the right SCP SOR selection
A wise man once told me that the supply chain is the bank of the company. I agree! Supply chain leaders can drive breakthroughs in corporate performance – growth, productivity, profitability and overall shareholder value. Choosing the right SCP SOR can transform your company.
I also encourage you to consider every individual contributor in your organization. What do they personally need to be successful? If you provide your people with what they need when they need it and in a format that they can easily work with, good things will happen. Empower the many, not just the few.
I recall a Site Director once asking me how I was reducing inventory so quickly. What new initiative had I implemented? My reply was simple. I empowered my team with the right information to effectively do their job. They were able to make decisions quickly and effectively. People inherently want to do good work and are often crippled with technology.
Call to Action
Much of what I am writing is common sense. Unfortunately for many years I have seen executives bow to political pressure or take the ‘follower’ approach with the big name vendors. Today’s supply chain challenges require disruptive leaders selecting disruptive (but proven) technology.
Lora Cecere wrote a great article ‘Reflections on Integrated Supply Chain Planning’ where she has collected data validating that companies are deploying solutions from industry leaders and they are not delivering results. Perception is not reality. It is a great read.
The post Step Two: Stage Five Supply Chain Planning System of Record (SCP SOR) appeared first on The 21st Century Supply Chain.
Originally posted by Carol McIntosh at http://blog.kinaxis.com/2015/06/step-two-stage-five-supply-chain-planning-system-of-record-scp-sor/
So you’re an inventory manager, and your CFO just asked you to reduce inventory by 10% before year end to free up some capital for next year’s big investment in R&D. At first glance, it’s not so bad; you’ve got nine months to do it. But then you look at historical trends and see that lately, your inventory has been growing by 3% each quarter. Suddenly, you need to be about 20% below your current year end plan! That’s a big challenge! On top of that, you know you’d better do it without negatively impacting your customer service levels, because you can’t afford to spend all your time fighting fires for your customer service representatives.
So, what improvement levers can you pull to accomplish this goal? Do you have the authority to act on your own? Even if you don’t, you can be sure that you’ll be held accountable anyway!
Below are five levers that I believe should be available to an inventory manager to help them effectively plan and manage inventory. I’ll refer to Figure 1 below, a simple representation of the inventory of over time for a single part with safety stock, to explain the impact that each lever can have on your inventory levels.
Early results of our survey on inventory management (details below) indicate that many of these levers aren’t controlled by the inventory manager. This makes sense, as the changes to these levers can have significant impacts on other parts of the company. This means that to effectively manage inventory it is critical that inventory managers can collaborate effectively with other teams in their organization. This includes material planners, buyers, business management, master schedulers, demand planners, customer service, finance, sales, and marketing. It often takes a company-wide effort to achieve success. The inventory manager should have the tools to drive this collaboration and, where needed, increase awareness of inventory issues to promote understanding.
What else do you do at your company to improve the performance of your investment in inventory? Are there others key levers at your company? Please share them with me in the comments below.
This series on inventory management continues next week with a post on the key metrics that can help you get the most out of your inventory management process.
Interested in learning more about inventory management? Check out the rest of the blogs in this series.
The post Inventory Management Levers – Success Through Collaboration appeared first on The 21st Century Supply Chain.
Originally posted by Andrew Dunbar at http://blog.kinaxis.com/2015/06/inventory-management-levers-success-through-collaboration/
I love attending the Gartner Supply Chain Executive Conference. Much has changed in supply chain over the past 25 years, though there are many that date from that time, many of whom I run into at the conference, who would deny this. For me it is like a summer camp I have attended for many years. One of my younger colleagues walked with me through the hallways to a meeting and remarked afterwards that he thought we would be late because of the number of times I stopped to talk to people. What he doesn’t realize is that this is due to familiarity, as much as I wish it were true that his assumption of stardom was correct.
What continued presence at the conference has given me is the long view of how supply chain management, and my focus area, supply chain planning has evolved. When I first started attending the Gartner Supply Chain Executive Conference no one had a degree in supply chain management and vendors were not welcome. Most business people were in fact very unfamiliar with computers and the majority of the vendors had advanced degrees in Operations Research. Nevertheless the core focus was on process, with people (skills) coming second, and technology excluded from the conference. This year there must have been 50 exhibitors at the conference, some of whom were more focused on people and process, the majority of whom were focused on planning.
What I find strange in all of this is that almost always the central theme of the Gartner Supply Executive Chain Conference is about technological changes that will drive process changes and the need for skills development. This was as true this year as it was last year, and the years before. And yet within the community of supply chain practitioners the three horsemen of people, process, and technology are often portrayed as being in conflict. In fact the usual mantra is that you have to get the process right first, recruit/train to fill the roles, and then buy technology to satisfy the process. Hogwash.
So it was with great interest that I listened to the keynote by Guy Kawasaki in which he told the anecdote about refrigeration. Initially people would go out on the lakes during the depths of winter and saw out big blocks of ice and drag them into town. The limitation being that when you most needed the ice, during the summer, it wasn’t available, and that for much of the U.S., the south, ice was never available. Nevertheless a thriving industry developed. Along came someone with the technology to manufacture ice in factories in towns. Very few of the businesses that had thrived in harvesting ice from lakes survived this shift in technology. Why? They continued to use the processes and people familiar with harvesting ice rather than manufacturing ice. The ice manufacturers thrived because they used different processes. A couple of decades later the refrigerator was developed which meant people could make cold air – people mostly used ice to cool the air – and as much ice as they wanted at home. Guess what? None of the ice manufacturers survived because none of them adapted their process and people to the manufacture of refrigerators rather than manufacture of ice.
In other words we should be talking about symbiotic relationships between people, process, and technology, not a confrontational relationship. So it is with great pleasure that over the years I have seen a greater presence of technology in the presentations at the Gartner Supply Chain Executive Conference in both the end user and analyst presentations. I am still waiting for it to permeate the discussion to the point that people acknowledge the benefits could not have been achieved without the application of technology. What I find encouraging is that several larger companies are blurring the lines between business and IT, especially as the Millennials and Digital Natives come through the ranks displacing the Baby Boomers and Digital Immigrants. It’s not about the Digital Natives being tech savvy. It’s about the Digital Natives understanding that processes don’t have to be performed the ‘old’ way because technology enables different processes.
As the anecdote provided by Guy Kawasaki illustrates this has been true for some time, and the companies that did not adapt went out of business. And the stakes have always been high no matter the technology change. Of course Kawasaki’s focus was on the technology embedded in the product sold to consumers whereas my focus is on the technology that is embedded in processes used to manufacture and deliver the product. After all, that is the focus of supply chain. However Erik Brynjolfsson and Andrew McAfee of the Massachusetts Institute of Technology have been writing and talking for some time about the jobless recovery, which is the direct result of a lot of work being automated through the adoption of technology. Brynjolfsson gave a brilliant TED talk titled “The Key to Growth? Race with the Machines” in which he addresses this issue of a combative approach toward technology. He states that the first electric motors did not result in much of a productivity gain because all we did was replace the old steam engines. It wasn’t until 30 years later, when people who had grown up with the electric motor were now in power, that a complete redesign of the factory took place to enable new work processes that made the factories much more flexible and productive.
Of course the arrival of new technology is always a threat to people accustomed to doing things in a manner consistent with a prior generation of technology. Brynjolfsson gives a stirring call to action though. In his closing remarks he comments that since Garry Kasporov lost a chess match to a computer in 1997, no chess grand master has beaten a computer. This is what Brynjolfsson refers to as racing against the machine. He goes on to say that no chess computer has beaten a group of people playing as a team. This Brynjolfsson calls racing with the machine. What is the key ingredient provided by the humans? Team work, collaboration.
Which brings me back full circle to the long view of the Gartner Supply Chain Executive Conference. There are still some of the technology diehards that believe in hard numbers and optimization. But my sense is that there are fewer and fewer of them. They believe in racing against the machine in the sense that they believe that a computer can be programmed to produce a better result than humans under all circumstances. There are those in the Gartner analyst ranks who hold to this view. What I see in industry is much closer to Brynjolfsson’s concept of racing with the machine. The evidence of this is the adoption of scenario planning as a core tenet of planning systems. The machine is used to calculate the likely outcomes of certain actions under human guidance. The human is used to evaluate the trade-offs between alternatives. Team work, collaboration, nuance, and human judgment.
I look forward to next year’s Gartner Supply Chain Executive Conference very much. Undoubtedly there will be quite a bit of ‘rinse and repeat’. But each year the average age of the attendees stays fairly constant meaning there is new blood coming into the industry, and they are bring new ideas with them. Hopefully the ‘rinse and repeat’ will give them enough grounding to challenge and change the status quo. They need to because the stakes are too high to maintain the status quo.
The post Gartner Supply Chain Executive Conference – High Stakes in the Desert appeared first on The 21st Century Supply Chain.
Originally posted by Trevor Miles at http://blog.kinaxis.com/2015/06/gartner-supply-chain-executive-conference-high-stakes-in-the-desert/
Yes, we are talking about the supply chain planning system of record. The market is confused with terms; end-to-end, control tower, IBP, concurrent planning, integrated supply chain and planning systems of record. What really matters is what we are trying to achieve.
It has to start with the people.
There has been a lot of discussion on this topic. It can’t be overlooked. In my years of experience in the industry and working with software, people are still the difference makers. The supply chain has changed. Increased volatility, more complex supply chains, more competition, and big data.
Supply chain talent must understand and be able to interpret big data but solving problems still requires people collaborating to evaluate tradeoffs. Today’s unpredictability is less deterministic.
Collaboration is at the Core of the Talent Requirement
Morten Hansen, who wrote the book ‘Collaboration’, refers to T-shaped managers. People who can perform their own individual work very well (the vertical part of the T) and also contribute effectively across the organization (the horizontal part of the T). In the supply chain world I translate that to mean T-shaped people have the ability to collaborate across the vertical silos (order fulfillment, demand planning, supply planning, inventory planning, logistics, S&OP) to ensure that decisions made are directionally correct. Thinking deep and broad.
Leaders Need a Good Vision
Also required are visionary leaders. An overused term, but they are truly distinguishable and required for any company to reach stage five in any maturity model. Visionary leaders encourage innovative people, processes and tools.
They recognize that the supply chain has changed. There is an opportunity now to:
What about company culture?
Over the years I have worked with literally hundreds of companies and have had the privilege of meeting hundreds of supply chain leaders. Those that have been most successful in their supply chain transformation are those that are well informed, not afraid to take calculated risk, they encourage input, dialog and collaboration but provide direction. They are able to find the fine line between collaboration and decision making. They make the complex look simple.
There Has to Be a Healthy Balance Between Business and IT Leaders
The best supply chain transformations involve a healthy, respectful collaboration between Business and IT. Weak supply chain leaders cite IT as a barrier to success and weak IT leaders think they know what is best for the business.
I’ll never forget the time when an account executive I was working with felt like his life was in danger because the CIO of this multinational company was SO SO angry that the business was unhappy with their existing software and the CIO couldn’t accept the fact that it wasn’t working. It was definitely transferred aggression!
Employee Satisfaction Must Part of the Supply Chain Goals
I am fortunate to have worked with many successful companies. I met Avaya many years ago when they were still struggling with fulfilling orders to quoted leadtimes. They are much more demand driven now and have recently had some great success in their supply chain transformation. It is not a coincidence that they are just as much focused on employee satisfaction as they are on bottom line improvement. If you’d like to learn more about Avaya’s supply chain transformation, check out this recent case study published by Aberdeen Group.
The post Step One: Stage Five Supply Chain Planning System of Record (SCP SOR) appeared first on The 21st Century Supply Chain.
Originally posted by Carol McIntosh at http://blog.kinaxis.com/2015/06/step-one-stage-five-supply-chain-planning-system-of-record-scp-sor/
This is the second blog in my series on Inventory Management. You can find the first one ‘Are you getting the most out of your inventory management process?‘ is available here.
can be a challenging job! Inventory managers have to balance multiple conflicting priorities, support multiple internal and external customers, and are typically responsible for millions of dollars spread across multiple sites. They often manage their company’s single largest asset and receive little thanks for their efforts.
Unfortunately, many inventory managers don’t have the tools necessary to meet these responsibilities effectively. Supply chain complexity is increasing as companies find new ways to provide value to their customers. The inventory manager needs tools to exploit this complexity to get the most out of your inventory investment. All too often inventory managers are stuck spending all their time building reports and urgently responding to the latest shortage. They become experts at transferring and reallocating inventory to put out the latest fire, but can’t always track the true impact of their actions on the organization. Training and professional development is often sidelined to maintain focus on daily issues.
As companies increase the maturity of their inventory management process, the role of the inventory manager often evolves. The best planning systems provide users the ability to visualize and plan their inventory, monitor their inventory performance, predict issues before they happen, and prescribe improvements to maximize the benefits of your inventory. Once a plan is set, the system should alert the inventory manager so they can effectively respond where adjustments are required. With the right tools and training the inventory manager can evolve from a firefighter to an air traffic controller and become an expert at manipulating the levers that set a company up for success, not just today, but 3, 6, and 12 months from today.
The inventory manager’s dashboard should provide insight into things like historical, current, and projected inventory levels, customer service levels, predicted shortages, and risk of excess and obsolescence. It should also provide insight into the business processes that impact inventory. For example, excess and obsolete inventory is often the result of things not happening as planned, so the inventory manager needs to understand how well planners are balancing supply with demand and how much variability exists in the demand forecast. This information needs to be provided in a way that provides insight and facilitates collaboration so the inventory manager doesn’t have to rely on that last minute phone call to respond to change. Once the opportunities are identified, the planning system should support analysis, simulation, and collaboration to facilitate intelligent changes to the inventory plan with a complete understanding of the trade-offs involved in each decision.
Stay tuned for the next blog on the improvement levers available to inventory managers.
The post Is your inventory manager a firefighter or an air traffic controller? appeared first on The 21st Century Supply Chain.
Originally posted by Andrew Dunbar at http://blog.kinaxis.com/2015/06/is-your-inventory-manager-a-firefighter-or-an-air-traffic-controller/
It’s a simple question really. How confident are you in your organization’s supply chain, and its ability to actually perform in a way that supports your business needs? If you answered ‘not very’ you may be surprised to learn you aren’t alone.
According to the results of Deloitte’s third annual supply chain survey, a measly 38% percent of executives claim to be ‘extremely’ or ‘very’ confident their current supply chain has the competencies required to meet their needs. To me, that number seems frightening. It means almost two-thirds of executives aren’t confident about their supply chain’s capabilities!
What’s more, just 43% consider their supply chain organization to be ‘excellent’ or ‘very good’ when it comes to strategic thinking and problem solving.
But it’s not all bad news. Most of those surveyed recognize the rapidly changing landscape means they need to start increasing their supply chain’s capabilities. Deloitte asked respondents about what it calls 13 fast-evolving technical capabilities:
The vast majority, 94%, said they are currently using or expect to use Integrated Business Planning in the future, while nearly half have already implemented Supplier Collaboration and Risk Analytics. Of the 13 capabilities, Deloitte’s survey found just 27% of respondents are currently using Control Tower Analytics, but 53% they expect to use them in the future, while 37% are utilizing In-Memory Computing, with another 52% saying it’s something they’re planning on implementing.
In addition to adding new technical capabilities, respondents were also asked about the likelihood of making changes to their supply chain operating model over the next five years.
“Locating high-value added activities into Centers of Excellence” is a move that 48% say they’re ‘extremely’ or ‘very’ likely to make in the next five years. The survey gives Gartner’s definition of what exactly a ‘center of excellence’ is – “a physical or virtual center of knowledge concentrating existing expertise and resources in a discipline or capability to attain and sustain world-class performance and value across the supply chain.”
Many others expect to increase outsourcing of low value-added activities (44%), segment supply chain strategies and offerings with customer/product segments (42%) and align their physical network with an evolving customer footprint (41%).
Roughly one-third of executives also said their company plans to increase the span of control of their supply chain function over the next five years. Deloitte believes these changes aren’t just being undertaken for the sake of change, but rather, are in response to “a business environment of ongoing globalization, waves of disruptive innovation, and rising consumer expectations for “anytime, anywhere” service.”
Originally posted by Alexa Cheater at http://blog.kinaxis.com/2015/06/how-confident-are-you-in-your-supply-chain/
My wife and I just moved into our new home that we spent a good deal of our lifesavings building. We worked with our builder on every detail—windows, floors, paint, lighting—you name it. We met with so many of the tradespeople who invested so much time with us making everything just right—under my wife’s watchful eye I might add. Shortly after we moved in, one key decision that we were left with was which company to use to install and monitor our alarm system. You see, I travel a lot for work and knowing that all is well at home is something that’s pretty important to me.
These days there are so many security companies to pick from, each one trumping the other with the latest and greatest innovation. From controlling access from your mobile device, to motion detecting camera systems, the common thread is “innovation”. When securing your family and the things you cherish most, would you rely on old technology? Would “Hey, if we detect a burglar in your house, we will let you know tomorrow morning after our next batch run” make you feel good about your security company?
Shouldn’t the same go for your supply chain? Companies have invested hundreds of millions of dollars, pounds, euros and yen in supply chain planning systems since the late eighties. For a few, planning may have improved. For most, however, smart users have figured out ways of working around each of their disparate ERP and planning systems to make their businesses work. It is no secret that Microsoft Excel still remains the number one supply chain planning system in the world today.
So why not stay with the status quo, you ask? It has worked for me thus far, hasn’t it? Sure, your Excel worksheets are nice, but do they scale to the evolving needs of your business? By scale, I don’t just mean the amount of data it can handle – Microsoft fixed that issue by going to 1M rows with Office 2007. What I’m referring to is business process synchronization across different departments, geographies and groups in your organization. Are they all using the same planning processes? Are the KPI’s used by one department calculated differently for another? Do you have multiple versions of the truth when it comes to inventory? Are you capturing the vital qualitative data—assumptions, risks and opportunities—that went into past decisions? More importantly, is the historical information available to you when you need it? If you need to mine through your archive folder in Outlook to find the right revision of your worksheet, is that ideal?
Finally, what about Bob? Bob lives in every office. He’s that guy everyone on the planning team goes to for help. Bob knows every calculation in the spreadsheet and knows how it all works – what data comes from which ERP system, which macro needs to execute, and what broke in last night’s batch run. Bob’s the guy everyone is worried for when he crosses a busy street. Well let’s paint a more positive outcome for Bob. What if Bob wins the lottery tomorrow and decides that his golf swing needs some work… in Hawaii? Then what? I’m always amazed when I see large businesses—household names whose products we use every day—that rely on their own Bob or Jane. Do you identify with any or all of these issues in your organization today?
So how much would a system that can help you know sooner and act faster be worth to your business? In my world, it’s mandatory that the appropriate user be alerted the very instant a supply chain event occurs, and be allowed to take action. After tonight’s batch run, the information available tomorrow morning is stale and quite literally, yesterday’s news. Does anybody rely solely on newspapers these days to know what’s going on in the world? Sorry… I digress.
To offer customers superb service and maintain a competitive edge, planners need to know NOW. A supplier is going to be late with a delivery; a customer doubles the quantity of an order; a recall of a key component of a marquis product; I would want to know now. But not only do I want to know about the problem, I want my planning system to allow me to develop scenarios and take action… now! Shouldn’t this be expected in today’s world of Google and iPhone? Without this, aren’t we essentially stepping into our DeLorean—yes the one with the flux capacitor—and taking a trip back to the 90’s with Marty and Doc?
Originally posted by Dominic Thomas at http://blog.kinaxis.com/2015/06/is-knowing-tomorrow-good-enough/
Inventory is often the single largest asset on a company’s balance sheet and your inventory management process can have a huge impact on your organization’s bottom line. Understandably, the inventory management process is getting a lot of attention by organizations looking to squeeze out some extra profit in a challenging marketplace.
When you think about the priorities of your inventory management process, what’s the first thing that comes to mind? Is it reducing excess and obsolete? Improving on time delivery performance? Balancing stock between distribution centers? Strategic reduction of your lead times to help obtain and fulfill more customer orders? Now what’s your next priority? And the one after that? Your first answer is likely dependent on your industry, the size of your organization, your role, and your company’s corporate strategies. Your second answer, if you have one, is typically dependent on the maturity of your inventory management process. Finance and business management will prioritize inventory reduction to increase profitability. Customer service representatives prioritize stock-out reductions to improve customer satisfaction. Manufacturing operations needs just the right parts available at just the right time. The inventory manager is often caught between multiple groups with conflicting priorities and becomes an expert firefighter, skilled at supporting whoever complains the loudest. It’s easy for an inventory manager to get tunnel vision and give one metric too high a priority over others.
More mature companies will help the inventory manager out and define some clear corporate priorities, e.g. target inventory turns and customer service levels, to facilitate better inventory decisions. This can complicate things further as inventory decisions often require balance between these conflicting goals. The inventory quality ratio is emerging as a powerful tool to combine these priorities into a single measurement. Is that enough to find the right balance? Does your planning system help you analyze the trade-offs between competing priorities when making policy changes? Do your metrics and KPIs provide insight that help you improve the quality of your inventory investment?
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The post Are you getting the most out of your inventory management process? appeared first on The 21st Century Supply Chain.
Originally posted by Andrew Dunbar at http://blog.kinaxis.com/2015/06/are-you-getting-the-most-out-of-your-inventory-management-process/