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2017
by Alexa Cheater

Artificial Intelligence in Supply Chain Planning There’s no getting around it. Artificial intelligence (AI) is here. From self-driving cars to intelligent digital assistants (one of whom I share a name with) to advanced robots working on the shop floor. But conspicuously absent in all this fervor around what’s new and next in AI are details and examples of how to implement these emerging technologies in supply chain planning. Everyone it seems is focusing on supply chain execution.

 

Don’t get caught in the spin cycle

 

While examples of AI and machine learning in supply chain planning are few and far between, that doesn’t mean folks aren’t making progress in this area. The trick it seems is not getting caught up in all the hype – and there’s certainly a lot of it. Nearly every company under the sun is touting their software as having advanced AI capabilities. Well it’s time for a little truth – most of those claims are just creative marketing spin (it’s ok, I work in marketing so I can say that!). There isn’t a supply chain management tool on the market today that can catapult your supply chain planning into a realm where humans are strictly hands-off.

 

That’s in part because AI in supply chain planning is still in its relevant infancy, but mostly because that isn’t the direction we’re heading. The robot apocalypse isn’t here. And there’s a good chance it’s never going to come. The likelihood of robots and smart machines putting everyone in the unemployment line is miniscule at best.

 

Hang your misconceptions out to dry

 

Instead of focusing on how machines are going to take over your supply chain, look instead at how you can leverage AI to improve the speed, accuracy and efficiency of your existing supply chain planning processes. To start with, you’re going to need the right foundation. You won’t see value by just slapping AI capabilities onto a platform not equipped to make use of them. It isn’t just about new technology.

 

The right foundation is one that lets you plan concurrently. Concurrent planning drives supply chain planning value all on its own by letting you know whether an exception or event is important or not – a critical piece to the planning puzzle. It gives you the ability to plan, monitor and respond across business functions in a harmonized way, breaking down silos, enhancing end-to-end visibility and ultimately leading you to make better decisions, faster.

 

When adding AI capabilities to supply chain planning processes, it isn’t enough just to collect data. You have to see the patterns behind it. AI-enabled supply chains need to be able to answer fundamental questions like:

 

  • Is this important?
  • What’s the impact?
  • How can I correct the situation?

By bridging the gap between data, process and people with concurrent planning, you’ll be able to manage sales and operations planning (S&OP) and supply chain planning more effectively with stronger integration between critical business functions like finance, IT, marketing and sales. Concurrent planning lets you look at your supply chain as a whole, not just a set of individual links in a broken chain.

 

Iron out your expectations

 

The benefits AI technologies bring to supply chain planning are the ability to provide speed and accuracy beyond human capabilities. It is possible to have a supply chain that’s smarter, faster and self-healing, meaning it continuously observes and measures data and automatically adjusts or repairs itself as it finds exceptions. You supply chain will be able to detect, predict and suggest, letting you answer those fundamental supply chain questions outlined above.

 

Let’s explore a case related to lead times. Current supply chain planning systems typically look at one item from one source to one destination. A self-healing supply chain would observe and monitor lead times not just for that one product, but any others that share similar patterns based on historical data and slope. It would then be able to predict if other products are likely to experience similar lead-time delays based on factors like shared suppliers, distribution routes and even commodities. It would also be able to suggest possible solutions, like running a promotion on an alternate product to shift demand, or finding an alternate supplier or route.

 

AI in supply chain planning helps you understand these patterns behind your data, instead of just feeding you disparate streams of data that don’t really provide any meaningful answers. It’s about intelligent question answering, not just big data.

 

The wave of new AI-enabled technology is only growing, and coming with it is a surge of opportunity related to supply chain planning. Companies that can see past the hype and put a solid supply chain planning foundation in place now will be better equipped to utilize AI in the future to drive real value that matters.

 

Want to learn more about how AI factors into supply chain planning? Check out our latest white paper, written by Trevor Miles, Thought Leader, Kinaxis. Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning explores what AI really means for you.

 

The post Cutting through the hype: AI in supply chain planning appeared first on The 21st Century Supply Chain.

 

Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning

 

Originally posted by Alexa Cheater at https://blog.kinaxis.com/2017/09/cutting-hype-ai-supply-chain-planning/

by Dr. Madhav Durbha

Gartner 2017The 2017 Gartner supply chain executive conference took place at the O2-Intercontinental Hotel in London on September 20th and 21st. The theme of the conference was ACT (Aspire, Challenge, Transform), same as the Gartner supply chain summit in Phoenix during May of this year. A few of the presentations in London, such as a highly provocative key note by John Philips of PepsiCo are a repeat from this prior event. I covered my observations from the May event in a previous blog. To avoid repetition, I will focus on some net new messages that resonated well with me from this event. Here they are, in no particular order:

 

1. Tailor your supply chain to cater to diverse businesses: In his keynote, Mourad Tamoud, EVP of Global Supply Chain Operations of Schneider Electric talked about how they are segmenting their supply network based on their customer personas and purchasing behaviors. Based on how Schneider plans, delivers and executes, the following five supply chain models were defined:

 

a. Collaborative
b. Lean supply chain (for customers who value the economic aspects of their purchases)
c. Agile model (for the customers who value reliability above all else)
d. Project model (for high level of configurability)
e. Fully flexible

 

Using these different supply chain models, Schneider was able to tailor the service and the overall experience for customers by different personas/groups. The crux of his message was that the overall design and the technological enablers are equally important in enabling “tailored supply chains”.

 

2. Digital supply chains enable transition to selling services instead of products: Simon Bailey of Gartner made a very compelling presentation on the opportunities that digital supply chains enable. Here is an example he gave: Philips lighting is now providing “Light as a service” to the Amsterdam Schipol airport (which happens to be one of the best lit airports that I had been to!). Through sensors embedded in the lighting that meters the amount of light provided, the airport now pays for the amount of light it consumes. The sensors also provide Philips the means to predict failures of the lights and fixtures and proactively replaces them. Philips, Schipol and the passengers with a great airport experience – all come out as winners – thanks to the digitalization of the supply chain! Philips has the advantage of turning a product into a service offering with a more predictable and results driven revenue stream.

 

3. The advantage of humans over machines: There was plenty of discussion around the role of automation and AI (artificial intelligence). Amidst wide ranging predictions about what machines will do to human jobs, Dr. Lynda Gratton of London School of Business made an interesting observation in her keynote speech on talent management. She said humans have a distinct advantage that machines can’t mimic in the near future. It is the advantage of a billion years of interactions between each other. The warmth to share, the ability to reach out, and collaborate are skills that humans excel at. It is a simple truth, but easy to forget. Supply chain management is after all a people’s business. Softer skills powered by human intuitions, emotions, and interactions do play a significant role in organizational success.

 

4. Blockchain in supply chain: Andrew Stevens of Gartner made a presentation on Blockchain covering the basics of what it is and what to expect. Listening to him, as well as reading up quite a bit on the topic by myself and discussing the topic with my industry peers with deep interest in the topic, I do believe the technology has the potential to provide a level of traceability and enable frictionless transactions like we had not seen before. However, several hurdles remain in large scale adaption, such as standards definition, cost factors involved due to high computational power needed to enable a blockchain, and as with any network effect to take off, buy in from multiple stakeholders. My advice to SCM professionals is to take interest in educating themselves in what the technology can offer and if you can afford, experiment in some small scale projects with your supply chain partners, as opposed to contemplating on big bang initiatives around block chain for the timebeing.

 

5. Technology as core to supporting inorganic growth: In a very compelling presentation during one of the breakouts, Atul Tandon, SVP of Global SCM at Mylan Pharmaceuticals, shared some staggering statistics around how his company has grown from a US $5 billion revenue base 3 years ago, to a US $12 billion base now powered by inorganic growth. During the same period, their SKU complexity has grown from roughly 7,000 SKUs to 23,000 SKUs. Amidst that staggering growth, driving standardization in business processes and IT infrastructure is not easy. Atul talked about how they introduced agility and flexibility into their planning. Given the dynamics of the pharma industry (increased demand volatility due to large tender orders, network complexity, variability in supply due to quality issues and such), being able to quickly run “what if” simulations is absolutely critical. With the investments they made in technology, Mylan can now run “what if” scenarios in a matter of minutes (for what used to take days). Quite impressive especially in light of the massive growth! Atul concluded his presentation noting that 70% of supply chain transformation efforts fail due to change management and data quality issues, and advised the attendees to address these to ensure success.

 

6. Future of supply chains: In his concluding speech Kevin O’Marah of Gartner, gave a passionate talk on what the future holds. He talked about the changing nature of supply chain roles of today. Here are his predictions around five jobs for the future:

 

a. Sourcing leader becomes Innovation coordinator
b. Demand planner becomes Commercial troubleshooter
c. Sustainability leader becomes Resource czar
d. Logistics manager becomes Customer satisfaction director
e. Production Planner becomes Customization master

 

Without going into details on each of these, I will just take one example and elaborate based on what I am seeing in having worked with many organizations. The demand planner role in most organizations of today tends to be to generate a forecast or a consensus demand plan (in the best case) and throw it over the fence to supply planners to make it happen. However, if there are supply choke points, it is usually days or even weeks before demand planners know of any “miss” in the commercial plan. I see some progressive organizations move towards a “concurrent planning” paradigm wherein the demand planner, as and when he makes adjustments to the demand signal, gains immediate visibility into potential bottlenecks and knows whom to collaborate with. In not so foreseeable future, the demand planner could become a “network planner” or a “commercial troubleshooter” as Kevin calls it, who can resolve the problems that stand in the way of realizing the organizational plans and goals.

 

All in all, I came back feeling quite energized. Beyond catching up on the latest happenings and exchanging ideas, these events are great reunions – providing me with an opportunity to meet with many SCM professionals who I had the pleasure of collaborating with over the last two decades and make new acquaintances, and potentially lifelong friendships!

 

The post Digital supply chains, AI, Blockchain and the future of work – Insights from the Gartner supply chain executive conference appeared first on The 21st Century Supply Chain.

 

Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning

 

Originally posted by Dr. Madhav Durbha at https://blog.kinaxis.com/2017/09/digital-supply-chains-ai-blockchain-future-work-insights-gartner-supply-chain-executive-conference/

by Teresa Chiykowski

Recently, I was asked to write an email with a FOMO theme. Admittedly I had no clue what this meant (maybe it’s an age thing?). Then my mind wandered to the gutter because it starts with the letter “F.” Then I asked Mr. Google who never lets me down – and he didn’t.

 

FOMO is short form for “Fear of missing out.” It’s really the fear that if you miss a party or event you will miss out on something great. Well, speaking of events and something great, that’s exactly what Kinexions ’17 promises to be. Hey, on that note, check out this little snippet!

 

Play the video on youtube.com

 

If you read my last blog post, you know that Kinexions is the premier supply chain conference event for our RapidResponse® user community. It’s two jam-packed days of networking, inspiring keynotes, informative general sessions and a variety of breakouts delivered by customers, product experts and partners. This year, Kinexions takes place Oct. 10 and 11 in Orlando, Fla. And, thankfully, it’s all systems go – despite Irma’s recent visit.

 

I’ve already given you a sneak peek into some of the inspiring stories our customers will share, including Honeywell, Schneider Electric and Lippert Components. Today, I’m going to give you a preview of three more.

 

Merck: Node-to-node planning vs. E2E supply chain visibility

 

While many multinational companies struggle with moving to a single instance ERP platform, the challenge isn’t just developing node-to-node planning capabilities. It’s truly being able to connect interdependent globally managed end-to-end (E2) supply chains in real time, and it’s a differentiator in today’s competitive environment. This session covers how RapidResponse is proving extremely useful in making the difference not only in terms of supply chain optimization, but also in ensuring Merck can always meet patient needs!

 

S&OP & concurrent planning with Jabil 

 

As a contract manufacturing company, it’s critical for Jabil’s S&OP process to support customers’ demands by generating a feasible master production schedule and inventory strategy that deliver required service levels – all while considering capacity and materials constraints. Since Jabil is a highly diversified company, the solution needs to be flexible to accommodate many planning models and calendars, as well as respond to multiple demand changes on the fly. This session explores how Jabil leveraged RapidResponse’s concurrent planning capabilities to change their S&OP process.

 

Easing the complexity of AMD’s supply chain planning

 

AMD, developer of computer processors and related technologies for business and consumer markets, relied on an in-house built MRP engine to provide a weekly supply plan and support its complex needs. When it became apparent the company needed to move from a linear programming approach to a heuristic rules-based engine, some out-of-the-box thinking was required. This session covers AMD’s quest for performance and quality as they leveraged and configured RapidResponse to manage their supply chain complexities.

 

To check out the full conference agenda, including breakouts, networking opportunities and post-conference product training, visit the Kinexions ’17 website.

 

If you’re part of our RapidResponse user community and haven’t yet registered for Kinexions ‘17, there’s still time. It would be a shame if the conference came and went and you found yourself suffering from a bad case of event FOMO!

 

The post Countdown to Kinexions ’17: FOMO and supply chain stories that inspire appeared first on The 21st Century Supply Chain.

 

Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning

 

Originally posted by Teresa Chiykowski at https://blog.kinaxis.com/2017/09/countdown-kinexions-17-fomo-supply-chain-stories-inspire/

by Alexa Cheater

How concurrent planning can help you take back your time

effective supply chainStop being a slave to your supply chain and take back your time! Don’t wait around for your supply chain to catch up to the speed of life. Why spend hours, days or even weeks waiting for data transfers, analyses or simulations when you can accomplish all of those things in a fraction of the time it takes you today. All you need is the right supply chain management software – one that enables concurrent planning.

 

Concurrent planning isn’t a collection of disconnected functional models. It’s a way to look at the supply chain as a whole, not just individual links in a broken chain. It allows you to bridge the gap between data, process and people, so you can better manage sales and operations planning (S&OP) and supply chain planning more effectively.

 

Here are just a few of the things you could find time for if you ran an effective supply chain with concurrent planning at its core:

 

Concurrent planning gives you end-to-end visibility, rapid what-if scenario simulation and a platform for cross-functional collaboration. All of which when combined enable you to breakdown silos, connect your supply chain and ultimately make better decisions, faster. You’ll know sooner if something’s gone amiss in your supply chain, and be able to act faster to correct it, reducing decision latency and improving operational and financial performance. But just as importantly, it will allow you to spend less time managing your supply chain, and more time enjoying life.

 

What would you do with the time you could save using concurrent planning in your supply chain? Let us know!

 

The post What could you do with a faster, more effective supply chain? appeared first on The 21st Century Supply Chain.

 

Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning

 

Originally posted by Alexa Cheater at https://blog.kinaxis.com/2017/09/faster-effective-supply-chain/

by Iman Niroomand

Reverse logisticsReverse logistics is defined as the process of moving goods beyond their typical final destination for things like re-use, capturing value, or proper disposal.

 

In supply chain networks, materials flow from suppliers through to end customers. Supply chain executives measure the effectiveness of that flow using the on-time delivery (OTD) metric. It’s a common supply chain measurement, focused on ensuring delivery to the end customer is fast and efficient from the time the customer puts his or her order in place. However, the mission of your supply chain doesn’t necessarily end when the product reaches the end customer. There are many reasons customers return products, including:

 

  • The customer bought the wrong product
  • The product was damaged upon arrival
  • The product did not match its description
  • The customer no longer wants the product

In those cases, you would then have to organize shipping of the returned product and send it through various processes such as testing, dismantling, repairing, recycling or disposing of it. All these processes require the product travel in reverse through your supply chain network.

 

There are many advantages to implementing reverse logistics, and the benefits extend to not only customers, but manufacturers, as well. For products at the end of their life cycles, reverse logistics extends their use through repairing, reshaping or recycling. It can act as a sort of asset recovery for manufacturers so they can extract as much value from the product as possible, providing a second return of investment. Reverse logistics also has an environmental benefit for companies, who would gain tax credits and positive public attention for doing their part to ensure discarded products don’t end up in the landfill. Perhaps the most important reason for reverse logistics is the profit increase companies can see by decreasing material costs.

 

Reverse logistics has become even more important with the arrival of the e-commerce era. In recent years, physical retailers have been replaced with online ones, whose sales are estimated to reach $414 million by 2018. In online retailing, at least 30% of all products ordered are returned, compared to only 8.89% bought in brick-and-mortar shops. This rapid growth in the volume of returns causes huge uncertainties around reverse logistics, and puts pressure on supply chains to manage and implement product returns successfully. For that reason, you should plan and develop your reverse logistics carefully.

 

There are metrics you can use to monitor reverse flow in your supply chain. They include:

 

  1. volume of returns
  2. type/condition of returned product
  3. dollar value
  4. percent of sales

In-depth analysis of these metrics can help you identify problem areas and convert the threat of returns to opportunity for improving your business.

 

The benefits of employing a reverse logistics strategy far outweighs the cost of implementing it. Is your supply chain ready to move in reverse?

 

The post The importance of reverse logistics in your supply chain network appeared first on The 21st Century Supply Chain.

 

Rise of the smart machines: How concurrent planning and AI can help you win big in supply chain planning

 

Originally posted by Iman Niroomand at https://blog.kinaxis.com/2017/09/importance-reverse-logistics-supply-chain-network/

by Bill DuBois

What are your supply chain thoughts when you see this picture?

As pictures start to emerge showing the damage caused by the recent string of hurricanes like Harvey and Irma, immediate thoughts go to the safety of the people caught in the path of these storms. Thoughts and hopefully many donations are going to all those involved in disaster recovery efforts.

 

The image below is an aerial photo taken and released by the Dutch Department of Defense showing the damage of hurricane Irma wrought on a shipping yard in the Dutch Caribbean island of St. Maarten.

 

Hurrican Irma - Supply chain impact

 

If you happen to be involved in any way in supply chain, whether it’s supply chain planning, manufacturing or distribution, your next thought after hoping people are okay is likely, “holy crap!”. Once the initial shock has worn off, your supply chain instincts will kick in as you assess the damage from a supply chain perspective.

 

You’re probably asking the question, “What’s the impact on supply?”. As you look at this picture, it’s natural to think about the amount and value of supply that is damaged or stuck on route. That immediately leads to worrying about the impact on the customer:

 

  • What demands will be left unsatisfied by the supply disruptions?
  • What orders should be filled with the limited supply available?
  • Are there other capacity disruptions?
  • How long will it take to recover?

If your supply chain happens to support the disaster recovery in any way, thoughts to a spike in demand is something else to manage. Bottled water, generators, batteries, building supplies, food supplies, the list could go on.

 

Delivery, especially in support of relief from the destruction and customer satisfaction are obvious immediate concerns, but then cost and margin questions soon follow: What’s the impact on the supply chain when prices jump due to limited supply? What’s the impact on margin with a likely hike in fuel costs? What’s the financial hit on using more expensive alternate materials, suppliers and shipping routes?

 

You could think of all these questions as “after thoughts.” At risk of beating our supply chain chest, practitioners have certainly learned their lessons from past experiences like Hurricane Matthew. Supply chain thought leaders began thinking about Irma long before the pictures surfaced.

 

For example, Florida power companies began staging vehicles and equipment in strategic locations well in advance of the arrival of Irma. This was a strong example to help convince customers and residents they should prepare, as well. On top of this, AT&T, Verizon Wireless, Sprint and T-Mobile sent crews to cell sites across Florida to top off fuel generators, test back up batteries and protect facilities from Hurricane Irma’s anticipated storm surge and associated flooding.

 

Many companies like Home Depot and Target were working with warehouses and distribution centers to ensure stores were well stocked. These companies are preparing their supply chains and stepping up 24/7 efforts to restock as merchandise starts to fly off the shelves as the cleanup continues. This can mean pre-staging supplies from distribution centers to stores in areas at risk.

 

For supply chain leaders who took a preemptive strike against the forces of Irma, they’re thinking, “I am glad we prepared” when they see these pictures. Today, companies can easily simulate any number of scenarios to understand impact, and then determine preparation and response plans that will minimize the impact of the destruction. For example, supply chains can simulate a supplier being down for a day or a week, simulate a spike in demand and the ability of the supply chain to satisfy the increase in time to deliver goods to affected regions, and simulate an alternate source or more expensive supplier.

 

Today, planners can have answers to these questions minutes after the National Hurricane Center issues its first press release on the next hurricane. The final thought we should all be thinking when we see these pictures from a supply chain perspective is “what other questions should I ask before the next hurricane or weather event?”. Let us know what you would add to the list.

 

The post Supply chain impact before, during, and after Hurricane Irma appeared first on The 21st Century Supply Chain.

 

Originally posted by Bill DuBois at https://blog.kinaxis.com/2017/09/supply-chain-impact-hurricane-irma/

by Alexa Cheater

6 speed bumps on the road to automotive supply chain success

Automotive supply chainA trending move from regional to global supply chain processes is adding complexity to the automotive supply chain at an unprecedented level, driving a growing need for automation and collaboration. That’s revving up interest in realignment, consolidation and optimization of supply chain activities. The problem is, limited investment in top tier suppliers is causing constraints, and the rise in connect devices (including cars) means requirements for further innovation must extend beyond environmental footprint and safety.

 

Emerging markets like Brazil, Russia, India and China are further changing the automotive landscape, as automakers look to streamline distribution and better serve these areas, who combined represent 40% of the world’s population and have gross domestic product (GDP) growth far exceeding that of more fully developed countries.

 

Staying competitive has become harder than ever. Here are just a few of the other challenges facing the automotive industry.

 

Automotive supply chain pain points

 

Multiple ERPs

Various point-based solutions, multiple enterprise resource planning systems (ERPs) and legacy systems located around the globe mean disparate, disconnected data. That results in poor end-to-end supply chain visibility, latency in critical decision-making and overall inefficiency in supply chain operations.

 

Solution: Incorporate all supply and demand data through a closed-loop process that writes back to execution systems based on decisions made throughout the planning cycle. Integrating data into a single system of record builds confidence in the accuracy of data and the global capacity management system. One data set means one version of the truth and one location where anyone involved can see updates to those numbers.

 

Large-scale data requirements

The computing power required to model global, multi-tier supply chains and explode demand and supply across integrated supply chains is enormous. But the ability to scale is a critical capability to supply chain success.

 

Solution: Make sure you’re using the best technologies available to support scalability and performance requirements for this data-intensive industry.

 

Global complexity

Automotive manufacturers must contend with a global supply chain footprint spanning multiple time zones and dozens of countries.

 

Solution: Work toward end-to-end supply chain visibility with insight to planned and current demand, inventory, capacity, constraints and supply at any desired level of the product hierarchy.

 

Complex products

Vehicles and their various parts and accessories are complex. They often have large, deep and varied bills of material (BOMs) and typically have multiple models, trims, options and packages available. Each has intricate and cascading rules to determine required components in an order-specific BOM. Each market offers configurations with different launch dates.

 

Solution: Using a supply chain management solution with an in-memory planning engine will allow for real-time response to demand-supply based configuration changes. Make sure BOMs hold product structure for manufactured products, including draw quantities (quantity per assembly), start and stop effectivity dates, production yields and mix factors. Be sure you have the necessary capabilities within your technology to manage different configuration granularity across the time horizon in the same model.

 

Inelastic and constrained global supply

Volume ramp up brings with it significant challenges. While demand is picking up, and companies are responding by increasing their production, suppliers are still cautious after the recession of 2008. Accurate demand forecasting for products and associated parts is a struggle.

 

Solution: Flexibility in modeling units and/or time-based constraints is key. When supply or capacity is constrained, causing the demand for finished vehicles to not be satisfied, use a system allowing for order prioritization based on any criteria specified – channel, vehicle type, geography, margin, fair share, etc. Scenario planning capabilities will allow you to evaluate multiple options in case of demand-supply imbalance.

 

Increased expediting and premium shipping charges

Failing to have the right parts available in the right place at the right time has resulted in increased expediting and premium shipping charges. That typically means higher inventory levels, tying up scarce capital and leading to higher obsolescence charges.

 

Solution: By connecting all data, processes and people, inventory planning and management happens concurrently with other functional planning processes. You’ll instantly understand the impact on inventory targets when changes to demand, supply and/or capacity plans happen. Using always-on analytics assess the impact of unexpected changes as soon as they’re recorded. Use notifications to alert planners if thresholds are broken.

 

These are just a few of the specific automotive supply chain pain points. Are there other challenges you’re facing in your supply chain? Let us know in the comments section below.

 

And don’t forget to check out the other industries featured in this blog series:

 

The post Supply chain pain points: Automotive appeared first on The 21st Century Supply Chain.

 

Originally posted by Alexa Cheater at https://blog.kinaxis.com/2017/09/supply-chain-pain-points-automotive/

by Joe Cannata

What rapid adoption of virtual assistants means for CPG supply chains

CPG supply chainI recall watching the original Battlestar Galactica series in the late 1970s, and there was an episode where Commander Adama was dictating his log. Before him was a computer screen recognizing his voice, taking his spoken words and translating them to perfect text for all to see. The capitalization and punctuation were perfect. Who knew back in 1978, when a home computer was slightly more than an expensive toy, and large computers were mainframes that ate punch cards and spewed paper and hole-punched tape, that this stunning scene would be a reality in my lifetime?

 

Now let’s move on to December of 1983, when a small company owned by Exxon Enterprises, named Verbex, interviewed me for a Systems Analyst position. Verbex had nothing to do with oil. They were one of the early pioneers of voice recognition technology, and produced a device about the size of a small paperback book, that had an active vocabulary from 300 to 10,000 words. It was being used at the time for everything from bridge painting to package sorting. I didn’t get the job, but I was made quite aware that the “future” shown in a 1978 TV show was five years closer to becoming a reality.

 

Now if we fast-forward to present day, we have the likes of Siri, Alexa, Cortana and Bixby, all on personal devices. I have spoken into my phone to Google to get directions on numerous occasions. People dictate text messages. And now, using technologies like Amazon Echo, people can order whatever they want, any time, from any place. This fundamental shift in the shopping paradigm is posing unique challenges for supply chains. Already, supply chains have had to adapt to online shopping, and crazy fulfillment demands. After reading a recent article in SCM World by Kevin O’Marah, I learned that CPG companies have felt extreme upstream pressure, as he puts it. Wider assortments, multiple versions of packaging and a completely different kind of customer relationship are required. There is a move from the traditional shopping method of going to the store, whose inventory is based on customers buying pre-packaged items on shelves. The demand was set by either advertising, seasonal cycles or spikes due to new “hot items”. Just as retailers and suppliers have made adjustments, a different kind of disruption has been taking place, and picking up momentum. This means a shift from retail store-based supply chains to a more dynamic personalized one, based on the consumers.

 

Being able to place voice orders, from any place, any time, means more shopping can and does take place. You don’t have to go to a store, you don’t have to be home in front of your computer. You could be out at the movies, and order anything from a tube of toothpaste to a set of furniture, 24/7. Non-traditional online items are now being bought. Orders come in any time, without a predictable cadence. I saw in O’Marah’s article that major retailer Walmart has teamed with Google to be part of Google Express. Google Express is a service that includes stores like Costco, Walgreens, Pier 1, PetSmart and a host of others. You download the app and can start shopping. Walmart brings extreme fulfillment expertise to the table, and Google has the technologies for language processing, artificial intelligence (AI) and analytics. This brings a new player to compete with Amazon and the Alexa system. It also signals a change in retail as a whole.

 

What does this mean for supply chains? The rapid adoption of virtual personal assistants changes shopping habits, just as Uber changed transportation. Traditional calendar-based sales and operations planning (S&OP) is blown out of the water, as there will always be the requirement to adapt to what consumers want. The reasonable forecast and predictability of consumer shopping habits is not straightforward any longer. This reality exists today, and is only accelerating. A new kind of supply chain needs to be developed to run in what used to be non-traditional patterns. An agile way of dealing with flexible fulfillment, shipping and return options is required. Advanced data analytics will need to be more heavily relied upon than before, so adjustments to planning, forecasting and deployment can be made. Real-time inventory is a necessity. The customer relationship – knowing how and what they purchase, and what their buying habits are – becomes a crucial factor in how a strategy is defined. Stores are now becoming distribution points. I recently went to my local Sprouts Farmers Market store (a national chain) and was surprised to see a sign for Amazon Flex. They had special arrows on the floor, directing shoppers to the area where they could pick up their Amazon orders. So besides being a grocer, they were also an Amazon distribution center. Retail stores now need to be considered part of the supply chain, as opposed to just being an end point.

 

Omni-channel, one of the most overused marketing terms in Gartner’s 2016 list, cannot be denied. In order for any retailer to adequately evolve their supply chain to meet the consumer’s needs, they must be able to see the consumer’s experience across the entire enterprise. The bottom line is supply chains in 2017 and beyond have to be strong in analytics, demand planning, order fulfillment, S&OP and a host of other applications. It’s time to evolve traditional supply chains into ones that meet the current and future requirements.

 

The post Does your supply chain hear the change coming? appeared first on The 21st Century Supply Chain.

 

Originally posted by Joe Cannata at https://blog.kinaxis.com/2017/09/supply-chain-hear-change-coming/

by Teresa Chiykowski

Supply chain conferenceIt’s hard to believe that Kinexions ‘17 is only a few weeks away. Time flies – just like astronaut Chris Hadfield, who will be joining us as our keynote speaker on the Kinexions mainstage in Orlando this year.

 

For those of you who missed my last blog post, Kinexions is the premier annual event for our RapidResponse® user community, including customers and prospects. The supply chain conference offers two full days of networking, inspiring keynotes, informative general sessions and a variety of breakouts delivered by customers, product experts and partners.

 

Last post, I touched on the top five reasons to attend the conference:

 

  1. Supply chain stories that inspire
  2. Out-of-this-world keynote speakers
  3. Network. Network.
  4. Fun, exercise and a touch of Supertramp
  5. More opportunities for RapidResponse learning

Today, I’d like to dig a little deeper into reason #1: supply chain stories that inspire.

 

This year, we’re delighted to welcome some special customer speakers to our Kinexions ’17 mainstage to share their RapidResponse stories. Here’s a sneak peek at a few of those customers and what they’ll be talking about.

 

Honeywell: Extending value since becoming customer #1

 

Honeywell has been utilizing RapidResponse in most sites for over 10 years with some that started more than 20 years ago – the day RapidResponse was introduced. In the beginning, RapidResponse was the “fast MRP engine” for the Aerospace division. As users discovered the flexibility of the data model and software, Honeywell found many additional uses, even outside MRP and supply chain. In this session, attendees will see examples of incremental applications such as a labor force management tool.

 

Schneider Electric explores artificial intelligence and machine learning

 

What’s the next step for artificial intelligence and machine learning (AI/ML) in the supply chain? Both show great promise for enhancing supply chain decision-making – especially for big multi-nationals with large product portfolios such as Schneider Electric. In this session, go on a voyage of discovery to learn how Schneider Electric is exploring AI/ML, as well as some practical use cases.

 

Lippert Components: 5 phases to transform demand planning

 

Over the past three years, Lippert Components has begun to revolutionize the way it plans both demand and supply throughout the organization. Previously, each business unit planned in its silo, with myriad processes at various maturity levels. The lack of consistency and transparency not only reduced efficiency and productivity, but also created poor inventory health. In this session, speakers will cover how RapidResponse has helped orchestrate the way supply chain planning is managed by connecting Lippert Component’s data, process, and people, which has enabled teams to work together in a single environment.

 

And that’s just a glimpse of some of the sessions on day 1! To check out the full conference agenda, including breakouts, networking opportunities and post-conference product training, visit the Kinexions ’17 website.

 

Stay tuned for further event updates!

 

The post Countdown to Kinexions ’17: Supply chain stories that inspire appeared first on The 21st Century Supply Chain.

 

Originally posted by Teresa Chiykowski at https://blog.kinaxis.com/2017/09/countdown-to-kinexions-17-supply-chain-stories-that-inspire/

by Alexa Cheater

Supply chain dataWhen it comes to cyber safety, your supply chain could be your biggest weakness. Approximately 80% of data breaches originate from within the supply chain, and the financial impact of a breach could do more than destroy your bottom line. It could ruin your credibility with your customers.

 

In 2013, Target, one of the largest retailers in the US, fell victim to a massive data breach when a cyber intruder stole credit and debit card information on more than 40 million customers and personal details like addresses, phone numbers and email addresses of 70 million customers. It cost Target more than $88 million in damages. Attacks like these have become the number one threat to many organizations and their associated supply chains, but protecting yourself isn’t enough.

 

Target’s breach was traced back to malware installed on its point-of-sale system. The attack came through one of its vendors, making it even more important that you have end-to-end visibility through all tiers of your suppliers – not just the top few.

 

While cyberattacks aimed at stealing data remain the most visible risk, attacks designed to deny or disrupt service are also gaining in popularity. These types of cyberattacks jeopardize production and delivery schedules, causing delays and negatively affecting customers. Nodes along the entire supply chain can feel the impacts.

 

Whenever, wherever or whoever accesses your supply chain information, it’s vital to make sure your data is safe, secure and only accessible by those who should have access. Good data security in your supply starts with proactivity. Don’t wait for an attack to happen. Evaluate your supply chain by asking these simple questions:

 

✓ Is data restricted to only those who need access to it?
✓ Are corporate password policies secure enough? Are they being enforced?
✓ Is sign in activity being monitored?
✓ Does your staff receive regular security training?
✓ Where does your hardware reside, and who has access?
✓ How is physical access granted and revoked?
✓ Are user actions tracked and audited?
✓ Do you have a comprehensive incident response plan?
✓ How is data backed up?
✓ Do you routinely evaluate your security policies and procedures?

 

Compile you answers and use them as a jumping off point to get the conversation going about how your company handles data security. And if you’re looking for even more details about how you can protect your supply chain from cyberattacks, be sure to check out our eBook Your guide to supply chain data security. Download it now.

 

The post 10 must ask supply chain data security questions appeared first on The 21st Century Supply Chain.

 

Originally posted by Alexa Cheater at https://blog.kinaxis.com/2017/09/10-must-ask-supply-chain-data-security-questions/

by Dr. Madhav Durbha

Supply chain riskCSX, one of the only two railroad operators in the USA that handles nearly all the shipments that move by train east of the Mississippi River has been experiencing serious challenges since the month of May. The reasons behind this were well chronicled in a recent Wall Street Journal article. To sum it up, an activist investor caused a major shakeup in the company earlier this year and a new CEO took over in March. The new CEO embarked on several cost reduction initiatives in conjunction with a number of changes (some may argue too fast and too soon) on how the company operates its freight-trains. This has resulted in significant delays and disruptions in shipment deliveries. An extreme example of this is a ride from Chicago to Colesburg, Tennessee taking 18 days, 13 hours, and 57 minutes!

 

The effects of these delays are being felt by many companies including McDonalds, Kellogg, Kraft-Heinz, and PepsiCo, as the article cites. These companies had to haul expedited shipments by truck so they could keep their production lines running and, in turn, meet the commitments to their customers. This has led to increased costs, not to mention all the inventory stuck in-transit.

 

Needless to say, such major challenges are visible enough and have significant enough disruptive power that considerable energy gets spent on addressing them, including executive engagement. However, did you know there are enough lead time problems lurking in your current supply chain operations that go completely unnoticed? These are the “knowable unknowns” that can hurt your supply chain performance.

 

Over the years, I have partnered with a number of customers across a variety of industries as part of their supply chain planning transformation journey. While implementing a technology solution, a lot of time is spent on cleaning the master data including assumptions around capacities, lead times between nodes, yields and such. However, once the implementation is live, many of these assumptions tend to stay static and are seldom touched. Over time, such assumptions have the potential to drift away from the reality, causing significant downstream execution challenges. For example, let’s say you modeled the lead time from “supplier A” to your manufacturing facility as 7 days. If the supplier performance degrades gradually and on average the supplier is now taking 10 days to deliver, you get into a constant firefighting mode with inventories running low, regardless of how good your planning algorithms are. On the contrary, if the supplier has significantly improved the performance and is able to consistently deliver in 5 days, you may miss out on the opportunity to be leaner.

 

Such gradual degradation of planning assumptions can be performance killers to your supply chain, causing the users to lose faith in the planning system and resort to the all too familiar Excel. Often times, someone in the procurement organization is aware of change in lead times through supplier monitoring/scorecarding, supply chain risk management and such. However, this information in most cases does not make its way back into the planning systems.

 

I used lead time as an example here. But it could be any supply chain assumptions that go into your planning system, such as capacities, yields, order multiples, etc. Today’s supply chains are far more dynamic, and underlying assumptions and data evolve rather quickly. Applying rigor and discipline to keep supply chain assumptions and the associated master data in sync with the reality is a must have to avoid “garbage in garbage out”. Those with experience in supply chain data quality improvements will attest to the fact that these endeavors are quite labor intensive. But these are exactly the kind of problems that can favorably be addressed by Machine Learning. By mining through plan assumptions and leveraging the actuals from execution systems, learning algorithms and intelligent agents can make recommendations on what data elements need to be corrected. In addition, these algorithms can also detect and surface the persistence and pervasiveness of such anomalies across the entire network, predicting risks and suggesting resolutions. These algorithms offer the potential to autotune the supply chain assumptions as they start deviating. Poor supply chain assumptions are like the deep cuts and bad bruises on your supply chain. However, by leveraging these emerging technologies, we enter the world of supply chains that can heal themselves!

 

The post Supply chain risks: The knowable unknowns that can hurt your supply chain performance! appeared first on The 21st Century Supply Chain.

 

Originally posted by Dr. Madhav Durbha at https://blog.kinaxis.com/2017/09/supply-chain-risks-knowable-unknowns-can-hurt-supply-chain/

by Dr. Madhav Durbha

Supply chain riskCSX, one of the only two railroad operators in the USA that handles nearly all the shipments that move by train east of the Mississippi River has been experiencing serious challenges since the month of May. The reasons behind this were well chronicled in a recent Wall Street Journal article. To sum it up, an activist investor caused a major shakeup in the company earlier this year and a new CEO took over in March. The new CEO embarked on several cost reduction initiatives in conjunction with a number of changes (some may argue too fast and too soon) on how the company operates its freight-trains. This has resulted in significant delays and disruptions in shipment deliveries. An extreme example of this is a ride from Chicago to Colesburg, Tennessee taking 18 days, 13 hours, and 57 minutes!

 

The effects of these delays are being felt by many companies including McDonalds, Kellogg, Kraft-Heinz, and PepsiCo, as the article cites. These companies had to haul expedited shipments by truck so they could keep their production lines running and, in turn, meet the commitments to their customers. This has led to increased costs, not to mention all the inventory stuck in-transit.

 

Needless to say, such major challenges are visible enough and have significant enough disruptive power that considerable energy gets spent on addressing them, including executive engagement. However, did you know there are enough lead time problems lurking in your current supply chain operations that go completely unnoticed? These are the “knowable unknowns” that can hurt your supply chain performance.

 

Over the years, I have partnered with a number of customers across a variety of industries as part of their supply chain planning transformation journey. While implementing a technology solution, a lot of time is spent on cleaning the master data including assumptions around capacities, lead times between nodes, yields and such. However, once the implementation is live, many of these assumptions tend to stay static and are seldom touched. Over time, such assumptions have the potential to drift away from the reality, causing significant downstream execution challenges. For example, let’s say you modeled the lead time from “supplier A” to your manufacturing facility as 7 days. If the supplier performance degrades gradually and on average the supplier is now taking 10 days to deliver, you get into a constant firefighting mode with inventories running low, regardless of how good your planning algorithms are. On the contrary, if the supplier has significantly improved the performance and is able to consistently deliver in 5 days, you may miss out on the opportunity to be leaner.

 

Such gradual degradation of planning assumptions can be performance killers to your supply chain, causing the users to lose faith in the planning system and resort to the all too familiar Excel. Often times, someone in the procurement organization is aware of change in lead times through supplier monitoring/scorecarding, supply chain risk management and such. However, this information in most cases does not make its way back into the planning systems.

 

I used lead time as an example here. But it could be any supply chain assumptions that go into your planning system, such as capacities, yields, order multiples, etc. Today’s supply chains are far more dynamic, and underlying assumptions and data evolve rather quickly. Applying rigor and discipline to keep supply chain assumptions and the associated master data in sync with the reality is a must have to avoid “garbage in garbage out”. Those with experience in supply chain data quality improvements will attest to the fact that these endeavors are quite labor intensive. But these are exactly the kind of problems that can favorably be addressed by Machine Learning. By mining through plan assumptions and leveraging the actuals from execution systems, learning algorithms and intelligent agents can make recommendations on what data elements need to be corrected. In addition, these algorithms can also detect and surface the persistence and pervasiveness of such anomalies across the entire network, predicting risks and suggesting resolutions. These algorithms offer the potential to autotune the supply chain assumptions as they start deviating. Poor supply chain assumptions are like the deep cuts and bad bruises on your supply chain. However, by leveraging these emerging technologies, we enter the world of supply chains that can heal themselves!

 

The post Supply chain risks: The knowable unknowns that can hurt your supply chain! appeared first on The 21st Century Supply Chain.

 

Originally posted by Dr. Madhav Durbha at https://blog.kinaxis.com/2017/09/supply-chain-risks-knowable-unknowns-can-hurt-supply-chain/

by Alexa Cheater

SustainabilityHow 25 multinational companies achieved sustainable supply chains

I’d like to think that most companies have moved beyond the point of believing that sustainable business practices aren’t a priority. I hope they recognize the importance of environmental protection and the value of leaving the planet a little better than they found it. Sadly, the reality it seems for many is that it’s all about the tradeoffs. Do we implement greener policies at the cost of our bottom line?

 

But does it really have to be one or the other? In my opinion, thankfully not. And I’m not alone in my assessment. Building sustainable supply chains has been a growing trend for years, and as it turns out, those early adopters may actually be seeing an increase in profits.

 

According to a World Economic Forum report, companies like UPS, SABMiller, DHL, Unilever and Nestle are among 25 multinational companies that focused on sustainability and ended up increasing revenue by up to 20% while cutting supply chain costs as much as 16% as a result. Beyond Supply Chains: Empowering Value Chains outlines 31 best practices for businesses to follow to see similar results. The primary idea behind the best practices is simple – work to achieve profitability through measures that also benefit society and the environment.

 

Some of the more interesting ideas covered in the report include collaborating with competitors and implementing innovative new technologies to drive savings. Nestle combined parts of its supply chain for fresh and chilled products in Belgium with PepsiCo, a clear rival. They bundled warehousing, packing and outbound distribution, and synchronized deliveries to fill trucks. The result was a 44% reduction in transportation costs, 55% lower carbon emissions and higher customer satisfaction levels.

 

With the implementation of a more aerodynamic trailer, DHL realized fuel and CO2 savings of up to 12%. Companies who brought down their carbon footprints saw a direct increase in profitability as a result. The report shows carbon gas reduction between 13-22% uplifted revenue by 5-20%. Brand value also increased an average of 15-30%.

 

Manish Bapna, Executive Vice President and Managing Director of the World Resources Institute, says there are three driving factors pushing companies toward sustainability, but profitability isn’t actually one of them. In a Forbes article, Bapna lists reputation, risk and opportunity as the drivers.

 

Reputation is due to the growing scrutiny companies are under from customers, investors and the media. People want to see sustainability efforts and are willing to spend their hard-earned dollars with companies that prove they care. Risk is a result of environmental factors that could impact supply chains – things like the increase in natural disasters and other recent extreme weather events, which can cause millions of dollars in lost productivity if operations are suddenly shut down. Opportunity comes in the form of uncovering hidden efficiency and cost savings. Just look at the revenue boost those 25 multinationals experienced when cutting their carbon footprints.

 

That’s good news for people like me who have a soft spot for our planet, because it’s evident when it comes to supply chain, it doesn’t have to be sustainability or profitability. You can have both. Companies just need to realize it.

 

Does your company have any sustainability measures in place? Do you believe it’s possible that sustainability and profitability can go hand-in-hand? I’d love to hear your thoughts and opinions, so please post away!

 

The post Sustainability vs. profitability: Is it one or the other? appeared first on The 21st Century Supply Chain.

 

Originally posted by Alexa Cheater at https://blog.kinaxis.com/2017/09/sustainability-vs-profitability-one/

by Teresa Chiykowski

Kinexions - KinaxisKinexions ’17, our annual user and training conference, is right around the corner and we’re ready to blast off. Taking place October 9-13 in beautiful Orlando, it’s more than just an opportunity to have a little fun in the sun. It’s a way to get inspired by some of the latest and greatest supply chain innovations around.

 

From customers sharing their own supply chain innovation journeys to our expert staff guiding you through a look at what’s to come, Kinexions is THE place to discover where you are on your own supply chain journey, and what it’s going to take to propel your company into the stars. It’s all systems go as we explore what’s new in industry trends, and with our cloud-based supply chain management software, RapidResponse®.

 

If you’ve attended Kinexions in the past, you know there’s no better place to get an insider’s look at the best ways to get the most out of RapidResponse. This year, we’ve got some great sessions planned for you on what’s new with RapidResponse, including:

 

  • A mainstage presentation exploring “The Road Ahead with RapidResponse”
  • Breakouts featuring the latest and greatest features in RapidResponse such as easier integration, extended visualization with geo-mapping, enriched inventory planning abilities and expanded admin capabilities
  • Live theater presentations and demos in the Discovery Zone Exhibit Hall

Plus, they’ll be sneak peeks at some upcoming capabilities and details around how we’re delivering the latest innovations in supply chain  even faster to Kinaxis customers. You don’t want to miss it!

 

If you haven’t already done so – have a read through my last blog post:  Top 5 reasons to attend Kinexions ’17 for a few more details on what’s in store for attendees.

 

Check out the agenda and register today!

 

The post An out-of-this-world showcase of supply chain innovation appeared first on The 21st Century Supply Chain.

 

Originally posted by Teresa Chiykowski at https://blog.kinaxis.com/2017/09/world-showcase-supply-chain-innovation/

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