Archive for the ‘Response Management’ Category

Supply Chain Risks: Big or Small, Plan For Them All

Published March 4th, 2015 by Meranda Powers 0 Comments

I suspect that few folks in the supply chain management world would argue with the fact that supply chain management is risky business.

The reality is that risk comes in many forms (including anticipated risk, uncontrollable risk and unanticipated risk). It’s constantly changing. And the amount of risk being faced by supply chain professionals has been on the rise for the past 20 years.

When we talk risk, we’re not just talking about headline-making tsunamis, floods and earthquakes. We’re talking everyday risks as well. (Some might even argue that risk in daily business activities and decision making can be just as, if not more, impactful than exceptional risk events.) Ensuring success in ‘normal’ operating conditions and when faced with catastrophic supply chain disruptions is why developing risk management strategies should be a top priority.

Regardless of the type of risk or where it’s coming from, you need to be prepared. While it may be tempting to try to define specific response plans for every potential risk your supply chain might encounter, that would be difficult to achieve. Instead, it’s really about taking a proactive approach that ensures you are prepared to recognize, assess and respond to any disruption that comes your way. Putting plans, processes, enabling tools and technology in place will help you improve reaction times and decrease the overall impact of any disruption.

We wanted to share this infographic that looks not only at the types, drivers and impact of risk but also discusses the competencies needed to react to a disruptive event and the advantages that a focus on risk management can bring your organization.

supply chain risk infographic

Download Infographic

If you want to learn more about supply chain risk management, our Knowing the Risks – Mitigating and Responding for Success is a good read. Access it here.

 

Posted in Best practices, General News, Response Management, Supply chain management, Supply chain risk management


Celestica’s Top Priorities for Improving Forecast Accuracy – SupplyChainBrain & Kinaxis Video Series

Published January 29th, 2015 by Melissa Clow 0 Comments

SupplyChainBrain attended our annual Kinexions user conference, and while there, they completed a number of video interviews with customers, analysts, and Kinaxis executives. And, we’d like to share them!

In this interview, hear Jeff Murphy, director of supply chain managed services with Celestica, describe how the company has improved forecast accuracy and demand visibility, against this backdrop of industry transformation.

Celestica has identified three main priorities in its effort to achieve supply-chain transformation: improving forecast accuracy in the face of growing demand volatility, acquiring visibility of product and optimizing of inventory at multiple locations, and synchronizing the chain from end to end.

“Having visibility is one thing,” says Murphy. “But knowing the cause of everything, with a system solution that synchronizes the entire supply chain, is key to our clients.”

Check out: Celestica’s Top Priorities for Improving Forecast Accuracy

Those goals are within reach today, he says. Advances in information systems over the past 10 years have made it possible to enable integration, with the ability to collaborate across multiple networks in real time, Murphy says.

Celestica’s efforts come at a time when contract manufacturers are seeking to do more for their clients than simply building product. Providers are “going up the value stream,” looking to provide additional services that are crucial to getting product to market, says Murphy.

The company is five years into its implementation of the RapidResponse forecasting and planning tool from Kinaxis. “It’s core to our architecture,” Murphy says, adding that the system allows Celestica to be proactive in simulation environments. Employing “what-if” scenarios, the company can see how emergency orders perform, and what impact they have on risk, revenue and inventory levels. “Previously,” he says, “we might chase that [information] for a couple of weeks.”

Clients, too, are struggling to synchronize their supply chains. They are seeking visibility into their contract manufacturers’ operations, all the way to the part level. Celestica needs to be able to respond to customer requests within minutes, as opposed to the days it took in the past, says Murphy.

Check out the other videos in this supply chain interview series:

 

Posted in Demand management, Response Management, Supply chain collaboration, Supply chain management, Supply chain risk management


In-Memory Computing for Supply Chain Management: What, Where and How…

Published January 28th, 2015 by Lori Smith 0 Comments

In-Memory Computing for Supply Chain Management: What, Where and How…The recently published Gartner report, The Impact of In-Memory Computing on Supply Chain Management (Payne, T., 21 October 2014), describes the potential of in-memory computing (IMC) for supply chain management (SCM) including supply chain planning (SCP) applications, as follows:

“By 2018, at least 50% of global enterprise companies will use IMC to deliver significant additional benefits from investments in SCM, and especially, SCP.”

As awareness of the potential for transformational benefits from IMC grows, companies are asking tough questions about how, where and what type of IMC-enabled supply chain applications they should deploy. This is important because, according to Gartner’s research, the potential “benefits will vary by organization size, functional domain, industry and supply chain maturity.” So while the list of advantages of IMC technology is significant – and includes performance and scalability improvements, facilitation of advanced analytics, and process innovation – like any technology investment, the impact to your specific environment will depend on the chosen solution approach.

Gartner outlines three styles which include:

  • Native IMC: These applications are “developed from inception on the basis of IMC design principles”
  • Retrofitted for IMC: These applications were “originally designed on traditional technologies (for example, RDBMSs), but are now replatformed on top of an in-memory data store”
  • Hybrid IMC: These applications “use IMC design principles and technologies only in part, usually to store (at times, only temporarily) and process the most performance or scalability sensitive application data, or to support real-time analytics”

Interestingly, the Gartner reports states:

“The maximum transformational benefits will come from native IMC, because this approach allows organizations to leverage IMC to drive completely new ways of working in line with the company’s supply chain transformation efforts.”

Kinaxis RapidResponse uses a Native IMC approach. With RapidResponse, the analytics code is directly compiled into the database engine where it has direct access to the data and the various data relationships. The speed and scale that this provides is valuable because it enables businesses to develop new and improved processes capable of delivering breakthrough performance improvements.

If you’re evaluating IMC-enabled supply chain applications to determine how your organization can get the most benefit this Gartner research report is a must-read! It sheds light on the business value that in-memory computing brings to supply chain management in general and provides key findings and recommendations on the potential of IMC across functional domains, industry verticals and solution types. It’s only available for a limited time, so be sure to read it today.

P.S. With a 25+ year history of developing in-memory computing technology, we’ve talked about this topic before, so be sure to also check out some of our other posts:

 Source: Payne, T., The Impact of In-Memory Computing on Supply Chain Management, Gartner, 21 October 2014.

Posted in Best practices, Gartner Supply Chain Managment, General News, Response Management, Sales and operations planning (S&OP), Supply chain collaboration, Supply chain management


Transform your supply chain process – don’t just improve it

Published December 18th, 2014 by John Westerveld 0 Comments

transform your supply chain handsawDid you ever hear the joke about the old lumberjack?  The old lumberjack came out of the forest and went for supplies.  He needed a new saw – his old two-man saw had been sharpened so many times there wasn’t much left.  At the store, the salesman showed him the newest tool for cutting trees called a chain saw.  The salesman said that he can cut trees 10 times faster than with the two person hand saw.  The lumberjack was impressed! He bought one.  Several days later he came back and said to the salesman “This saw is no good!  No matter how fast I push and pull it doesn’t cut! What’s worse – my partner keeps cutting his hand because there is no handle at the other end.

Okay… admittedly that was a silly joke.  But if you consider how many people think about supply chain software it’s like the old lumberjack and the chain saw. The chain saw was a revolutionary tool and if used right, could make a single man more effective than a team of two. Advanced supply chain planning software like RapidResponse can do the same thing for supply chain.

In my role, helping the sales team, I’m often asked to reproduce a report that the prospect currently uses to run the business.  I totally understand why this is important – the prospect wants to feel assured that their current business process can be maintained. Creating even the most complex report in RapidResponse is a breeze so it’s not a big deal for us.  The prospect gets value because the report that I’ve just built in RapidResponse replaces an Excel report that takes hours every day to update. In RapidResponse, the update is instantaneous and can show changes with every data update and with every change to the scenario.

The problem when you buy new software like RapidResponse and use it to speed up the old way of doing business, you are missing out on the true revolution that RapidResponse can bring to your supply chain.   One company we were selling to a few years ago wanted us to reproduce a report that alerted the buyer whenever a purchase order was changed by the supplier through the on-line portal.  So, we did that.  We also added a few additional bits of information that they could never get before.  One was how many customers were impacted by that delay.  The other was how much revenue was impacted.  With this new information, the buyer can instantly see the priority in which they need to tackle these late purchase orders; some changes had no impact at all – the orders were just replacing safety stock.  Others drove millions in potential revenue.  This simple addition significantly reduced the time the buyer spent on chasing down late orders that really didn’t matter and allowed them to focus on the ones that did matter!

If I were to offer any advice to those looking at new supply chain software it’s this; your supply chain planning can be (and should be) a competitive advantage for your company.  You are looking for better planning because you recognize the flaws in your current system. By all means, ensure that the candidate software can address your current processes, but then work with the vendor to think outside of the box. You don’t want to do your current processes faster – you want to revolutionize your processes altogether. Only then can you achieve the supply chain transformation you seek.

Are you considering transforming your supply chain?  Have you just gone through the process? What were the results? Comment back and let us know!

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


Your supply chain is costing you money – Reason #10 Failure to adequately train your supply chain planning staff

Published December 12th, 2014 by John Westerveld 0 Comments

Supply chain career pathOver 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 posts here:

Reason #10: Failure to adequately train your supply chain planning staff

When you think about it, your supply chain planning team is responsible for making decisions that can impact millions of dollars. A bad decision can result in missed orders, significant inventory, or scrapped materials.

Yet, when you look at the background of many supply chain planning workers, you’ll find a huge variation in education and experience. From people with a basic education that worked their way up from the shop floor, to people with engineering degrees that fell into supply chain planning, to business majors who have never been to the factory floor, to recent graduates with a supply chain planning background, but don’t have real-life experience on how manufacturing and supply chains work.

Having worked with a cross section of these people, I’ve seen the very best and the very worst. The very best include people that not only understand supply chain from end-to-end, but can also come up with creative solutions beyond what the typical supply chain education can prepare you for.

The worse have me wondering why they decided on a career in supply chain at all.  These are the planners that don’t know and don’t care how supply chain works. They do their jobs moving inventory from here to there, opening orders that the system says should be opened, cancelling orders that the system says should be cancelled, yet never questioning why or whether it makes sense.

Why is this a problem?  Lesupply chain management training t’s look at a quick example. Have you ever seen a situation where some result from a system– whether a bill from the phone company, a stock report or MRP recommended actions have been messed up?  It might be a programmatic error but more likely it is caused by bad data.  So imagine that you are a supply planner and the MRP report is telling you to increase orders 10x for an expensive component.  Do you do it?  The computer told you to, right?  If you are one of those planners that just blindly execute what the system says to do, then you probably would order it.  However, better supply chain planners might question that recommendation.  They use their knowledge of how planning systems work to peg up to find the source of the change and determine that someone changed the wrong record causing the change and confirm with the planner that the change was intended.  By doing this, they could potentially save the company millions of dollars in excess inventory.

There will always be people that just want to do things the way they always have. Don’t want training and aren’t interested in learning.  However, there are also those people who have a real drive to learn and would like to understand supply chain better. These are the folks you want to do everything in your power to give them the education they need.

While traditional supply chain training isn’t the only way to get really good at supply chain (I’ve met some planners that instinctively “got” supply chain – and knew their way around the system better than most) it certainly helps to have a good foundational knowledge of supply chain concepts.  One very good source of supply chain training is APICs (American Production and Inventory Control Society).  They have multiple resources as well as two certification programs; CPIM (Certified in Production Inventory Management) and CSCP (Certified Supply Chain Professional). CPIM is broken out in to 5 modules that each have an optional instructor led review course.  At the end of each module, the student is encouraged to write the exam.  Once all 5 exams have been passed, you achieve your CPIM certification.  CSCP consists of three workshops followed by an exam for certification.  Many companies have paid for their employees to achieve their certification and some have even brought instructors into the workplace to do the certification training there.  In reality, providing training in this way is a win-win for the company and the employee. The company gains by having better educated planners, the employee gains by having a certification that is recognized my many companies around the world.

Supply chain is a very complex world. Yet, it’s one place where practitioners can have a huge effect on the business yet have minimal education…and I really think that’s kind of cool!  But your supply chain team could be much more effective if given the right tools and some basic supply chain education.

How did you learn about supply chain?  Do you have any education advice for people just starting out and wanting to learn?  Comment back and let us know!

 

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


Your supply chain is costing you money – Reason #8: Keeping supply chain information in silos (and preventing your users from making the best decisions)

Published November 26th, 2014 by John Westerveld 0 Comments

supply chain information silos

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 posts here:

Reason #8 Keeping supply chain information in silos (and preventing your users from making the best decisions)

Don’t ask… you don’t want to know.  I can’t tell you how many times I’ve heard that phrase from different people in different contexts.  Sometimes it’s true.  I probably don’t want to know.  Sometimes (like when I hear it from my son) I probably not only want to know, I NEED to know.  Not because I want to pry (well… maybe a little) but mostly because I care and if I know I might be able to help.

When companies deploy supply chain solutions, they often make the decision for users… “you don’t want to know”.  They do this by preventing them from getting (or making it very difficult to get) any more information than they absolutely need to do their specific job.  Sometimes this information limitation actually prevents them from doing their job adequately.

Sometimes this is intentional and necessary;

  • Some companies (especially publicly traded companies) restrict access to revenue / margin information to prevent unauthorized financial data from getting out.
  • Some companies prevent access to data to prevent trade secrets (or in the case of US military manufacturers ITAR regulations prevent foreign nationals from accessing manufacturing data)

Sometimes this is intentional and questionable;

  • One company I’ve talked to told me that they limit information to their planners because they wouldn’t know what to do with it… that it would just confuse them. But in my opinion, there are few things more complex than supply chain management. Planners are smart people and if educated (APICS training should be a prerequisite in my opinion), they likely will have no problem absorbing and using additional information.
  • In other cases, information is limited because of interdepartmental rivalries, for example, “I don’t want demand planning to see my supply planning information.  I’ll tell them what they are getting.”This is just plain wrong on multiple levels.  If you hear this rational, then I’d look at your management levels and how people are being rewarded. In today’s competitive manufacturing environment, the only metrics that count are how a change impacts the company’s goals.  Departmental goals should be secondary.
  • One reason I’ve heard many times is that we don’t expose this data because one group “doesn’t care” about the information from the other group; “Demand planners don’t care about supply information; Planners don’t care about what orders are impacted by a change they are making”. Deep down we all care about the impact we are having on the company.  I think sometimes “don’t care” is the result of “I can’t” or “it’s really difficult to”. Which brings us to the next section…

Sometimes information is limited because of the systems we use;

  • Many companies suffer from limited visibility across sites.  The primary reason is that companies often grow through mergers and acquisitions and sites will often have different ERP systems that are incapable of working together.  Even if you use the same ERP system but sites are at different versions, (or even the same version but different instances) you can have limited or delayed access to information.
  • Traditional ERP systems limit access to information by making it very difficult to get the information you need.  ERP systems are transactional and are designed to view information one piece at a time.  If you look at the old green screen interface that we used back in the 70s and 80s and then compare it to a modern screen from a traditional ERP vender, you’ll notice that while the “modern version” runs on windows, it still looks and behaves very much like that green screen terminal interface.
  • Want to see summarized information in a cross-tab?  This is typically very hard to do in a typical ERP interface and you usually would need to run a report.
  • Want to see your results in a chart? Better export that to Excel.
  • Want to do add some additional information to a screen?  Sure! Submit a request.  Several months and thousands of dollars later – here you go!  This is one of the reason so many decisions get made using Excel (see “Your supply chain is costing you money – Reason #4”)

Let’s look at an example of how information can change a role.  Let’s start with the customer service representative… the person on the phone taking orders.  In many cases, the only information this person may have is a standard lead time for order promising (if they are lucky they’ll have standard lead time by part.  In most cases it’s just a fixed lead time for everything. The problem is that the lead time is likely padded and over estimates how long it will take to fulfill the order.  The reason that the customer service representative is forced to work with such limited data is that traditional systems cannot quickly and accurately provide this information.  Imagine if you could provide the customer service person with a system that determined the “capable to promise” date. A date that given the current state of the supply chain, including component availability and capacity, accurately represented when the order could be fulfilled? Imagine, as well, a system that could even show what parts, supply orders and constraints are preventing the order from being completed on time.  What if in addition to the late items, the CSR had information about who was responsible for the items or resources that were late.  Do you think that would change the order promising function?

Now, let’s look at things from the other side – the component planner/buyer.  Let’s imagine that this planner was responsible for some parts that were going to be a few days late.  They may be able to get them here on time if they expedite the shipment… at a higher cost. Should they do it? In traditional ERP systems, it is a laborious process to peg up multiple levels through the supply chain to figure out if there is any impact (the order may be simply replenishing safety stock or it could be gating a multimillion dollar sale).  With an advanced planning tool, pegging is instantaneous and you can see exactly which orders are impacted and if enabled, the revenue and margin impacts as well.  Put this information into the hands of your planners and suddenly they are making decisions based on the impact to the company, not just to their own internal metrics (like expediting costs).

So what do you think? Would your supply chain be more efficient if users could get access to more information and that information were presented in a way that helps make better decisions?  Would you want your planners to be able to see which orders a shortage is impacting?  Would you want your customer service reps to be able to see why an order is late – right down to the component order that’s holding everything up?  Do you have an additional reason why some information should be restricted?  Comment back and let us know!

 

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


Remembering: Turning Visibility into Possibility by Don Gaspari, NCR at Kinexions

Published October 9th, 2014 by Melissa Clow 0 Comments

As we countdown the days until Kinexions (18 days!). I’m remembering our fascinating customer videos. Today I’d like to share the interview on ‘Turning Visibility into Possibility’ from Kinexions.

In this video hear, Don Gaspari, Director, Materials & Inventory, Global Operations and Logistics, NCR, speak about his time at NCR and their vision to leverage it’s market leadership in self service devices and applications to transform the way that business does business with consumers. To support the company’s vision, NCR’s Global Operations team has developed a “Next in Class” supply chain strategy to enable it’s manufacturing and distribution network to efficiently and effectively respond to customer requirement’s.

To view the video in its entirety, watch it below or here.

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


Unleash Pixar-like Creativity in Your Supply Chain Management Organization

Published September 30th, 2014 by Jonathan Lofton 3 Comments

pixer creativity in your supply chain management organizationI recently read “Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration” and it got me wondering about creativity within supply chain management organizations. There’s obviously a level of ‘magic’ at Pixar, for them to be able to create 14 No. 1 movies in a row.  Evidence that the principles they’ve developed has merit is easy to see as Disney Animation Studios, led by Pixar’s Ed Catmull (President) and John Lasseter (Chief Creative Officer), has now started producing blockbusters again (e.g.  Frozen, the top-grossing animated film of all time, surpassing the $1.063 billion earned by Toy Story 3) after a long period of so-so animation movies.

I’m always curious if success in one area/industry can be translated to generate similar success in other areas/industries. In this case I do believe there are learnings that can be applied to supply chain management.

So what makes Pixar so creatively successful?  How do they get from a movie that “sucks” to a blockbuster?  And more importantly, can supply chain management leverage these learnings?

“What I’ve learned running Pixar applies to all businesses.  I apply the term ‘creativity’ broadly … it’s problem solving. We are all faced with problems and we have to address them and think of something new and that’s where creativity comes in.”

 – Ed Catmull, FastCompany article, “Pixar President Ed Catmull On How To Run A Creative Business”

At the back of the book Catmull has a lot of bullet points around thoughts for managing a creative culture, which at the end of the day isn’t exclusive to ‘creative’ businesses, including:

  • Give a good idea to a mediocre team, and they will screw it up.  Give a mediocre idea to a great team, and they will either fix it or come up with something better.
  • Failure is a necessary consequence of doing something new.
  • The healthiest organizations are made up of departments whose agendas differ but whose goals are interdependent.  If one agenda wins, we all lose.
  • The process of problem-solving often bonds people together and keeps the culture in the present.
  • A company’s communication structure should not mirror its organizational structure.  Everybody should be able to talk to anybody.
  • Imposing limits can encourage a creative response.
  • Engaging with exceptionally hard problems forces us to think differently.

What stands out foremost in the book as the underlying factor of Pixar’s success is what they call the “Braintrust”.  The Braintrust brings together a bunch of smart, passionate people to review a movie as it goes through its lifecycle.  The folks that make up this group naturally include directors, producers, writers, and animators but it could also include individuals outside the typical ‘creative’ areas.  They use this Braintrust to create a healthy culture where people feel free to share ideas and to constructively criticize.  There are a few principles of the Braintrust that are vitally important:  The individuals must be sharp and passionate; the team has to put a lot of solutions out in a short amount of time; there has to be absolute candor – this is the premier guiding principle.   I think the ‘magic’ comes via another key tenant of the Braintrust – this group has no authority.  The group can’t make the director change the movie.  It’s their job to get to the essence of what’s wrong (Catmull says all Pixar movies “suck” at some point); it’s the director’s job to figure out how to address the feedback.

OK, so how does this relate to supply chain management?

Well, these periodic Braintrust sessions remind me a lot of Consensus Demand Planning and Sales & Operation Planning (S&OP).  Consensus Demand Planning incorporates various organizational views and possible biases on what the forecast looks like.  Others in the organization are required to collaborate and creatively determine how to best balance supply & demand while optimizing company objectives (margin, inventory, revenue, etc.).  At the end of the day, the S&OP team may have several suggestions on what to do … but it’s the Executive S&OP (the “movie’s director”) that has the ultimate responsibility for absorbing the options and deciding how best to drive the company forward.  So what if Consensus Demand Planning and S&OP looked and felt more like a group reviewing a movie’s “dailies” using Pixar Braintrust-like principles to collaboratively solve problems?

I tend to subscribe to “The Wisdom of Crowds” and believe that if we can leverage tools that give end-to-end visibility to the strong, passionate professionals in our supply chain organizations and break down walls to encourage & support real-time collaboration, we can also unleash Pixar-like creativity (and success).  In support of the Braintrust principles, below is what I currently see on the creatively collaborative SCM continuum.

creative braintrust supply chain collaboration
I’d appreciate additional wisdom from the supply chain crowd out there (I’m sure there are other applications, approaches and principles out there that are really creative and bleeding edge). Do you have a formalized ‘Braintrust’ type process and the supporting tools for creative SCM? What are you doing (or seeing) in terms of SCM creativity!?

 

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