How do the Best-in-Class Respond to Supply Chain Disruptions?

Published July 22nd, 2014 by Melissa Clow 0 Comments

“Chief Supply Chain Officers (CSCO) know that there is no such thing as a perfect plan and disruptions will always occur.”

This is the reality that every member of a supply chain team lives with every day. And while sometimes, a disruption might be small and easily offset, some disruptions are more significant and have a greater impact on the supply chain before they can be resolved. Aberdeen Group’s recent research report – The Chief Supply Chain Officer’s View of Supply Chain Disruptions: How the Best-in-Class Respond – takes a look at this reality and what leading companies are doing to prepare for these unexpected events.

So how does Aberdeen define Best-in-Class? Based on a survey of 151 end-user organizations, Aberdeen used the following metrics to identify the top 20%:

  • 97% average customer service level (84% for All Others)
  • 30 day average cash conversion cycle (59 days for All Others)
  • 12% total logistics cost as a percentage of revenue (25% for All Others)
  • 85% average forecast accuracy at the product family level

Regardless of where an organization falls on Aberdeen’s scale of maturity, none are immune to the disruptive forces impacting supply chains around the world. How an organization prepares for and addresses disruptions when they do occur is what sets the Best-in-Class apart. Figure 1 shows not only the top disruptions for the 12 months preceding Aberdeen’s research, but also shows how concerned leading organizations are for each type of disruptive event.

supply chain disruptions research

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Posted in Miscellanea


What the Analysts Are Saying About…A&D Supply Chains

Published July 18th, 2014 by Bill DuBois 0 Comments

What the Supply Chain Analysts Are Saying About A and D Are you looking for some reading material to pass the time on your next flight? Even if you’re not you should check out Supply Chain Insights, Supply Chain Metrics That Matter. For the past several years, Supply Chain Insights has been delivering this research series. What caught my eye is that for each report, they do a deep dive on a specific industry and use a mix of financial data, survey research results and interactions with their clients to help get a better understanding of various industries’ supply chains.

I spread my Supply Chain wings at an Aerospace company and since Aerospace and Defense is a key vertical market for Kinaxis, the recent Supply Chain Metrics That Matter: A Focus on Aerospace & Defense report was downloaded on my laptop to read on my next flight. The research benchmarks A&D companies against other industries and looks at the top five A&D companies over the last decade. Although it didn’t give any suggestions on what to do when you find yourself in row 32, you know the one next to the washroom, it did discuss the challenges the industry is facing as well as offering up solid recommendations for areas of improvement.

From a challenges perspective, here are the highlights covered in this report.

The obvious challenge is the complexity in the A&D industry. The report uses the Boeing 747-8 International as an example. It has about 6 million components which are manufactured in 30 countries by 550 unique suppliers. Think about those design, sourcing and delivery challenges.

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Posted in Best practices, Demand management, General News, Supply chain collaboration, Supply chain management


Thow Back Thursday: First Solar case study ‘First Solar & Kinaxis Killed the Excel Star’. A video worth remembering

Published July 17th, 2014 by Melissa Clow 0 Comments

first solar case study kinaxis killed the excel star at kinexions

Here at Kinaxis, we are starting to gear up for this year’s Kinexions (our annual training and user conference). I quickly began to reminisce about our fun yet educational customer videos from past conferences. So, on this ‘Throw Back Thursday’, I would like to share Shellie Molina’s First Solar case study ‘First Solar & Kinaxis Killed the Excel Star”.

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Posted in Miscellanea


Supply Chain Metrics That Matter: A Focus on Aerospace and Defense

Published July 14th, 2014 by Melissa Clow 0 Comments

metrics that matterJust a quick post to share some research courtesy of Lora Cecere of Supply Chain Insights LLC.

Supply Chain Metrics That Matter: A Focus on Aerospace and Defense

Increased complexity, slowed growth and shrinking margins are challenging the Aerospace and Defense (A&D) sector. According to recent research from Supply Chain Insights, A&D companies need a renewed focus on collaboration, visibility and core supply chain capabilities to remain competitive and win new business.

In Supply Chain Metrics That Matter: A Focus on Aerospace and Defense, Supply Chain Insights benchmarks A&D companies against other industries and dives into data from five top A&D companies over the last decade. The research highlights the supply chain challenges for this industry, as well as the critical importance of getting it right.

Complimentary report courtesy of Lora Cecere of Supply Chain Insights LLC.

Get the supply chain research >>

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


Did You Miss the Late Late Supply Chain Show at the Gartner Supply Chain Conference?

Published July 11th, 2014 by Melissa Clow 0 Comments

Achieving “3D” Vision: Defining, Designing, Delivering End-to-End Supply Chain ProcessesDid You Miss the Late Late Supply Chain Show at the Gartner Conference? Not to worry, the live show was taped!

We know not everyone was able to attend the Gartner Supply Chain Executive Conference, or our session in particular, so we made sure we could bring the supply chain show to you!

Kinaxis senior business consultant (and pseudo talk show host!), Bill Dubois, moderated a lively panel discussion entitled: ‘Achieving “3D” Vision: Defining, Designing, Delivering End-to-End Supply Chain Processes‘.

Click here to watch the recording.

Session Abstract

In the latest episode of the ‘Late Late Supply Chain Show’, host Bill Dubois and guest panelists take an entertaining and informed look at the three Ds (definition, design, delivery) of a supply chain process and technology vision. Trevor Miles provides the Kinaxis definition of a planning system of record, and guests discuss key tenets to designing and delivering it. Hear examples of what it takes to execute, as companies share experiences on their steps towards realizing the end-to-end vision in this high-energy, interactive session.

Stacey Cornelius, VP, Operations, Nimble Storage
Tony Savoca
, Director, IT, Supply Chain and Logistics, Bristol-Myers Squibb
Trevor Miles
, VP, Thought Leadership, Kinaxis

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Posted in General News, Supply Chain Events


4 Parallels between Planning a Wedding and Supply Chain Planning

Published July 9th, 2014 by Melissa Clow 3 Comments

wedding-planning-supply chain planningI got married on June 28th. After 7 years together, we decided to make it official. To be honest, I never had much interest in planning a wedding so I had lots to learn. As exciting as it was, at times the task was daunting: venue, guest list, colors, theme, bridal party, transportation, music, photography and of course the dress.

Throughout the nine months we took to plan, I realized there are a lot of similarities between wedding planning and supply chain management. Here’s my top 4 list on the parallels between the two:

4. Disruptions

To no one’s surprise, I learned that wedding planning does not always go smoothly.

Just like supply chain management, there will always be disruptions –it could be a small disruption like your parents invite people that weren’t on your original invite list or a larger one, like what a Saskatchewan couple experienced last week on their wedding day… a tornado! Despite this, their photographer was able to think quickly and capture some breathtaking photos.

Lesson learned: There will be bumps in the road but you can’t dwell on them; they need to be dealt with rapidly and maybe even a little creatively.

supply chain disruptions wedding

For business, competition continues to grow. Responding rapidly to changes is critical, whether it is ordinary daily order changes to large and unexpected supply chain disruptions such as strikes, blockades and regional tragedies. We can no longer predict the future with acceptable levels of accuracy, and so the success or failure of supply chains is dependent on how quickly and effectively stakeholders can understand and respond to evolving situations. Once you know the impact, you need to act quickly to simulate the various scenario alternatives and find the best solution. The timeliness of resolution is a key factor in mitigating any potential damage to your operations.

Risk management

wedding supply chain risk managementWe contemplated who we would ask to give a speech. For example, do you ask your husband’s friend to make a toast even though you know there’s a very good chance he will say something offensive? We decided to decrease the risk of any bad behavior by our friends and kept speeches to a minimum by only asking the best man and maid of honour to speak.

In supply chain, it is not just about avoiding risky situations, supply chain risk management has a component that many companies fail to consider; the ability to respond:

  • Even the best thought out mitigation strategy may fail when the time comes to implement;
  • events that you couldn’t have imagined (or considered too low a probability to worry about) during your risk assessment may in fact come to pass; and very importantly,
  • small events, which may be considered insignificant on their own, but that taken in sum become a large risk consideration if not managed effectively.

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


Throwback Thursday: Competing against time. A concept worth re-exploring.

Published July 3rd, 2014 by Lori Smith 0 Comments

As the idea of “Throwback Thursday” grows in popularity, we couldn’t help ourselves but to jump on board! Despite the temptation, we’ll refrain from posting pictures of women with teased hair and big shoulder pads; men with their bell bottoms; or adorable baby pictures from a time in our lives when we were all cute. Instead, on this quiet holiday week, we’ll keep it professional and look back on a past blog post that covers a classic concept that remains as relevant as ever. This post certainly does not have to compete against time. Enjoy!

Originally published January 12, 2012 by Trevor Miles (@milesahead)

Every now and then a concept comes along that resonates very strongly with what I perceive to be key issues in operations in general, and supply chain in particular. One of these is the seminal work by George Stalk of Boston Consulting Group titled Time—The Next Source of Competitive Advantage published in July 1988 in which he states that:

Today, time is on the cutting edge. The ways leading companies manage time – in production, in new product development and introduction, in sales and distribution – represent the most powerful new sources of competitive advantage.

Unfortunately Stalk decided to name the book he co-wrote on the topic as “Competing Against Time” which isn’t the point, although the subheading “How time-based competition is reshaping global markets” rescues the concept, which is really about competing against the competition with time. It is all about being more agile, more responsive, to real conditions. Stalk sets out some Rules of Response very clearly:

  • The .05 to 5 Rule
    Across a spectrum of businesses, the amount of time required to execute a service or to order, manufacture, and deliver a product is far less than the actual time the service or product spends in the value-delivery system
  • The 3/3 Rule
    During the 95 to 99.95 percent of the time a product or service is not receiving value while in the value-delivery system, the product or service is waiting. (Stalk breaks this out into 3 components of waiting, hence the 3/3.) The amount of time lost is affected very little by working harder. But working smarter has tremendous impact.
  • The 1/4-2-20 Rule
    For every quartering of the time interval required to provide a service or product, the productivity of labor and of working capital can often double. These productivity gains result in as much as a 20 percent reduction in costs.
  • The 3 x 2 Rule
    Companies that cut the time consumption of their value-delivery systems turn the basis of competitive advantage to their favor. Growth rates of three times the industry average with two times the industry profit margins are exciting – and achievable – targets.

All too often though people get the impression that these rules are only applicable in the short term. They are not. The issue of responsiveness in operations is driven by the latency of the information and the time it takes to respond. In other words, the time to detect that something of significance has happened and the time to respond to the change, or correct the discrepancy. Reducing either of these will have a dramatic effect on a company’s competitiveness, whether this is a short term detection of demand change that requires rescheduling manufacturing or a longer term change in technology that requires the purchase of new manufacturing capacity.

Terms such as VUCA – Volatility, Uncertainty, Complexity, and Ambiguity – or PDCA – Plan, Do, Check, Act – don’t excite me because they are focused on removing volatility and complexity, usually promoting ‘stability’ at the cost of responsiveness, whereas Stalk’s concepts are all about being responsive, being agile. To me this is the correct emphasis. While of course there is an overlap in that a decision or manufacturing process that is overly complex will result in longer lead times, it is the overall sentiment of complexity and volatility being ‘bad’ expressed in VUCA and PDCA with which I disagree. As I wrote in a previous blog from the 2011 Gartner Supply Chain Conference:

I say embrace VUCA. Accept that it is the new norm. Resistance is futile.

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Posted in Best practices, Miscellanea, Supply chain management, Supply chain risk management


And the most important personality trait for someone in supply chain professional services is…

Published July 2nd, 2014 by Lori Smith 0 Comments

Today we announced the appointment of our new vice president of professional services, David Kelly. Welcome aboard David!

With the formalities of the press release out of the way, we thought we would introduce David in a more fun and casual way. So enjoy our Q&A post as we put David on the hot seat and get to know better the newest addition to the Kinaxis management team.

 

A QUICK TAKE ON PROFESSIONAL SERVICES

Name your top 3 implementation success factors?

  • Leadership, strong team and an effective and reasonable plan. All successful projects require strong leadership to lead and mentor the team through the difficult and challenging issues that will come up. That team needs to be made up of members that take ownership and responsibility for their role and actions during the project. And most importantly, a sound plan that is based on reality and reasonable time frames is key to allowing the team to be successful and the leader to lead.

In the goal of driving high user adoption, what are the essential “must-dos”?

  • Organizations need to drive effective user adoption, which is almost always tied to change management. When new processes are put in place that are wrapped around the use of new technology, we need to work with our clients to define an effective program that will allow users to seamlessly adopt the new process. As a team, we need to bring prescriptive approaches that our clients can tailor for their specific situation. This effectively leads to happy users, which makes happy customers.

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Posted in Best practices, Miscellanea, Supply chain management