Your supply chain is costing you money – Reason #2 Poorly executed or non-existent sales and operations planning

Published September 10th, 2014 by John Westerveld 0 Comments

sales and operations planning gears

Reason #2: Poorly executed or non-existent sales and operations planning

Over the years, working for and with numerous manufacturing companies, I’ve seen many supply chain practices that cost companies money. Over the next several weeks, I’ll outline these issues and discuss some ideas around how to avoid these practices. You can find the previous post here:

Tell me if you’ve heard this one before. Your company has implemented an S&OP process. At first it showed some promise, but now it has turned into a blamefest attended if at all by lower level representatives that aren’t empowered to make decisions. No one trusts the numbers, inputs are late and you aren’t seeing any improvements month over month and people are starting to wonder “why bother”. Sound familiar?

So how does a poor S&OP process cost money?

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Posted in Sales and operations planning (S&OP), Supply chain collaboration, Supply chain management


On the road! 4 September supply chain conferences we love

Published September 9th, 2014 by Melissa Clow 0 Comments

September is a busy time of year for us at Kinaxis – Many folks here are flying the skies to attend various conferences. Here’s the supply chain conferences we love and will be attending. Hope to see you in the coming weeks!

Gartner EMEA1. Gartner Supply Chain Executive Conference
September 10-11
London, UK

Kinaxis is pleased to be a Premier Sponsor and participate in panel discussion of the 2014 EMEA Gartner Supply Chain Executive Conference.

Panel Details:
“The Technological Advances that Will Catapult Supply Chains into the Next Decade”
Wednesday September 10th at 9:45 AM – 10:15 AM in Room Westminster B&C

Immediately following the keynote speaker, Trevor Miles, Vice President of Thought Leadership at Kinaxis, along with other technology vendors, will take part in the following panel topic: Technology advancements have been at the heart of supply chain transformations during the past decade. Throughout the next decade, a whole new set of technologies will underpin supply chain success stories. A series of thought-provoking questions focused on the future of supply chain technologies will be put to the panel.

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2. Supply Chain Insights Global Summit
September 10-11
Scottsdale, AZ

Kinaxis is pleased to sponsor and participate in panel discussion the Supply Chain Insights Global Summit.

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Posted in General News, Sales and operations planning (S&OP), Supply Chain Events, Supply chain management


Do Supply Chain Planning systems generate any value?

Published September 8th, 2014 by Trevor Miles @milesahead 0 Comments

I have been in the advanced planning and scheduling (APS) space since 1995 when I joined i2 Technologies in Europe. Before that I was in management consulting doing what would be called supply chain design or reengineering today.

While MRP and S&OP were defined as early as the 1980s, these provided rough cut analysis at the aggregate level, nowhere near the level of detail that is possible today. The diagram below by Oliver Wight, with some enhancements by me, captures the progression of capabilities since the 1970s. My enhancements were to add the underlying technology and company information at the bottom which gives some context.

Oliver Wright S&OP IBP

The key point is that I have spent a lot of my working life focused on the value generated by more advanced planning solutions.

It has been with some shock, therefore, that over the past few months I have come across a number of prospects, partners, and analysts that question whether any real value has been generated by all the investments in technology over the past 25 years. I have come to the conclusion that this needs some further analysis, which I won’t be able to complete in a single blog.

Let me start with the confusion between planning and execution. I was on a call last week with a large company in the food and beverage space that has spent $100s of millions, and many years, on an ERP deployment. And of course during the deployment their organizational structure has changed and they have gone through some M&A activity in that time. Needless to say they have a continued multi-year deployment of the supply chain planning system provided by the ERP vendor. And they are still a long way from complete from deploying the ERP modules let alone the supply chain planning modules. Now they want to deploy an S&OP process. They have piloted the process in Excel and know that they need an enterprise level solution for a global roll-out of S&OP. The issue is that none of their IT investments in the last 10 years have moved the needle on operational metrics such as inventory levels, case fill rates, and other operational metrics. Their words. As a consequence they are looking for tangible evidence of value before progressing with a global deployment.

paul meyer productivity quoteAbout a week before that I was at dinner with Mo Hajibashi of Accenture. Mo has been around this space about as long as I have and has seen all the changes. We were reminiscing about the trade exchanges that were so much part of the discussion in the late 1990s. Of course these largely went the same way as the rest of the dot com bubble. But Mo went on to say that many companies have struggled to quantify value from their investments in supply chain systems. We were there to discuss other topics so we did not dig too deep into his statement, but it stuck, and came roaring back when I was in discussion with the company I mention above.

In July, Lora Cecere of Supply Chain Insights kicked this all off with a blog on the Forbes web site titled “My Quest to Know …” in which she seemed to question the value of IT in driving value in corporate performance. She states that

As technologies evolved over the course of the last decade, there was a promise that investments in software like Enterprise Resource Planning (ERP), Supply Chain Planning (SCP) or Business Intelligence (BI) would improve corporate performance. I was a research analyst in the throes of this movement, writing article after article on how IT projects will drive corporate performance improvements. I believed it. I was a prolific writer and a committed disciple. I thought it would transform organizational capabilities.

While Lora and my paths are different, our trajectories are the same. I studied Industrial Engineering and Operations Research focusing on Optimization Theory. I lost faith in optimization early when I realized that the uncertainty in our knowledge of true capacity, yield, lead times, and hundreds of other variables drowned out the promise of optimization. And that is assuming that we have a good handle on demand, which we don’t. However, I still believe in the promise of greater productivity through replacement of slow and manual processes with fast and agile digital processes.

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Posted in General News, Milesahead, Sales and operations planning (S&OP), Supply chain management


At Last…My First Four Weeks At Kinaxis

Published September 5th, 2014 by Jennifer Bell 0 Comments

At Last!

It’s the end of my first four week as a Kinaxian (aka Kinaxis employee), and you can queue the nightclub lullaby sung so warmly by Etta James.

This romance started back in 2011 when I was researching planning solutions as a Systems Analyst at First Solar, Inc. I stumbled across the Kinaxis website and watched a marketing video that showed the creation of a scenario…love at first sight. Luckily for me, First Solar hired Shellie Molina, who had leveraged the software at previous organizations. A few months later, we were attending Kinexions and she was signing on the dotted line.

From the beginning, I looked at implementing RapidResponse as the opportunity of my career. But, I’m not sure I realized exactly how big of an opportunity it was. The next two years were so fun! We implemented demand/supply balancing, full integration to 4 source systems, a custom production planning solution and integrated project management. It was a whirlwind. The thing that I loved the most about my job was how much I was able to say ‘yes’ to my customers. The platform was so flexible that I could do almost anything. I was limited only by my imagination.

As I worked with so many Kinaxis employees throughout the implementation, I was repeatedly impressed at the knowledge, experience and spirited approach of the group. The more interaction that I had, the more intrigued I became. So, when I discovered there was an opening on the Solution Demonstration team, I was very excited to travel to Ottawa, meet the team and interview for the role.

I am excited to be a Kinaxian. As a member of the Solution Demonstration team, I will be focused on positioning RapidResponse as the best solution for new potential customers. I will have an opportunity to expand on my knowledge of supply chain across different industries.

Over the last 4 weeks, I have not been disappointed. Kinaxis is brimming with helpful people who are experts on the product and, also, in supply chain best practices. I’m most looking forward to picking their brains at every chance presented.

So, queue the music, at last…

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Posted in Sales and operations planning (S&OP), Supply chain management


Throw Back Thursday: How Can Companies Respond Rapidly to Demand?

Published September 4th, 2014 by Melissa Clow 0 Comments

How Can Companies Respond Rapidly to Demand? Kinexions - Kinaxis & SupplyChainBrain Series

As I’ve mentioned in my last couple of Thursday blogs, we are starting to gear up for this year’s Kinexions (our annual training & user conference). A few weeks ago I began to reminisce about our videos from past conferences and I decided to create a blog series to share. So, on this ‘Throw Back Thursday’, I would like to share this video of Trevor Miles, Vice President of Thought Leadership, speaking about “How Can Companies Respond Rapidly to Demand?”.

In this video, hear Trevor detail industry’s major supply-chain management challenges – in particular, the difficulty of obtaining full visibility of supply and demand, and dealing with the volatility of markets.

Many companies seem wedded to their spreadsheets, even though they’re aware of the format’s shortcomings. Miles says executives have “a very legacy approach” to thinking about business processes. As a result, they’ve created “islands” of automation that do not add up to a coherent, smoothly flowing supply chain.

“People want to get away from that,” he says, “but it’s the manner in which they are trying to enable those different processes that is just lacking.”

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Posted in Milesahead, Sales and operations planning (S&OP), Supply chain collaboration, Supply chain management


Your supply chain is costing you money – Reason #1 Offshoring without getting the full picture

Published September 3rd, 2014 by John Westerveld 2 Comments
Here, there and everywhere | The economist
Here, there and everywhere | The economist

Reason #1: Offshoring without getting the full picture

Over the years, working for and with numerous manufacturing companies, I’ve seen many supply chain practices that cost companies money. In a series of blog posts, I’ll outline these issues and discuss some ideas around how to avoid these practices.

We all understand the appeal of moving manufacturing offshore; In many cases, offshore manufacturing is considerably cheaper, is apparently easier (just send the requirements and they build it!) But before you pull the trigger, make sure you understand these cost factors that don’t often get considered;

Longer lead time – The product that at one time was manufactured in your plant and then shipped to your customer (often in the same country) is now being shipped by boat. Instead of a 1 week lead-time, you are looking at a month or more. This significantly changes the supply chain picture and must be considered in terms of additional safety stock requirements (which will drive up inventories) and your order promise policies.

Communication issues – Dealing with people in other countries has its challenges; language barriers can make communicating detailed technical issues a challenge. Meetings are difficult to set up because one side or the other will need to take the call outside of normal business hours. And if you decide to meet face to face, you are looking at long travel times.

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Posted in General News, Inventory management, Supply chain management


Elephant in the Room: Thoughts on Metrics That Matter in Semiconductor and Hard Disk Drives

Published August 29th, 2014 by CJ Wehlage 0 Comments

Metrics That Matter in Semiconductor and Hard Disk Drives

Supply Chain Insights recently published a Metrics That Matter report covering both the Semiconductor and Hard Disk Drive (HDD) industries. Despite being hit hard by the recent recession, overall the research shows that these two industries have fared well over the last decade and are positioned to continue that success.

Success, provided they monitor the 7 “elephants” in the room.

Consolidation

Notice in the Supply Chain Insights report, there are only two HDD companies. That industry has already gone through consolidations. Semiconductor is poised to consolidate, which will have huge impact on the metrics. It’s already happening with Avago/LSI, RF Micro/TriQuint, Micron/Elpida, MediaTek/MStar and Fujitsu/Panasonic. Speed to integrate the planning functions during an acquisition is critical.

Profitability

With the OEM’s driving down the price, the semiconductor/HDD companies will have to follow (or innovate new products). Lower price means lower profitability. This will begin to impact the semi/HDD ability to raise capital and innovate/expand. Cost pressures and faster time to market in the planning processes will be required.

Global pressure

Consider that the Chinese and India governments are investing in the semiconductor industry. With China already a source for semiconductor raw materials and the China/India end consumer market growing, there will be pressure to supply chips and hard drives to local China/India OEM’s first. This could create a shortage in the US/Europe OEM chain. Understanding inventory planning will take on a new dynamic.

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Posted in Demand management, Inventory management, Supply chain collaboration, Supply chain management


3 Lessons from Gold and Silver Pawn: This… is Supply Chain, This… is Pawn Stars

Published August 27th, 2014 by CJ Wehlage 0 Comments

3 Lessons from Gold and Silver Pawn This is Supply Chain. This is Pawn StarsIf you read my prior blog, “Storage Wars rescues supply chain ignominy”, you would have seen my garage after I moved from Boston to San Diego. Every box we collected for 16 years, stuffed in the Boston attic. And now, in San Diego, the only place to put it was the garage. Well, here’s the updated picture of my garage. I used the supply chain ERP “shedding” theory to innovate and clear out my garage.

Just like shedding ERP when building a planning system of record, when I shed my garage, I was able to find cool side benefits. I found an “item” dating back to 1910, Carnegie, Pennsylvania. My grandfather passed it down to my uncle, who passed it down to me. It’s a piece of baseball history from the Pittsburgh area. I’ll tell you in a minute why I cannot say what the item is.

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Posted in General News, Sales and operations planning (S&OP), Supply chain management