Bring Out the Best in Your Supply Chain

KevinMcGowan
  • by Kevin McGowan
  • Published

supply chain diagram hand drawing on chalkboardA recent article in Fleetowner shed some light on the human aspects of supply chain management. Featuring research by Arash Azadegan (Ph.D, Professor of Supply Chain Procurement at Rutgers University), the article discusses some key traits held by the best supply chain managers. But the article alludes to something more: the collaborative human efforts in the supply chain, especially in difficult times.

Relationships are often really tested in times of crisis. We see this in many aspects of our lives, but the same applies in your supply chain. When the storm clouds move in, you need to get your product moved out, and you’ll need help.

Azadegan talks about how the “dominoes of the supply chain are now very close together – and the closer they are, the faster they fall.”

Imagine a situation where you have 24 hours to analyze, plan, and execute supply chain changes on a massive scale. Would your planning tool be up to the challenge? Would your team be able to deliver? Would all the dominoes fall?

In the Fleetowner article, author Sean Kilcarr discusses a textbook example of a massive supply chain crisis: Hurricane Sandy, which devastated large parts of the United States back in October 2012.

As Anne Strauss-Weider (from A. Strauss-Weider Inc., a management consulting firm) explains in the article, things had to move quickly as Sandy literally loomed on the horizon. The Port of New York and New Jersey was hit hard, and they “had about 24 hours’ notice before Sandy hit,” she said.

In a crisis like this, Azadegan says “jobs, inventory, and profits are at stake, and beyond that, suppliers, customers, communities, and families of employees etc. are at risk as well.” There is no time to panic, “there is only a short time that [a manager] can be visionary and academic. [These situations] are unforgiving.”

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The Ongoing Impact of E-Commerce on the Supply Chain

BillDuBois
  • by Bill DuBois
  • Published

e-commerce transaction on mobile phoneA recent post on Logistics Management cites some figures supporting the idea that e-commerce is a runaway train continuing to gather momentum. Based on data for the latest major shopping days, Cyber Monday has eclipsed Black Friday when it comes to sales numbers and what consumers did to meet their holiday shopping needs.

This finding continues a clear statistical trend. In Q2 2015, the U.S. Commerce Department reported e-commerce sales grew at 4.2 percent (compared to 1.6 percent for overall retail sales). This growth, combined with the impact digital commerce has on consumer behavior, has what the Wall Street Journal called “an outsize impact” on the supply chain.

Increased e-commerce volumes and omnichannel strategies are putting unprecedented demands on the supply chain. The rapidly changing demands of consumers (e.g., click and collect or click and next-day delivery) present a whole new set of challenges to retailers and e-tailers. They’re desperately searching for new supply chain and fulfillment solutions at every stage of operations, which includes demand forecasting, inventory management, warehousing strategies, technology integration, and distribution practices. Increasingly, manufacturers are turning from a traditional supply-driven orientation to demand-driven solutions to effectively meet e-commerce and omnichannel challenges to the supply chain. In fact, an article on the Journal of Commerce website notes visibility into the supply chain and agility in responding to change are key to mitigate risk and maximize opportunity in meeting the challenges e-commerce growth and the digital consumer present to the enterprise.

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Design for the Supply Chain Pt 1: Industry 4.0

JonathanLofton

good supply chain designMaybe because I was a Mechanical Engineer in a previous life I carry around a strong bias for good design (without debating what ‘good’ design is, I’ll just reference ‘Dieter Rams: ten principles for good design since it’s seemed to have stood the test of time). I’m always commenting to my wife about whether I think something is designed well or not.

These comments were more frequent and probably annoying when my boys were smaller and I had to assemble toys for Christmas! It seems that everywhere I look these days there are articles on design, the rise of Design Executive Officers (or some other term combining ‘creative’, ‘design’, ‘executive’, …). Without realizing it, I’ve amassed a decent sized favorites folder of web sites related to design.

I was recently reviewing the series of excellent blogs by John Westerveld (“Your supply chain is costing you money – …”), which got me to reflecting on my personal experiences and research to see if I could connect the dots between some of these costly shortfalls and the concept of ‘good’ design for the supply chain.

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Why Hasn’t the Music Industry Supply Chain Responded to the Vinyl Resurgence?

KevinMcGowan
  • by Kevin McGowan
  • Published

Vinyl records with headphonesIf you read any of the articles about the “vinyl resurgence” in the music industry, it’s easy to understand why record companies, artists, and fans are getting so excited. The pendulum has swung ever so slightly from music fans streaming music on their phones and tablets to buying an actual physical object — a 12” slab of vinyl. It’s revolutionary (pun intended).

If you’re a music fan of a certain age, you will remember the LP being the dominant music format for a few decades. That lasted until the mid-1980s, when cassettes had a brief boom. Then, by the early 1990s, CDs moved in, which led inevitably to MP3s, file sharing, and now streaming.

But LPs have always had a certain level of credibility amongst audiophiles and many hardcore music fans. One can, and many do, argue about their sound quality, artistic integrity, and associated snobbery. However, one thing that we need to really think about is this:

If people want to buy LPs, what is the established supply chain to get the LPs produced, packaged, and shipped to these listeners?

And also, if more and more people want to buy these new LPs, how can the supply chain change to accommodate the increased demand?

The vinyl resurgence surprised many, and the industry has been slow to react in many ways. The main reason they have been slow is understandable. In the United States of America, in 2015, 12,000,000 new LPs were sold, up from 1,000,000 in 2007 (Source: Wikipedia). How many plants actually produce the LPs — cut the master, press and package all those vinyl discs? The answer will surprise you: 20.

There are 20 independent companies in the United States who make these LPs. 20. Twenty. Just 20.

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Supply Chain Centers of Excellence: Don’t Overlook Technology

BillDuBois
  • by Bill DuBois
  • Published

ExcellenceIn today’s networked global marketplace, organizations increasingly see supply chain performance as a source of sustainable enterprise vitality and competitive advantage. To ensure a long-term strategic perspective that goes beyond the routine execution of supply chain tasks, Supply Chain Centers of Excellence (CoE) have become a more common tool companies use to drive innovation and best practices. According to a Gartner study of chief supply chain officers, 71 percent of organizations are employing CoEs.

Gartner defines a center of excellence as “a physical or virtual center of knowledge concentrating existing expertise and resources in a discipline or capability to attain and sustain world-class performance and value across the supply chain.” Their seminal research into Supply Chain Centers of Excellence found them to be “critical enablers of success in supply chains.” The study clearly demonstrates the value of the model, because organizations that have implemented CoEs show tangible results, including:

  • A broader supply chain span of control
  • A greater likelihood of being perceived as “partners to the business”
  • Greater implementation of more advanced supply chain practices such as segmented supply chains, end-to-end business planning, or product/service portfolio management
  • Greater success in meeting their goals with respect to revenue, margin, and return on assets
  • Twice as likely to reach revenue and margin targets than organizations without a CoE

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Chipotle’s Food Safety Woes Present a Unique Supply Chain Problem

AlexaCheater

Chipotle restuarant facing supply chain challengesThis guest post comes to us from Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management.

As you might have read over the past few weeks, one of the leading companies of the fast-casual food revolution is in turmoil following an emergence of food safety issues. Chipotle has made its name as the fastest-growing restaurant chain in America, and as a pioneer in what’s come to be called the “fast casual” restaurant sector – chain restaurants that specialize in high-quality ingredients and offerings at a slightly higher price point than conventional Quick Service restaurant (fast food) chains.

The company has built its brand on quality ingredients, ethical treatment of animals, and local sourcing in its Supply Chain. But in a series of developments that have sent the chain’s stock price tumbling, the diversity of supplier base and Supply Chain complexity that these commitments require has opened it to food safety risks – and various restaurant locations have been linked in recent weeks to outbreaks of E. Coli and Norovirus. Chipotle is now facing a sales shortfall, and stock sell-off, as a result of a Supply Chain risk that it opened itself up to by adopting the local and sustainable-sourcing strategy that makes it so compelling to consumers. As a Bloomberg article about the restaurant’s food safety issues recently put it, “Chipotle’s greatest strength has become its greatest weakness.”

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Kinaxis Once Again Positioned in the Leaders Quadrant of Gartner’s Magic Quadrant for Supply Chain Planning System of Record

TrevorMiles
  • by Trevor Miles
  • Published

Gartner’s Magic Quadrant for Supply Chain Planning System of Record Gartner recently published an update to their Magic Quadrant for Supply Chain Planning System of Record and we’re thrilled to be positioned in the Leaders quadrant for the second consecutive time. That makes us two times a leader when you also consider the Magic Quadrant for S&OP Systems of Differentiation.

Gartner defines a supply chain planning (SCP) System of Record (SOR) as a planning platform that enables a company to create, manage, link, align, collaborate and share its planning data across a supply chain — from demand plan creation through the supply-side response, and from detailed operational planning through tactical-level planning.1

In this regard, we stand out from other vendors in the space. This is because Kinaxis RapidResponse is a “one-to-many” offering – a single product that can be used to address a broad array of supply chain functions. It is our technical architecture that allows companies to create, manage, link, align, collaborate and share its planning data across a supply chain, and with customers and suppliers.

Functions have long been segmented into isolated activities that reflect organizational structures and specific functional goals, and software has been developed and deployed in the very same manner. In contrast to that, RapidResponse is a planning and analysis layer that crosses organizational boundaries, planning levels, and time horizons to improve the way supply chain stakeholders work together to make fast, value-based decisions for the enterprise. With RapidResponse, companies create the foundation for bringing supply chain functions together, and maturing or defining new processes as a result.

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Big Data and the Supply Chain: One Important Means of Moving Forward

BillDuBois
  • by Bill DuBois
  • Published

Big data business scientist presenting the conceptA recent article on CFO points to a topic gaining strong momentum in the business press: the supply chain is the next big thing for big data to address. The authors, Regenia Sanders and Jason Meil, detail why this focus has become so compelling:

“Big data can have a measurable impact on driving greater accuracy in planning, ensuring that companies make the right amount of the right product. Advanced algorithms and machine learning can facilitate increased forecast accuracy across a company’s SKUs, which drives greater turns, less waste, less inventory, and fewer stock-outs, which leads to higher EBITDA, lower working capital, and greater competitiveness.”

Companies clearly see the benefits of leveraging big data for supply chain management, yet studies show a surprising hesitance to move forward with initiatives. In Inbound Logistics, a Capgemini Consulting study is cited showing nearly all shippers and third-party logistics providers (3PLs) believe big data is vital to their efforts to improve tactical and strategic operation of their supply chains. Yet only eight percent of shippers and five percent of 3PLs have implemented big data initiatives in their supply chain. The title of a Fortune article—“Big Data Could Improve Supply Chain Efficiency—If Companies Would Let It”—further underscores the conundrum.

A number of challenges must be addressed for big data/supply chain initiatives to move forward, including cost, cultural resistance to change, and in many cases a disconnect between internal IT and supply chain organizations; but one overarching challenge is the nature of supply chains in the current global commercial environment.

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