Archive for the ‘General News’ Category

David and Goliath: Lessons for supply chains

Published July 30th, 2014 by Carol McIntosh 0 Comments

David and Goliath | supply chain perspectiveI just finished a great book called ‘David and Goliath’ by Malcolm Gladwell.

The book references the story about two men, Goliath from the Philistines and David from the Israelites in the days of the Old Testament in ancient Palestine.

As most of you know, in the battle of David and Goliath, David, a small man, the underdog, was confronted by a giant, a man so formidable it would have seemed impossible for David to even survive such a fight. But he did. He won using skill and techniques that were not typical for this fight. Goliath was weighed down by his armor. David was flexible, responsive and targeted. He knew that he couldn’t rely on his size if he wanted to win.

Having been in supply chain for so many years, I immediately made a connection.

The correlation I saw is with organizations. I have worked with numerous organizations in multiple industries and it is disappointing to see that quite often the bigger they get the more difficult it is for them to make effective decisions. It is very easy for a large organization to, over time,  apply more and more armor. They develop more guidelines, decision hierarchies, rigid processes which end up making it more difficult for employees to achieve their goals than before. The end result is latent decision making, lack of flexibility, costly errors, and politically charged decisions.  The company may be doing well from a shareholder view but when you peel back the onion you see the issues. What impresses me is the caliber of the employees. They are many intelligent, forward thinking individual contributors tangled up in the armor.

On a positive note, I did recently have the pleasure of working with a very large company who acted like David. At one time I expect that they were the underdog. Their advantage stems from their culture. It is a company with a culture of rewarding innovation, empowering employees, providing a clear line of communication to senior executives, succinct communication in meetings and emails, and the use of process to ensure execution to plan.

As you can see, I am a big believer in the David’s. I work for a David and we are winning many battles. The story of the underdog winning the battle is always appealing to everyone. Just remember that it is with just cause and there is no reason why any company, large or small can’t maintain the skills of a David.

 

Posted in General News, Supply chain collaboration


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. I always thought getting through security these days was complex.

With such a heavy reliance on first, second, third, fourth and fifth tier suppliers and in some cases having only one or two suppliers for specific components, it’s easy to see how delays and budget overages can happen. A supply chain based so heavily on external sources is susceptible to more risk than catching a flight on time out of Newark. As Supply Chain Insights mentions, this is having a significant impact on the company’s bottom line.

Interestingly, to help address the issue of ensuring materials are available when needed; the research indicates that A&D companies have “developed some of the most advanced sourcing techniques and practices.” Companies like Lockheed Martin, are looking at new strategies for materials (raw or otherwise) that are harder to source, especially in the cases where increased Supply Chain volatility have thrown a wrench in their “Just In Time” approach. The challenge is balancing reduced material delays with rising inventory levels and longer Days of Inventory.

To help address these challenges, Supply Chain Insights makes a few recommendations that I think are spot on. Suppliers, in particular of materials that are sole sourced, play such a large and important role in the A&D supply chain, it’s vital that there be a focus on supplier collaboration and communication at every level.  A big part of this is increasing visibility into the supply chains to ensure they can anticipate and plan for potential disruptions. Focusing in these areas will help reduce supply chain risk, and make A&D companies better prepared to deal with inevitable disruptions when they do occur.

Thanks to Metrics That Matter, not only did I get some valuable A&D insights but it took my mind off of sitting in row 32 on a delayed flight out of Newark. The report covers a lot more ground than what I’ve discussed here, so feel free to download a full copy of Supply Chain Metrics That Matter: A Focus on Aerospace & Defense report here. (No registration required.)

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


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 >>

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

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.

It is important to be proactively alerted to urgent issues before they turn into major problems.

Collaboration

Because there are so many aspects that go into successfully pulling off a wedding, it’s really important to have a good working relationship with all your vendors. One challenge that we ran into with our venue, is that every time we spoke about our wedding plans we were passed along to a different wedding coordinator to help us… and more often than not, it wasn’t the person that would be there to help us the day of. This was a little unnerving because without telling our coordinator firsthand, it felt like we were playing telephone. Getting on the same page is key since these are the people that are going to help you execute your big day.

Just like collaborating with all your vendors, guests, bridal party, those in supply chain now need to coordinate with a number of tiers in the value chain network. Because of that, supply chain visibility and supply chain coordination has been reduced and often made the brand owners dependent on suppliers for their business and operations performance results.  To be truly effective, supplier collaboration needs to go far beyond the tactical exchange of data. Key suppliers must actively review information and directly contribute to the decision-making process so that companies can exchange early warnings and collaboratively resolve supply chain risk issues. Better supplier collaboration improves the flexibility of a supply chain and the profitability of the enterprise. 

Talent

We hear a lot about supply chain talent and how important it is to build up less experienced supply chain professionals to operate an effective and efficient supply chain. The same could be said for those getting married. We certainly needed and appreciated our friends and family that supported us throughout the wedding planning process. Without their support and advice, we wouldn’t have been able to pull it off, or at least not as well.

Just like we received a lot of sage wedding and marriage advice from married friends, colleagues and acquaintances, many organizations are creating formal supply chain talent-management programs to help transfer knowledge to cultivate growth. Often, these programs aim to engage both the mentors and the mentees by providing opportunities for a connection and growth. And now, more and more colleges and universities are offering undergraduate- and graduate-degree programs in supply chain management to better prepare younger supply chain professionals to enter into the field.

 

All that said, I can officially say we did it! And I can’t wait to give advice to future engaged couple thinking about planning a wedding.

Happy Wednesday!

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


Celestica recognizes suppliers with its 2013 total cost of ownership supplier awards

Published June 16th, 2014 by Melissa Clow 0 Comments

On this Monday morning, we would like to share some good news with our readers: We had the great pleasure of being awarded a 2013 Total Cost of Ownership (TCOO) Supplier Award from Celestica, which recognizes suppliers that support Celestica’s TCOO sourcing strategy and demonstrate excellence in quality, delivery, technology, service, pricing and flexibility.Celestica Recognizes Suppliers With its 2013 Total Cost of Ownership Supplier Awards

Kinaxis is very proud to be awarded “Best IT Technology Partner” by their valued customer.

Celestica’s global network has over 3,000 suppliers making the competition tough. To be recognized as a top partner from all the other candidates is something we are incredibly proud of.

We’d like to congratulate the other winners as well! See the full list here: http://www.celestica.com/News/News.aspx?id=4774

Learn more about Celistica’s supply chain operation, by viewing past blogs and videos:

 

Posted in Awards, General News, Supply chain collaboration


Mentoring, Sponsorship and Quotas: What are their relative merits in bringing more women into supply chain management?

Published May 27th, 2014 by Melissa Clow 0 Comments

Next week, June 5, 2014, we are excited to host a webcast on women in supply chain management.

We have a fantastic panel of accomplished female supply chain practitioners as well as industry expert Lora Cecere serving as the moderator. Register for the webcast to hear them discuss the thorny issues of mentoring, sponsorship, and quotas as mechanisms to get more women into supply chain, and the relative merits and drawbacks of these approaches.

Mentoring, Sponsorship, & Quotas: What are their relative merits in bringing more women into supply chain management?

Event Details:
Mentoring, Sponsorship, & Quotas: What are their relative merits in bringing more women into supply chain management?
Date: Thursday, June 5, 2014
Time: 2:00 PM to 3:00 PM ET

There is a consensus that since women constitute over half of the workforce but just 10% of top supply chain executive positions in Fortune Global 500 companies that something needs to be done to address this imbalance. While a great deal of attention gets placed on the ‘glass ceiling’ concept, there are a lot of women who face barriers and discrimination at mid and entry level positions too.  There is a clear social responsibility need and this panel will focus on the practical advantages to having more women in supply chain including:

  • Do women and men make decisions differently? If so, why does this matter to supply chain?
  • Has supply chain become more relevant to women as a career option?
  • What does a career path look like for women in supply chain?

Reserve your spot!

P A N E L I S T S :
Verda Blythe, Director, Grainger Center for Supply Chain Management, Wisconsin School of Business
Laura Dionne, Director, Worldwide Operations Planning, TriQuint
Elisabeth Kaszas, Director, Supply Chain, Amgen Inc.
Shellie Molina, VP, Global Supply Chain, First Solar

M O D E R A T O R :
Lora Cecere, Founder, Supply Chain Insights

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Posted in General News, Pharma and life sciences supply chain management, Supply chain collaboration, Supply chain management


Part 2: Bold Predictions for the 2014 Top 25 Supply Chains

Published May 14th, 2014 by CJ Wehlage 1 Comment

Yesterday, I posted Bold Predictions for the 2014 Top 25 Supply Chains Part 1 where I gave a brief recap on my predictions from last year and the approach I took for this year’s Bold Predictions for the 2014 Top 25 Supply Chains.

Now I’d like to share with you:

  • Biggest Move Up the Top 25 Ranks
  • Biggest Surprises
  • My top 5 2014 Predictions

Biggest Move Up the Top 25 Ranks
This is the supply chain that will make the biggest move up in 2014 from their 2013 ranks.

And the winner is…

Lenovo has been making news, especially with acquisitions:

  • IBM’s personal computer business in 2005
  • IBM’s server lines in 2014
  • NEC joint venture in 2011
  • ~ 3800 patents from NEC in 2014
  • Medion in 2011, giving them 14% of the German computer market
  • CCE in 2012, giving them a local Brazilian partner for regional growth
  • Stoneware in 2012, to expand cloud computing services
  • LenovoEMC joint venture for network attached storage solutions
  • Motorola Mobility from Google in 2014
  • Nok Nok Labs for implementing voice recognition over passwords for security

All this activity will have a positive effect on both their Peer and Gartner Opinion votes.As well, Lenovo had a 18% increase in revenue from 2012 to 2013, and a 18% increase in gross profit.I wouldn’t be surprise if Lenove went from #20 in 2013 to #10 in 2014.

 

Biggest Surprises

The biggest surprise for the 2014 Top 25 Supply Chain will be the year of the Automotive return to glory.Ford, BMW, Volkswagen, Hyundai Motor, and Tata Motors all had a good 2013.The restructuring phase appears to be behind the industry.Global auto sales have been good, especially in China and Japan (15% y/y), along with Western Europe.While there’s reason to cheer the sales growth, the auto industry supply chains will need to step it up.The pressure going forward will be on profits, through lower pricing and raised incentives to keep up sales.Ford issued a profit warning due to pricing pressures in late 2013.The supply chain leaders in the automotive industry will need to drive the profitability challenge, by lowering costs and developing innovative methods in their supply chain strategies.

 

Top 5 2014 Prediction
#5

Ever since Kevin O’Marah and I sat down with Samsung back in 2008 at their Suwon location, I’ve always admired Samsung’s supply chain.They run one of the best S&OP’s, focusing on market share across their multiple business units : Computing Products, Home Appliances, Semiconductors, Digital Displays, Mobile Devices and Home Electronics.They moved from #13 in 2012 to #8 in 2013, driven by strong revenue growth, peer opinion and good inventory turns.What puts them in at #5 will be continued revenue growth.Going from $201T (won) in 2012 to $229T (won) in 2013.2013 year end net income was $30.47T (won), along with $36.47T (won) in operating profit.A 27% on-year increase.And that’s with an $800B (won) “special employee bonus” to commemorate 20 years since Chairman Lee Kun-hee announced a management strategy, as well as a $700B (won) being knocked off by a stronger won.

 

#4

In the 2012 Gartner Top 25, McDonalds beat out Amazon by 1/100th of a point, 5.87 composite score vs Amazon’s 5.86.I have them coming in at #4, simply because their revenue growth was only 0.2% from 2012 to 2013.From their 2013 Annual Report, I also found it concerning they were challenged to respond fast enough to flat forecasts, competition, pricing and customer facing initiatives.

Don Thompson, CEO, McDonalds – “Though McDonald’s continues to grow, our performance fell short of our high expectations this past year.Challenging conditions – including a flat or contracting informal eating out category in most of our major markets, increased competitive activity and consumer price sensitivity – impacted our results.In addition, some of our customer facing initiatives didn’t generate the comparable sales lift and incremental guest visits needed to overcome external pressures in today’s highly fragmented market.”

These are challenges that an effective supply chain should know sooner and be acting faster.

#3 Unilever

Unilever has been doing a lot of things right, especially to influence their Peer and Gartner Opinion votes.They’ve done a significant amount of keynote presentations:

  • SCM World Live 2013, Marc Engel, CPO Unilever
  • SCM World Leaders Forum 2014, Paul Polman, CEO Unilever and Pier Luigi Sigismondi, Chief Supply Chain Officer Unilever
  • SCM World Live 2014, Jorg Brouwer, Group Vice President, Sales & Operations Planning Unilever
  • Gartner Supply Chain Executive Conference Australia 2013, Dhaval Buch, SVP Supply Chain, Asia, Africa, Russia, Unilever
  • ISMC2013, Pier Luigi Sigismundi, CSCO Unilever
  • Logicon 2014, David Beauchamp, VP Global Logistics Unilever
  • Sustainable Supply Chain Summit, 2013, Dirk Jan de With, VP Procurement Ingredients & Sustainability Unilever
  • Supply Chain West Africa 2013, Adedoyin Ashiru, Manufacturing Director, Unilever Nigeria

I would have been thinking #2, as Unilever posted a 4.3% increase in 2012 to 2013 sales growth.But turnover was down 3% from $51.2B (euro) to $49.8B (euro), largely due to the impacts of foreign exchange and net acquisitions & disposals.Despite an increased spend in advertising and promotions, Unilever’s core operating margin only improved 0.4%.

#2 Apple

Things are still going very well for my previous employer. Revenue went from $156B in 2012 to $170B in 2014. The Gartner vote dropped from 651 in 2012 to 470 in 2013. It may continue to drop, but the Peer vote should stay in the 3000 range, nearly 1200 points above the competitors (excluding Amazon at 3115 in 2013). My main concern about dropping them to the #2 position is that their margins have fallen on an annual basis for seven straight quarters. And the press has been questioning when new products will arrive. I remember the negative responses when Tim Cook said: our teams are hard at work on some amazing new hardware, software and services that we can’t wait to introduce this fall and throughout 2014. Information like this makes for nervous investors, and creates articles like the one in Business Insider, which calls into question the strategic roadmap. Even this week, with the news that Apple is buying Beats by Dre, that is somewhat concerning. Not only is this type of acquisition out of character for Apple for inorganic growth, it begins to show the strategic importance of streaming music, something that iTunes strategy has lacked.

#1 Amazon

It’s going to take a big effort for Amazon to improve their 2013 composite score of 5.86 to the level of Apple’s 2013 score of 9.51. Amazon already compares with Apple in the Peer Opinion vote and Gartner Opinion vote. Net sales continue to grow, going from $61.1B in 2012 to $74.5B in 2013. Where Amazon got knocked in 2013, Three Year Weighted ROA (at 1.9%), is where they stand to improve dramatically in 2014. Amazon was able to reduce the percentage of sales devoted to cost of goods sold from 75.25% to $72.77. This was a driver behind a 2012 Earnings from Continuing Operations loss of ($39M), to a positive $274M in 2013. Finally, Amazon hit it well for innovation when CEO Jeff Bezos announced on 60 Minutes about developing a drone based delivery service called Prime-Air, giving customers their product in only a half-hour after they click “buy”.

Send me your thoughts on my Bold predictions. What other profiles should I consider? What factors should I weight more or less? Send me your Top 5 predictions!

 

Posted in General News, Inventory management, Supply chain collaboration, Supply chain management