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2017
by Melissa Clow

Concurrency: The New Era of Supply Chain PlanningI’m happy to share that the following recorded webcast is now available: Concurrency: The new era of supply chain planning with Kevin O’Marah, Chief Content Officer, SCM World and Trevor Miles, Vice President of Thought Leadership, Kinaxis.

 

Future supply chain leaders will look back at 2016 as the end of an era. Spurred by unprecedented disruption, volatility and technology evolution, leading organizations are abandoning outdated, overly rigid supply chain planning processes and moving towards the future of planning: concurrency.

 

In this webcast hear O’Marah’s predictions, insights and best practices for bringing concurrent planning to your supply chain operations, including:

 

  • Defining concurrent planning, the factors driving it and the three foundational capabilities it’s built on
  • Discussing the magnitude and pace of change expected in supply chain strategy, planning and decision-making; and
  • Sharing the most innovative strategy and planning case study examples from leading supply chain organizations

View now

 

The post On-demand SCM World webcast – Concurrency: The new era of supply chain planning appeared first on The 21st Century Supply Chain.

 

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Originally posted by Melissa Clow at http://blog.kinaxis.com/2017/01/demand-scm-world-webcast-concurrency-new-era-supply-chain-planning/

by Iman Niroomand

optimization in supply chainSupply chain processes and transactions have been captured and automated by IT solutions. The process automation will help the supply chain planners and practitioners to do and track the operation tasks easily.  While these innovations would reduce the planners daily job hassle significantly but not necessary would help planners to get the most efficient and optimal solutions.

 

The planner requires a way to translate operational requirements and constraints into something that computer can understand and use to produce not just a solution but an effective solution. Let’s call this requirement, an operational model.  For example, the shipment of products into loads of a truck is an example of loading model. A very simple model uses product’s weight and volume as a loading requirement and produces an efficient load profile for shipment. One might ask, why this efficiency is matter and how we could gain this efficiency.

 

For a company that ships billions of pounds of material each year to thousands of customers, shipping costs are a significant components to the cost of finished goods. Thus, small improvement on the shipment efficiency easily will add up to a significant cost saving and provides strong competitive advantage for the company. Now, let’s see through a small example how the shipment could be improved.

 

Let’s assume a transportation manager currently deals with a constraint of weight and volume. He loads one truck to max weight and load another to maximum number of pallets. Although this load profile is OK when considering one truck at a time, since we reached to one of our constraints, but in reality the first one has more room and second one could take more weight. It is apparent that the loading profile could be improved and by doing so more items could be shipped in one order.

 

The calculation of the best loading profile is non-trivial, assume one shipment and loading requires several trucks, the planner could spend enormous amount of time to come up with the best plan or close to the best plan, however, a computer through a model could solve this complex problem easily and provides the solution to the planner in manner of seconds.

 

The model development needs a special attention. In supply chain, there are a lot’s of variability which often leads to errors in model result and poor supply chain decisions and easily could disappoint the decision makers. Therefore, there are some crucial elements in developing a model that must be observed. First the data must be accurate and comprehensive. For example the weight and volume of the items for given example must be accurate and up to date. Second the process must support optimization and ability to improve continuously. It simply means the process requires systematic monitoring of data, models and algorithm performance to support and continuously improve supply chain and logistics optimization.

 

Nonetheless, if the optimization models are developed according to the operation requirement and integrated with supply chain operational process then it would provide an opportunity to reduce the operation cost by 10% to 40% through an efficient and better decisions.

 

 

 

The post Essence of optimization in supply chain and logistics appeared first on The 21st Century Supply Chain.

 

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Originally posted by Iman Niroomand at http://blog.kinaxis.com/2017/01/essence-optimization-supply-chain-logistics/

by Duncan Klett

End-to-end supply chainSupplying products to customers is clearly important. If you can’t satisfy the needs of a prospective customer, that prospect can easily buy from someone else who can deliver what they want, when they want it. Lost sales and additional expediting costs hit your bottom line.

 

At one level, end-to-end supply chain success is simple: get the right stuff to the right place at the right time. So, what’s hard about that?

 

The answer is “lots”. Products change. Customers order at the last minute and change their orders. On-line customers expect their product to be shipped, if not delivered, on the day they place the order. Supplies don’t arrive as expected. Supply chains typically use several layers of companies, manufacturing sites, and warehouses between raw materials and customer delivery. The number of products and the number of units of those products produced are enormous: 5 million integrated circuits a day, 35,000 vehicles per day, 3,000 major appliances per day.

 

I recall a visit to an electronics manufacturing facility in Juarez, Mexico. Every week, amongst other products, they made about 200,000 units of a consumer electronics product. They did this despite having to manage an average of 30 production changes to that product every day! How did they do it?

 

1. Communication

Every insight you can gain regarding potential changes and disruptions will help you manage your supply chain to accommodate them:

 

  • Be sure your staff knows what to do and how to do it in order to keep product moving smoothly.
  • Establish relationships with your internal or partner staff responsible for developing product and production methods. Seek advance notice of any changes you might need to handle.
  • Establish relationships with your suppliers and their suppliers through as many layers as possible. Track projected supply availability and limitations. Collaborate with them so they also know what you are likely to need.
  • Establish relationships with your customers and their customers through as many layers as possible. Collaborate with them so you are more prepared for demand changes and other drivers which might change your requirements.

2. Focus on Flow

Keep material flowing. Items sitting on a shelf are not making you any money. Stock only helps you to the extent you need it to cover variations in your supply or demand. Everything else should be progressing towards delivery to your customer. This is one of the basic concepts of a “Lean” process.

 

3. Invest in Data Quality

As your operation grows, the volume of data you rely on grows exponentially. That data can be your key to success. It can also lead to disaster unless it is accurate and consistent. For example, if the name for a part in your supply data is ABC but A_BC in your demand or customer’s data, or worse, XYZ, then you will have more and more trouble recognizing which supply you can actually use to satisfy which demand. This might seem to be obvious and unlikely. However, it is common for large (and even small) companies to have different part numbers for the same part. As you migrate towards being a digital operation, that system can only operate if you have accurate and consistent data.

 

4. Segment Your Products and Processes

Recognize that different products have different characteristics within their supply chains. Often, even the same product sold into different markets will require different supply chain strategies. Therefore, although management principles are the same, actual execution practice should be quite different. Categorize your products and then align your supply chain management processes to match the characteristics of those products. For example, some of your products might have steady demand over long periods of time. Others might have ready supply on short notice. On the other hand, some of your products, such as seeds, might only be produced over a short time frame, yet might have demand over a similarly short time frame – but at different times of the year. Clearly, your strategy for managing these products must be different.

 

Segmentation ties back to the Mexican factory I mentioned earlier. Production in the Juarez plant was allocated to products with highly volatile demand and rapidly changing designs so the company could respond immediately to changes for the North American market. A sister plant, in the Far East, produced steady volumes of stable products where seven weeks crossing the ocean would not be a problem.

 

People, Processes and Tools

These four steps might sound simple. In reality, they are anything but simple! Supply chains are difficult to manage because they must operate despite constant change.

 

Your challenge is to establish a team of supply chain professionals who can navigate the changing environment. You then need to equip them with tools and processes so they can execute strategies to deliver products while handling all manner of changes and still keep your costs under control.

 

The post Four Steps to End-to-End Supply Chain Success appeared first on The 21st Century Supply Chain.

 

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Originally posted by Duncan Klett at http://blog.kinaxis.com/2017/01/four-steps-to-end-to-end-supply-chain-success/

by Teresa Chiykowski

Closed Today. Fresh out of Supply Chain Talent.

Future of supply chain management

There’s no time like the present to talk about the future of supply chain management. That was the perfect lead-in for a great Supply Chain Insights webinar I attended recently – Journey to Supply Chain 2030.

 

Admittedly, 2030 is a few years out. Sometimes it’s difficult to predict what’s going to happen next week let alone 14 or 15 years down the road. But here’s the thing about supply chains: Today’s supply chains are the result of what we’ve done in the past; tomorrow’s supply chain will be the result of what we’re doing today. So it’s time to get planning.

 

Technology, digitization and automation are dramatically changing the supply chain. The cloud and massive streams and lakes of data are making for a vastly different way of managing operations. The manufacturing firms that continue (successfully) into the future must possess the “talent” with the right competencies, and the “strategic thinking and problem solving” abilities to deal with the new and increasingly more complex supply chain.

 

But, how confident are firms that they’ll have this workforce at the ready? Not very. In Deloitte’s 2015 Supply Chain survey of 400 executives, only 38% of respondents say they have the competencies they need today. And that doesn’t even consider the future.

 

The shifting talent landscape

As uncertain as the future is, we are aware of some of the realities reshaping the talent landscape. Seasoned and experienced workers (the baby boomer generation) are leaving the workforce in droves, while millennials are entering the workforce en masse. According to Pew Research Center analysis of U.S. Census Bureau data, more than one-in-three American workers today are millennials (adults ages 18 to 34 in 2015). In 2015, Millennials surpassed Generation X to become the largest share of the American workforce.

 

What does this mean for the supply chain?

 

Once you’ve got the talent, baby, you’ve got to do everything to keep it.

 

This is a tall order when looking at the youngest members of the workforce who have a high propensity for job hopping. The 2015 Millennial Majority Workforce Study underscores this some compelling stat: 53% of managers say it’s difficult to find and retain millennials. 58% of millennials expect to leave their jobs in 3 years or less.

 

Gone fishing: Dealing with the talent gap

With baby boomers trading in office desks for the golf course, fishing, scrapbooking, woodworking or some other past time of choice, what will become of the middle-to-senior supply chain? Answer: There will be a gaping whole.

 

How do we create the great managers and leaders running the rapidly changing and exponentially more complex supply chain environment?

 

Good question.

 

It’s a challenge that many institutions, professional societies and universities are struggling with. Learning institutions are good at delivering the “functional” expert (i.e. the solver), but who will be the strategist and critical thinker who asks the right questions?  Charles Kettering (1876-1958), inventor and head of research for GM said, “A problem well-stated is a problem half-solved.” Who will be the supply chain people asking the questions and stating the problems in your organization?

 

That brings us back to millennials.

 

Suffice it to say, companies can be proactive today with strategies that align with millennials as well as business goals. Here are a few of them.

 

Make supply chain sound really, really cool

The supply chain profession tends to get a bad rap. You don’t hear kids saying, “Mom, when I grow up, I want a career in supply chain planning.” You don’t hear parents bragging that, “My daughter married a supply planner.”

 

Organizations need to work collectively with colleges, universities and high schools to educate students on the benefits of working in the supply chain profession. For example, tout the fact that many of today’s supply chains use leading-edge technology to make the world’s best and most recognized products (including all those electronic devices millennials are so attached to). Traditional enterprise resource planning systems are giving way to cloud-based supply chain planning software to drive unprecedented collaboration, cooperation and innovation. Now, you can’t tell me that doesn’t sound sexy.

 

Why am I here? Give millennials a sense of purpose

Millennials are purposeful peeps. Once you get them, you want to keep them. Interestingly, money isn’t the be all and end all to them. Have you heard of the purpose gap?  Deloitte defines it as the difference between what millennials want out of business and what business offers them. In its Millennial Survey 2016, Deloitte reveals that millennials believe businesses are focused on their own agenda rather than helping to improve society. That’s simply not the type of purpose that will attract and retain talented and high-potential millennials.

 

What that sense of purpose is will vary from individual to individual. It could be making the world a better place or understanding how their contributions impact the company.

 

Is purpose clear and well-articulated internally and externally in your organization? If you want to attract and hang on to millennials, purpose should be an integral part of your culture – and captured in your mission, vision and values, and then linked to individual and organizational goals.

 

Provide opportunities for new experience and growth

If millennials are to become tomorrow’s successful senior managers and leaders, they need experience –not just in one functional area, but across the organization.

 

Through job rotations, millennials can get valuable exposure to every part of the supply chain, from procurement and sales to logistics and operations. By understanding all facets of the supply chain environment, they can become more strategic and able to take a holistic view of how things are run. It’s the stuff great leaders are made of. As an effective HR strategy, job rotations also help managers explore hidden talent and employees explore their interests (which is great for employee satisfaction and retention).

 

What’s another way to close the skill gap and make a well-rounded supply chain expert? Implement cross-training programs with seasoned supply chain veterans – those experienced individuals who have come up through the ranks of the organization helping to sustain the lifeblood and vitality of the organization.

 

Communicate that failure isn’t necessarily a bad thing

Now for some final words. Don’t punish failure. Let’s be clear here. I’m talking smart failures not dumb ones. Dumb is being told something will fail and then doing it anyway. Smart failures are those times when you take a risk, it fails and you learn from it. If millennials aren’t given the freedom to explore, spread their wings and try new things, they’ll fly the coop. And with them will fly all the great potential, enthusiasm and innovation that can fuel your journey to the supply chain of future.

 

What are your strategies for building a workforce for the future? We’d love to hear your thoughts.

 

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

 

Concurrency - New Era of Supply Chain Planning

 

Originally posted by Teresa Chiykowski at http://blog.kinaxis.com/2017/01/future-supply-chain-management-2/

by Teresa Chiykowski

This is the second blog post in our three-part series discussing ways to improve supply chain collaboration.

 

S&OP processIn my first blog post in this series, I touched upon one of the biggest challenges companies operating global supply chains face today. I’m talking about the disconnect between the data, processes and people in the supply chain and how it inhibits collaboration and the ability to make the best decisions quickly.

 

My last post focused on connecting data. So today, I’m going to do a deeper dive into connecting S&OP processes.

 

The challenge: Disconnected sales and operations planning processes

Today’s supply chain processes and functions operate in silos.

 

What I mean by “silos” is that, across organizations, managers are responsible for one specific department, each with different priorities, responsibilities and objectives. As a result, managers aren’t aware of what other departments are doing in terms of their goals and priorities.

 

When operations are siloed, there’s an absence of communication and collaboration between departments, divisions and business units. Each takes a vertical approach to reporting. Individual, functional metrics are tracked, instead of taking a horizontal view that gives insight into the health of the supply chain network and interdependencies of the individual functions.

 

Consider these questions…

 

  • How many companies would commit to a demand plan creating a 50% overload on a critical resource?
  • How many organizations would take steps to deliver an order on time at the expense of margin?

Making these kinds of decisions requires easy access to demand, supply, capacity and inventory data. But having the right data is only one part of the equation; having the right processes in place is another. If organizations spend too much time firefighting and too little on exception management, their decision-making abilities will be hindered.

 

The solution: Cloud-based planning and response systems

Continuously planning, monitoring, and responding within a single environment increases collaboration across business functions. Companies that achieve this level of cooperation cut risks and make faster and better decisions. According to a recent TechValidate survey of supply chain stakeholders, 66% of respondents were able to achieve these benefits using a cloud-based planning and response system.1

 

Cloud-based solutions support the supply chain with the process orchestration and task flow capabilities organizations need to document and monitor processes. With data and analytics brought together in a single place, organizations have the ability to plan concurrently. There’s no need to pass data from one silo to the next to get the right answer. All the analytics to support demand and supply balancing are always “on”, enabling stakeholders to immediately see the impact of any change or decision.

 

If you want to learn more about how to connect supply chain processes to drive better collaboration, have a read through the eBook: 3 Ways to Improve Supply Chain Collaboration.

 

Stay tuned for our next post about disconnected people are inhibiting supply chain collaboration.

 

1 Kinaxis TechValidate Survey, October 2015

 

The post Improving Supply Chain Collaboration: Connecting Processes appeared first on The 21st Century Supply Chain.

 

Concurrency - New Era of Supply Chain Planning

 

Originally posted by Teresa Chiykowski at http://blog.kinaxis.com/2017/01/improving-supply-chain-collaboration-connecting-processes/

by Palvashah Durrani

supply chain communicationIn our digitally connected world – information is easy to access, available on demand, and of varying levels of quality and veracity. While being connected means it might be difficult to escape the latest zeitgeist, it also means that you are aware of your current context and fragments of the world around it. And, if you want to step out of what you passively receive – you can actively chase down countless threads of inquiry to learn more.

 

Integrated supply chains take advantage of these multi-threaded inquiry patterns by coordinating across supply chain functions, however, how interconnected is communication in your processes? Can you reach across your supply chain to achieve diverse and innovative solutions in just six steps or less?

 

One way to enhance your communication channels is to engage in group problem-solving. Yes, you might do that currently across teams; you might even engage external stakeholders such as suppliers or distributors when resolving a shipping challenge or similar issue. To truly integrate communication across your supply chain, consider involving both internal and external stakeholders at other stages—not just when there’s a problem to resolve. For example, engaging a supplier in prototype design can ensure a more effective and feasible design with a tighter price point. Or involving marketing at the production stage can provide them with a better understanding on the product’s strengths and thereby help them to improve their messaging to customers. With differing experiences, knowledge, and points of view—these fully integrated teams can synthesize novel solutions and initiatives that might not have been born in isolation.

 

Another way to improve communication across your supply chain is establish parallel views of data and real-time communication for stakeholders. When everyone is looking at the same data at the same time, they’re all the same starting line together. Less time is spent on clarification and more times can be spent on picking apart the issue, proposing solutions, and synchronizing strategies.

 

A third way to weave communication tighter into an integrated supply chain is to actively collect and catalogue tribal knowledge. This encourages free information flow while at the same time assuring that that knowledge is readily available outside of any silos and that it can be used as an effective learning tool for your organization.

 

And so, six degrees of separation, where solutions, people, and processes in your supply chain are six or fewer steps away from one another in an interconnected chain, is achievable with strong and targeted set of communication channels.

 

The post Six Degrees of Separation in your Supply Chain appeared first on The 21st Century Supply Chain.

 

Concurrency - New Era of Supply Chain Planning

 

Originally posted by Palvashah Durrani at http://blog.kinaxis.com/2017/01/six-degrees-separation-supply-chain/

Kinaxis

Running on autopilot

Posted by Kinaxis Jan 16, 2017
by Alexa Cheater

The growing role of AI in supply chain management

artificial intelligenceRapidly evolving technology and a digitally focused world have opened the door for a new wave of automation to enter the workforce. Robots already stand side-by-side with their human counterparts on many manufacturing floors, adding efficiency, capacity (robots don’t need to sleep!) and dependability. Add in drones and self-driving vehicles and it’s no wonder many are questioning the role of humans going forward.

 

Supply chains, although automated to a degree, still face challenges brought about by the amount of slow, manual tasks required, and the daily management of a complex web of interdependent parts. The next generation of process efficiency gains and visibility could be on your doorstep with artificial intelligence in supply chain management, if only you’d let the robots automatically open it for you.

 

History of automation

Mankind and machines have worked in harmony for decades, with some citing Henry Ford’s adoption of the assembly line way back in 1913 as its early beginnings. Fittingly, D.S. Harder, an engineering manager at the Ford Motor Company, officially coined the term ‘automation’ in 1946, using it to describe the increased use of automatic devices and controls in mechanized production lines.

 

The race for automation supremacy set off a race for the ‘lights out’ factory among many rival automobile companies. The idea was to automate all tasks with no human presence required on-site. Production could happen continuously 24 hours a day. It is still the dream of many manufacturers today.

 

Thanks to automation’s roots in the industrial revolution, many associated the term with mechanical production lines and warehouse floors. But more recently a number of significant developments in various other fields have led to an expanded definition. The digital computer, improvements in data-storage technology and software, advances in sensor technology and the derivation of a mathematical control theory – all have contributed to progress in automation technology outside traditional manufacturing.

 

Driving further advancements in automation was the development of integrated circuits in the 1960s, which propelled a trend toward miniaturization in computer technology. That led to smaller, less expensive machines also capable of performing calculations much faster, providing a major advantage to those companies able to implement these new automation technologies.

 

As Robert Bowman from SupplyChainBrain points out, “The focus up to now has been largely on repetitive, transactional processes, in warehouses as well as on the production line.” But that’s beginning to change. We’ve entered an era where automation is extending to processes. It’s no longer just a case of swapping out humans for machines.

 

Robotics process automation

Robotics process automation (RPA), as defined by Wikipedia is, “an emerging form of clerical process automation technology based on the notion of software robots or artificial intelligence (AI) workers.” It goes beyond physical systems and provides the glue that when looked at from a supply chain perspective integrates multiple systems dedicated to order taking and fulfillment.

 

RPA works by automating the end-to-end supply chain, enabling the management of all tasks and sections in tandem. It allows you to spend less time on low value, high frequency activities like managing day-to-day processes, and provides more time to work on high value, exception-based requirements, which ultimately drives value for the entire business.

 

PwC estimates businesses could automate up to 45% of current work, saving $2 trillion in annual wages. “In addition to the cost and efficiency advantages, RPA can take a business to the next level of productivity optimization,” the firm says. Those ‘lights out’ factories and warehouses are becoming closer to a reality.

 

Four key elements need to be in place for you to take full advantage of robotic process automation in your supply chain:

 

  • robots for picking orders and moving them through the facility;
  • sensors to ensure product quality and stock;
  • cognitive learning systems;
  • and, artificial intelligence to turn processes into algorithms to guide the entire operation.

In addition, you’ll need strong collaboration internally and among suppliers and customers to tie all management systems back to order management and enterprise resource planning platforms.

 

Driving the competitive edge

A study by MHI and Deloitte found more than half (51%) of supply chain and logistics professionals believe robotics and automation will provide a competitive advantage. That’s up from 39% last year. While only 35% of the respondents said they’ve already adopted robotics, 74% plan to do so within the next 10 years. And that’s likely in part to keep up with key players like Amazon, who have been leading the robotics charge for the past few years.

 

Global Annual Investment in RoboticsIn advance of Cyber Monday, the online retail giant threw open the warehouse doors to provide an inside look at the robots helping to automate the most mundane parts of filling online orders. It’s been four years since Amazon spent $775 million to acquire Kiva Systems, a Massachusetts-based startup that makes warehouse robots and software. Now more than 30,000 Kiva robots roam the aisles of 13 Amazon fulfillment centers to help speed up warehouse operations and decrease labor costs. It’s no wonder smaller players are looking to get in the game and apply these same benefits to their own supply chains.

 

As outlined in a Business Insiders article, the growing investment in automation and robotics only provides further proof it is the way forward.

 

Robots are becoming cheaper and easier to deploy thanks to less expensive sensors and free open source software. They’re also becoming safer for humans to work alongside, improving safety with the rise of real-time data processing to “see” their environment and avoid any collisions that could injure someone nearby.

 

Benefits of automation

Robots don’t slow. They don’t tire. They don’t get injured, distracted or sick. And they don’t require paychecks. They increase efficiency, reduce downtime and improve accuracy. Provided of course they’re calibrated correctly. RPA allows stakeholders to collaborate and simplifies the flow of products and related information. It can ultimately improve working capital and lower the cost to serve across the entire supply chain.

 

Smart machines are already capable of self-diagnostics, and with added connectivity features can now report on when they need service, estimated life spans and more. Imagine the possibilities. Your equipment could soon be able to tell you exactly when it needs servicing, how long the downtime would be, and provide an estimate as to when end of life will become a factor. Improvements to AI also mean these smart machines could take things a step further, seeking ways to improve their own efficiency and making recommendations on how best to manage day-to-day operations.

 

When it comes to supply chain, the possible role of automation extends well beyond manufacturing and logistics. Automation could eventually be the brain behind your supply chain – the autopilot who navigates planning and fulfillment activities, monitors inventory levels and adjusts safety stock. Thanks to advanced algorithms, we may not be far off. Some supply chain software already has the capability to compare multiple scenarios side-by-side and make recommendations on which course of action may be the best. Add in the ability for that same software to connect and share data with the smart machines on the manufacturing floor, and you may be left wondering if your role in supply chain is about to become obsolete.

 

Where’s the humanity?

Automation should be embraced, not feared, but if you’re concerned about job safety, that’s a whole lot easier said than done. While roles and responsibilities within your supply chain are likely to shift, we’re not at a place where automation can eliminate the human element, and I’m not just talking about engineers required to maintain and repair any faulty robots.

 

“Kiva’s doing the part that’s not that complicated. It’s just moving inventory around,” says Dave Clark, Amazon’s vice president of worldwide operation. “The person is doing the complicated work, which is reaching in, identifying the right product, making sure it’s the right quality, making sure it’s good enough to be a holiday gift for somebody.”

 

That’s where humanity still plays a vital role. Currently, machines can only base decisions and recommendations based on programed algorithms. But there’s something to be said for gut feeling, and knowing soft information not included in the data set. When you consider things like how an order change will alter the sentiment of your relationship with a customer when you factor in soft skills, it becomes evident you still need human judgement in your supply chain. At least for now.

 

Automation in supply chain planning

As noted earlier, the focus of automation in supply chain has largely been on the execution side – manufacturing, logistics, order fulfillment. But the practical application of automation in supply chain planning has largely been overlooked. Once again, Amazon is on the cutting edge. The company reportedly already employs 1,000 people in artificial intelligence, with many likely working on Echo, a wireless speaker that listens to you and speaks back. It can turn off the lights, report on traffic and order things, but backed by artificial intelligence could become something far more than a novelty device.

 

As Kevin O’Marah, the chief content officer at SCM World, explains, “What Amazon is positioning itself to do is far more ambitious and involves what AI experts call ‘contextual awareness’. This means knowing not only the what, but also the when, why, where and how of consumer need. The long game is all about selling us not just what we want, but what we need, and probably before we realize we need it.”

 

Amazon has moved well beyond just sensing and responding to demand. It’s developing a complete picture of each customer, and the personal data collected will help future AI applications to know the difference between what you want, and what you need.

 

AI and prescriptive analytics in supply chain could lead to revolutionary breakthroughs, including automating the decision process. This concept goes far beyond just having software that runs scenarios and shows you ranked results of their outcomes, but lets the machines (in this case computers) actually make the decision entirely, and then filter that control command down through the rest of the supply chain. It’s opening the door for a conversation around optimization versus human judgement.

 

The rise of AI

According to Amazon’s CEO Jeff Bezos, advancements in AI require three technology foundations:

 

  • Algorithms
  • Compute power
  • Training data

The first two have been around for decades, but the third is where Amazon sees the most value. And that training data is coming directly from consumers who purchase through the online retailer. It’s where the idea of contextual awareness comes into play. Combine that with technology able to sense and respond, and you have AI that’s capable of understanding complex cause and effect, and taking appropriate actions to reach a desired outcome. Ironically, as is the basis for so many sci-fi movies, machines equipped with AI are also heading down the path of being able to determine what those desired outcomes should be.

 

From personal assistants like Siri to stock trading to medical diagnosis, AI is able to learn from seemingly unstructured data, take decisions and perform actions in a way previously unimagined. With the endless possibilities of learning from the 2.5 quintillion bytes of data generated every day, it’s well on course to making the implausible a reality. That could be why more supply chain executives are starting to take note.

 

artificial intelligence impact on supply chain strategy

 

With the growing trend toward digitization in supply chain, AI could be the next arena where organizations can look to differentiate and drive revenue growth. According to Accenture’s digital operations survey, 85% of organizations have adopted or will adopt digital technologies in their supply chain in the next year.

 

AI is how companies will analyze all the big data associated with digital technologies in order to gain a better understanding of their end-to-end supply chains. That analysis will drive anticipation of future scenarios, effectively reducing time to market and driving more agile supply chains capable of dealing with uncertainties.

 

As Manish Chandra and Anand Darvbhe of Accenture Strategy point out, “The use of AI in supply chains will ultimately result in spawning an ecosystem where supply chains link themselves with each other, enabling seamless flow of products and information from one end to the other.”

 

Automation and AI in your supply chain is an important evolutionary next step you can’t ignore. It’s what will allow you to spend less time on repetitive processes, such as planning, monitoring and coordinating, and focus more on innovation, growth and those unexpected exceptions.

 

What role do robotics, automation and AI play in your supply chain? Let us know in the comments area.

 

The post Running on autopilot appeared first on The 21st Century Supply Chain.

 

Concurrency - New Era of Supply Chain Planning

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2017/01/artificial-intelligence-in-supply-chain-management/

by Alvaro Fernandez

Internet of thingsLately, tales of how the Internet of Things (IoT) have become a common staple of tech conversations. IoT devices have the potential to produce humongous volumes of data (a reason we usually hear Big Data and IoT in many presentations). We like to picture zillions of sensors generating gazillions of bytes, while the CIOs are tasked to find ways to handle the impending data tsunami.

 

But, will this Big Data ever be useful in real-time? Whether it is stopping that self-driving car from hitting that seemingly unaware pedestrian, or changing a delivery drone route based on last minute weather information, there will be some moments where a huge amount of data won’t necessarily make a significant difference on the immediate outcome. This will be the territory of smart devices.

 

And no, your smartphone is not a smart device. These are incredible tools enabling us to become more productive (When you have the right tools in supply chain planning you can be.), but they are helpless without us. They are attention-seeking toddlers, capable of many things. But they have no clear definitions of good or bad behaviors, and they have no sense or purpose without someone there to guide them. I can’t tell my phone to go charge himself, I can’t tell him to make me a coffee, and certainly I wouldn’t trust it talking to strangers all by itself.

 

Same thing applies to many of the “smart” devices that help us drive our production lines and distribution routes. If we really want to step up our supply chain game, we need these devices to grow and become reputable members of the IoT society.

 

These devices will need to be capable of performing unassisted tasks involving some levels of uncertainty and be able to take care of themselves (self-preservation) while providing for the family (generating revenue), all while hopefully not hurting any human in the process (Skynet might disagree). They will also need to be capable of something that is not that easy for even humans to do: trusting others and being trusted by its peers, collaborating and competing, and pushing the envelope all the way it can go and then some.

 

To achieve this, artificial intelligence (AI) is not enough. After all, we, the intelligent humans, require tools to assess the trust we place on others. There’s a reason we have things such as police and credit score checks, as well as auditable accounting books. Machines will need a hand when looking to trust (or not to trust) other machines. If only we had such a technology, right?

 

Well, it turns out there is a promising one. It’s called Blockchain, a technology the Economist recently labeled as the trust machine, as it “lets people who have no particular confidence in each other collaborate without having to go through a neutral central authority. Simply put, it is a machine for creating trust.

 

Yes, you read right, they mention people, but this is being extended to machines, too. An example is this delivery, made using a drone enabled with a blockchain-registered chip, where the creators claim the drone was able to identify itself to the “self-authenticate with a computer-controlled window and gain access to a private residence in order to deliver a package.” To me, this sounds like a teenager climbing into your window – both exciting and a bit scary at the same time.

 

We are not there yet, but this is more than just programming a drone to perform a delivery. We can do that already thanks to Amazon. This is about being able to tell a device to perform a task, without having to break down every single task involved. Eventually, I could tell the drone to go deliver a package to X address without having to program beforehand the platform it will pick it up from, the path it should take, which recharging station to use and so on. Let the devices figure it out. But what if someone comes and tells them to do otherwise (i.e. hacking)?. Well, if the right incentives are in place, they would have to figure out the right thing to do, as they would have a reputation to maintain. Bad behaviors will cost them (imagine if spam mailers had to pay a penny for each mail they deliver), and since they will no longer be considered “children” anymore, they could be rewarded or punished accordingly.

 

Look, the technicalities behind the Blockchain, the current backbone of the Bitcoin cryptocurrency, are not for the faint of heart. All the coding and cryptography involved are no small pills to swallow. It doesn’t help much that Bitcoin has been associated with shady deals. But, as the Economist points out, a similar thing happened with the file-sharing Napster, which long ago perished but whose underlying technology (peer-to-peer or P2P) endured and ended up in the backbone of serious (and legit) businesses. Blockchain could give IoT devices a chance to obtain an identity, to be able to cooperate and transact without our assistance, a chance to grow up and carry on business out of our sight. That’s a pretty exciting thing that could happen in our lifetimes… if we let them grow.

 

Now it’s your turn, have you heard about Blockchain before? What are your thoughts on the possibility of having increasingly independent, yet cooperative devices?

 

The post Internet of Things Devices: It’s Time to Let Our Devices Grow appeared first on The 21st Century Supply Chain.

 

Concurrency - New Era of Supply Chain Planning

 

Originally posted by Alvaro Fernandez at http://blog.kinaxis.com/2017/01/internet-things-devices-time-let-devices-grow/

by Melissa Clow

I’m excited to let you know about an upcoming webcast with SCM World’s chief content officer, Kevin O’Marah. In this not-to-be missed webcast, hear O’Marah’s predictions, insights and best practices for bringing concurrent planning to your supply chain operations.

 

Event Details:

 

This live webinar takes place on Tuesday, January 24, 2017, 1 – 2:00 p.m. ET | 6 p.m. UTC

 

Future supply chain leaders will look back at 2016 as the end of an era. Spurred by unprecedented disruption, volatility and technology evolution, leading organizations are abandoning outdated, overly rigid supply chain planning processes and moving towards the future of planning: concurrency.

 

Join this live webcast with Kevin O’Marah, chief content officer, SCM World, as he shares predictions, insights, and best practices for achieving success in this new era of supply chain planning, including:

 

  • Defining concurrent planning, the factors driving it and the three foundational capabilities it’s built on
  • Discussing the magnitude and pace of change expected in supply chain strategy, planning and decision-making; and
  • Sharing the most innovative strategy and planning case study examples from leading supply chain organizations

Registration is free. Reserve your spot for this complimentary webcast.

 

 

 

The post Live Webcast – Concurrency: The New Era of Supply Chain Planning appeared first on The 21st Century Supply Chain.

 

Concurrency - New Era of Supply Chain Planning

 

Originally posted by Melissa Clow at http://blog.kinaxis.com/2017/01/live-webcast-concurrency-new-era-supply-chain-planning/

by Bill DuBois

Education and training – What’s the difference?

learningFor anyone in supply chain, 2016 was an exciting and challenging year. Hot topics included advanced analytics, Internet of Things, 3D printing and robotics. Drop in all the global, economic, political and environmental challenges into the conversation and the changes needed to make supply chains survive and thrive in the future became front and center at all the top supply chain events.

 

At the Gartner supply chain conference back in May the theme was the “bimodal” supply chain. What exactly is bi-modal? Gartner describes it as running two modes within your supply chain simultaneously. Mode one focuses on managing day-to-day operations; mode two is all about making the breakthrough innovations needed to take on the new challenges facing supply chains.

 

Taking a bi-modal approach to learning

I recently sat in on a webinar that discussed learning options, subscriptions and how you can revolutionize the way your organization learns. At the heart of the webinar was how to drive maximum value from a technology investment, in this case RapidResponse. My thoughts though went back to the Gartner conference and the bimodal strategy. Perhaps organizations should take the same bimodal approach to learning as Gartner suggests for supply chain management. In this case the two modes would be education and training.

 

A number of years ago I was in a session with a client when someone asked, “What’s the difference between education and training?” As I was about to explain the difference as being the “why” versus the “how,” one of our clients more eloquently painted this picture; “Think of it this way, would you rather have your 16-year-old daughter receive sex education or sex training?” I didn’t need to explain any further.

 

For supply chain organizations, there is a need to continually educate their employees on new technologies and gain an understanding on how these technologies might impact their business. If companies decide to implement new processes and supply chain technologies to keep up with the shifting supply chain realities, they’ll also need the training required to implement fast and extract value as soon as possible.

 

The supply chain learning journey

There are several great sources that provide valuable insights into emerging trends and technologies. Gartner, SCM World and Supply Chain Insights are all organizations that study supply chain and help companies stay informed. The analysts provide valuable direction in keeping supply chains competitive with direct consults and best practices. These groups can steer your education plans so that gaining knowledge becomes a way of life and not just a once a year trip to a conference.

 

When it comes time to take action it must be swift and any learnings put into play – whether it’s building on success or moving on from failure. This is where the training comes in. For example, if it’s determined that your next step to supply chain excellence is the deployment of a new software platform, best-in-class training programs will ensure all those involved are getting timely training in order to maximize value.

 

In the webinar I mentioned on learning subscriptions, all of the training was based on the user’s role. The facilitator described five distinct roles:

 

  • Consumer
  • Contributor
  • Author
  • Administrator
  • Expert

Each role had a specific training path and there were several ways to consume materials, including recordings, instructor-led online and self-paced. All learning could be done over time and revisited if the learner needed to refresh on a particular topic. This ensures everyone receives the level of training they need, in a way that makes it easy to learn and in time to drive value. The faster you understand all the capabilities of a system, the more creative your organization can become in addressing challenges and changing processes that allow you to thrive in the face of disruption.

 

Part of creating an environment that’s attractive includes one that fosters education and training. You’ve all heard the expression “knowledge is power.” With everything supply chains are staring at in 2017, knowledge will certainly equal power and value. What approach does your company take on continued learning? Let us know in the comments below.

 

For more information on training roles and paths for the Kinaxis community visit: www.kinaxis.com/training-paths

 

The post 2017 – The year of learning appeared first on The 21st Century Supply Chain.

 

Concurrency - New Era of Supply Chain Planning

 

Originally posted by Bill DuBois at http://blog.kinaxis.com/2017/01/2017-year-learning/

by Alexa Cheater

bimodal supply chainInnovate to survive. It’s a common mantra among businesses these days, driven by the digital revolution and all that entails. It’s changing the way the world works, and how we as consumers interact with it. Your supply chain and S&OP process isn’t immune to the impacts.

 

Keeping up with digitization, big data and the Internet of Things (IoT) requires a supply chain that’s flexible, scalable and adaptable. It requires innovative new processes and approaches to data management. But driving that level of growth can’t be easily achieved if your supply chain is solely focused on efficiency. Doing the same old things won’t yield new results. It’s time to do things differently.

 

The key is running two modes within your supply chain simultaneously. Mode one focuses on maintaining the status quo and managing day-to-day operations. It seeks to reduce overall cost structure. Mode two is all about breakthrough innovations and what’s needed to break into new markets and launch cutting-edge solutions. It focuses on experimentation and driving revolutionary changes in how supply chains adapt to new risks and opportunities.

 

Both modes have value, but you need them independent from one another to achieve success. Innovative new digital initiatives need to run alongside the traditional analog business. You can’t just segregate innovation to an occasional brainstorming meeting. It needs a more significant commitment and requires an investment in new talent, processes and technology.

 

But the good news is, your supply chain likely already has pockets of mode two capability within it. You just need to draw them out, guide them and foster them. As Stan Aronow, Research VP at Gartner, points out, “Building a sustainable Mode 2 capability is about fostering a culture and governance that encourages open thinking and leverages creative talent in a way that balances disruptive innovation with the needs of the business.”

 

Operating a bimodal supply chain is a case of revolutionary new ideas becoming the next incremental evolution of your supply chain. Think of mode two as revolutionary. It is about big, fast changes that can lead to huge rewards. But also to huge risks if the implementation fails. Learning to fail fast is critical in this mode. Mode one is much more evolutionary. Small, incremental steps toward change. You aren’t likely to see a big payoff, but you aren’t going to bankrupt the company in the process either.

 

Interested in finding more about becoming bimodal? Check out our white paper Building a Bimodal Supply Chain, Connecting Supply Chain Efficiency and Growth, which explores how you can turn your supply chain into an innovation machine, while still maintaining the efficiency you’ve already built.

 

The post Building a Bimodal Supply Chain appeared first on The 21st Century Supply Chain.

 

How to Get Your Supply Chain Ready For the Future

 

Originally posted by Alexa Cheater at http://blog.kinaxis.com/2017/01/building-bimodal-supply-chain/

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