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2017
RDCushing

Top 5 Articles for 2017

Posted by RDCushing Dec 29, 2017

Here is a recap of my top 5 blog posts, according to my readers. Check it out. See what you’ve missed that others didn’t.

 

  1. Arrival – And the Collaborative Supply Chain– This article, based on the movie Arrival, talks about the fundamentals of collaboration. It talks about finding a common language for communicating, and how to build collaboration based on common goals.

  2. Supply Chain Visibility and the SME – Here we talk about the five stages in the building and evolution of supply chain visibility. We introduce the concept of a simplified data framework for collaboration and visibility—the exchange of a much smaller, yet highly-effective, set of data between trading partners.

  3. Are We Smarter Than a Cave Man?– This challenges supply chain executives, managers, and leaders to consider whether they a really learning from their experiences; or if they are fighting the same fires over and over again

  4. 7 Books to Help Make Your Company and Supply Chain More Profitable – This was a big hit! I hope it wasn’t just a bunch of people looking for lists. My real hope is that many people actually read—and benefitted—from the books listed here.

  5. Order Management and Supply Chain Management – Starting with a definition of “order management” from North Carolina State University’s Poole College of Management Supply Chain Resource Cooperative, we reduce the matter to what supply chain managers really need to know. This article is about reducing complexity to simplicity and effectiveness. We hope many took it to heart.

 

So, take another look. See if you missed anything that could help you improve even more in 2018.

 

Also, read our recent article on Supply Chain Resolutions for 2018. Get you year off to a great start with resolutions that will lead to real improvement, not just better firefighting.

 

See you next year! And thanks for reading.

 

 

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How about these resolutions for 2018 as a supply chain executive or manager?

  1. We will create a system that senses demand and autonomously responds for delivering consistently high planned service levels.Writing at a desk
  2. We will reduce our average end-to-end supply chain inventories by up to 50 percent without sacrificing customer service levels.
  3. We will have stable, efficient, and uninterrupted production cycles.
  4. We will not allow ourselves to be put under pressure to be impossibly flexible, yet we will still deliver nearly matchless service levels and overall equipment effectiveness (OEE).
  5. We will place orders with our suppliers that are stable, and very rarely need to be changed or expedited.
  6. We will not place demands on others for forecast accuracy that is unachievable.
  7. We will not remain enmeshed in constant firefighting and expediting; instead, we will focus our efforts on continuous improvement, exception management, and value-added planning.

 

Afraid to make such bold resolutions?

Are you afraid to make such bold resolutions?

 

I would be too if I were caught in the situation where I were forced to rely on traditional forecast-driven MRP or DRP methods.

 

There is, however, a process that is proven to deliver on all of these resolutions when the methods are conscientiously applied. It’s called Demand-Driven Supply Chain Management (DDSCM) and is articulate well in Simon Eagle’s recently-released Demand-Driven Supply Chain Management: Transformational Performance Improvement.

 

If you would like to celebrate in December 2018 with having actually kept your SCM New Year’s resolutions, then I’d suggest you start today by getting yourself a gift: the book.

In fact, you might want to buy a few extra copies to share with your staff, key executives and other key figures in your supply chain. That way, it will be easier for you all to get on the same page toward a POOGI (process of ongoing improvement).

 

It’s your turn

Now it’s your turn.

 

Tell us. What are your supply chain resolutions for the coming year?

 

Are you simply resolved to get better at firefighting—having given up on all hope for real and lasting improvement?

 

Don’t! Read the book so you don't have to do so!

 

Let us know how you’re doing, and how you are achieving improvements in your supply chain. Leave your comments below, or feel free to contact us directly, if you prefer.

 

 

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Just this week, a business contact and friend of mine had his business email account “cleverly hacked” (his words, whatever that means). As a result, I received a dangerous phishing email.

Screen from phishing attack

Clicking to “VIEW .PDF ONLINE” took the recipient to page that emulated a DocuSign.com document sharing page, and requested that you login to an email account to access the “shared document.”

 

The goal of the phishing attack, of course, was to collect email address and password combinations.

 

Normally suspicious

I am normally suspicious and consider myself to be quite circumspect with regard to online dangers. However, this email from a trusted business contact and friend caught me totally off-guard. I didn’t bother to check the URL before entering the requested information in order “to access the document” my friend had sent me. The phishing screen captured my login information and then promptly notified me that my “email or password were incorrect.”

 

Only then did I look carefully at the URL, only to discover that the URL was baicaio.bid (a domain registered under an intentionally obfuscated name with a Panama address).

 

I took immediate action and changed my password on the account I had foolishly used in my attempt to fetch the document I thought was coming from my friend.

 

Normally safe

I consider my approach to password management to be relatively safe.

  • Almost all of my passwords—to more than 100 sites—are unique. I almost never repeat passwords from site-to-site.
  • Almost all of my passwords are complex—containing combinations of upper and lower case letters, numbers, and symbols (where the sites permit)
  • My passwords range in length from eight (8) characters and up. Sites holding critical personal and financial data employ complex passwords with twelve (12) or more characters.

 

I keep track of all of these using LastPass.

 

This is a FREE SERVICE that generates complex passwords for you, stores them securely, and makes them readily accessible for your use across multiple devices—including desktop browsers and applications, and other smart devices (such as my Moto Z Force Droid Android device). I never get concerned about remembering a complex password. Life is both SAFE and SIMPLE.

 

Protecting others

I like to think, in doing this, that I am protecting, not only myself, but my family (from potential financial loss and other risks stemming from identity theft) and my friends (who might otherwise suffer from spam or phishing attacks from my accounts).

 

I have chosen also to protect myself (and my family) by using LifeLock, too. My work requires me to conduct a lot of online business.

 

But, I am above 60 years in age now, so I also use LastPass Premium in order to make accommodations for my accounts after my decease. Two of my more technically-oriented children have been granted access to my LastPass account in the event something should happen to me where I am incapacitated.

 

The way this works is, when I am deceased or incapacitated, they can make a request to LastPass, as a “trusted party” to my account, to access my LastPass vault. If I do not deny the request within three (3) days, their access will be granted.

 

Once they have access, they can go in and close accounts on social media, or elsewhere, for me. I don’t leave a legacy of accounts to be hacked and abused in the future.

 

Why I’m writing this

I’m writing this because I’d like you to consider your personal cyber-security.

 

You should do this.

 

And, you should do it not just for yourself. You should do it to protect your family, your friends, and your business contacts from dangers that might arise from the hacking of your accounts.

 

Think about it. Do something about it.

 

Thank you.

 

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Recently I was working with a supply chain client where the company was seeking to implement manufacturing systems that included an advanced planning and scheduling system (APS). I asked them: “What are your chief business goals in seeking to implement and use [specific ERP]’s Advanced Manufacturing capabilities in your business?”Operation Schedule Inquiry from ERP system

 

Two of the crucial factors they mentioned in their response were to “gain insight into [their] business in regard to capacity… [and] ship dates.” The mentioned, specifically, challenges they were currently facing in “capacity planning” and the “scheduling of work orders.”

 

GIGO

In light of this request and their business goals, I proceeded to ask them some important questions, such as:

  1. What determines the quantity of units to be produced on a work order?
  2. What determines when a work order is to be released for production?
  3. How are manufacturing batch sizes determined, if different from the quantity on the work order?
  4. Are your manufacturing times in control (where in control means that variation within the process is attributable only to random events; and not in control means variations are large and are not clustered around a statistical mean)?
  5. Do you know (or have you calculated) your typical manufacturing (work center) cycle times for all production steps to be including in your scheduling? These would include (where applicable):
    1. Queue times – the average time a production unit (or job) spends waiting for processing at a work center, or to be moved to the next work center
    2. Setup times – the average time a production unit (or job) spends waiting for the work center to be set up for processing the unit (or job)
    3. Move times – the average time a production unit (or job) spends being moved from the previous work center to the current work center in a routing
    4. Process times – the average time a production unit (or job) spends actually being processed or handled by the work center
    5. Wait times – including
      1. Wait-to-batch time – the average time a production unit (or job) spends waiting to form a batch for either simultaneous processing or moving
      2. Wait-in-batch time – the average time a production unit (or job) spends waiting for its actual processing
      3. Wait-to-match time – the average time a production unit (or job) spends waiting for other components for an assembly operation

 

As you can see from the accompanying figure, traditional advanced planning and scheduling systems rely on these data in order to produce a schedule.

 

The problem is, if operations are not in statistical control (see number 4 above), even known or calculated averages will be of little value. And, while it is not unusual for us to encounter clients that have a pretty good handle on average set-up times and run-times (processing times) for various manufacturing operations, they almost never have any information on queue times, move times, or wait times in their operations.

 

This is a huge problem if their goal is to produce a schedule out of their system by which they might hope to actually drive the production floor—or calculate estimated shipping dates (as our client wanted to do).

 

What you get, without accurate data for these crucial time components of production is GIGOgarbage-in, garbage-out.

 

APS: Garbage-in = Garbage Out

 

The Advanced Planning and Scheduling module will dutifully follow the programming rules and produce a schedule that is precise to the minute (see figure above). However, it will be precisely wrong and can never be executed upon.

 

A better way

There is a better way. I told this client that what really controls their operations—and determines delivery dates—is(are) their bottleneck(s) or constraint(s).

 

A relatively small data-set could help them determine schedules much more simply. That data-set begins with (1) knowing the number of hours on the constraint(s) for each product manufactured and (2) knowing the current load on the constraint(s).

 

I told them, while there are a number of solutions that could help them start a POOGI (process of ongoing improvement) for their manufacturing and supply chain operations, perhaps they should start by looking at a product such as DBR+. Such demand-driven solutions will provide them with the tools they need for rapid ROI (return on investment) and control they would find very difficult—perhaps, impossible—to achieve using traditional APS methodologies.

 

The principles incorporated in demand-driven solutions such as DBR+ make decision-making and priority-setting much simpler and more effective, and require a far less complex set of data inputs to be effective.

 

What is your approach?

What are you doing to create a POOGI in your manufacturing and supply chain operations? Are you really improving? If so, what are the measures that demonstrate your improvement, and how fast are you really delivering additional profits to your bottom-line?

 

We would be delighted to have your feedback. Please leave your comments below, or contact us directly, if you prefer.

 

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“I think most [supply chain executives] are under financial pressure because so much working capital gets tied up in inventory…, and much of it is inventory they don’t really need. It’s the wrong stuff.”

 

That’s what Raymond Brown, Director of Operations for Orchestr8, said recently in an interview.

 

Marching to the wrong plan

So, how is it that so much inventory (and cash) gets tied up in “the wrong stuff,” while customer orders are delayed and significant waste of time, energy and money is incurred for expediting inbound shipments from suppliers and outbound shipments to customers?

Figure stuggling with forecast variability

The answer, according to Brown, is simple: “Most companies and supply chains are marching to the wrong plan!” They are executing based—not on actual customer demand, but—on forecasts of demand. And, the one thing every supply chain manager and executive knows about forecasts is: they are always wrong.

 

Damages and expenses stemming from executing to forecasts don’t end with late shipments and high expediting costs.

 

No! Brown says, “When supply chain managers bump up against actual customer demand,” they all too frequently find themselves “breaking into their production schedules,” breaking setups and further disrupting flow. They find themselves adding overtime to compensate and to catch up to the actual customer demand that differs from their forecasts.

 

They also end up pay “too many planners” and expeditors who, all too often, spend the first half of each day trying to figure out what needs to be expedited, and the second half of their day scrambling to expedite based on their findings.

 

Becoming demand-driven

“The majority of companies” we meet today, Brown reports, “have already been on their journey”—their search for lasting improvement in their supply chains and profits—“for two years or longer.” By this time, according to Brown, they have begun to recognize that “fixing forecasting is never really going to happen or produce long-term positive results.”

 

Brown has accolades for the work being done by Chad Smith and Carol Ptak of the Demand Driven Institute (DDI), as well, saying that the Institute has contributed effectively to worldwide awareness of the principles upon which DDMRP (demand driven material requirements planning) is built, and to its ability to deliver rapid ROI (return on investment) when the principles are applied conscientiously.

 

Many enterprises that might previously have sought improvement through “an upgrade” or new “bolt-on for their existing ERP [Enterprise Resource Planning] system” are now turning to companies like Orchestr8. When the see what Orchestr8 is capable of doing for them, the executives and supply chain leaders simply say, “Hey! Wait a minute. Let’s just get Orchestr8 and we will get far better and faster ROI.”

 

“Hey! Wait a minute. Let’s just get Orchestr8 and we will get far better and faster ROI.”

 

What makes DDMRP and a solution like Orchest8 so effective?

In the interview, Brown outlined several crucial factors that make the demand-driven approach—especially as implemented in Orchestr8—highly effective for those who adopt it:

Figure pulling on a straight line

  • Standardization – In a diverse, multi-echelon supply chain (even within a single enterprise) it is not unusual to find different plants, divisions, or departments all managing their supply chains and supply chain decision-making in different ways. Frequently this is because the managers have already discovered that their existing “standard” tools—like MRP, MRP II and others—are not effective for them. So, they have developed their own tools (in Microsoft Excel, for example), implementing their own concepts, rules-of-thumb and calculation algorithms. However, once they see the simplicity and effectiveness of the demand-driven approach and Orchestr8’s implementation of these methods, the can finally agree on an effective and standard approach to managing supply chain execution.
  • Ease of use – Unlike the complex—sometimes extremely complex—algorithms that underlay MRP, MRP II, and the forecasting systems that feed into MRP, the algorithms employed by DDMRP and Orchest8 are simple. So simple, in fact, that during the initial training and implementation stages, the users will be asked to work out the calculations for buffers using paper, pencil and a handheld calculator. As Brown says, “Orchest8 is definitely not a ‘black box.’ People understand it and trust it.” This makes it easy for the use it and adopt it comfortably.
  • Unanimous decision-making – The data presented by DDMRP solutions like Orchestr8 are so clear, so concise, and so trustworthy that the typical S&OP arguments about what should be done, and how priorities should be set, evaporate entirely. The simple color-coding and value assignments let everyone from the C-suite to the shop floor find unanimity as to where the priorities lie.

 

What about getting started with DDMRP?

According to Brown, getting started is really quite simple. “Typically,” he tells us, “we begin by asking our clients to describe their current S&OP process.” From there, Brown says, “We simply show them how what they are doing today will translate simply and effectively into standard processes with the DDMRP solution (Orchestr8).”

 

“When they see how easily and effectively their planners will be able to assess and prioritize any situation that might be encountered—with a fraction of the effort—they are anxious to get going,” adds Brown.

 

 

So, what about you? Are you still struggling—trying to balance inventory, forecasts, and the conflicts between actual and forecast demand? Isn’t it time to see if another approach will work more effectively for you?

 

We would like to hear your comments. Please feel free to leave your comments below, or contact us directly, if you prefer.

 

[Also published at Orchestr8.com.]

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