Archive for the ‘Sales and operations planning (S&OP)’ Category

Top 15 Supply Chains to Admire from the Supply Chain Insights Conference

Published September 16th, 2014 by CJ Wehlage 0 Comments

CJ supply chain insights conferenceThe Supply Chain Insights annual conference was held on September 10-11, 2014 at the Phoenician in Scottsdale, Arizona. As an ex-AMR Research analyst, this was my favorite venue. Great memories here, as so much has changed in the supply chain research world these past 5+ years. Reliving the old days was made even more rich, as there was a panel session at the conference with Lora Cecere, Roddy Martin, Mickey North-Rizza and myself. All ex-AMR analysts on the stage, talking about the ‘Top 15 Supply Chains we Admire’.

CJ supply chain insights boardThere has been so much discussion on the “top” supply chain lists.  When we did the Top 25 list at AMR, we mixed a bit of science, art and influence.  While there was always passionate discussions on companies and metrics, the end goal was to raise awareness of supply chain as a practice.  I know the Sales and Marketing folks have lots of elaborate events to celebrate their achievements, and we in supply chain needed to pause from our 17 hour flights to far off places to negotiate a 2% reduction in cost, and celebrate our industry. 

The panel discussed the Top 15 Supply Chains we Admire, as built off the Supply Chain Index.  While other “lists” use ROA, Inventory Turns and Revenue Growth, I find Lora’s science very objective.  She is analyzing growth, inventory turns, operating margin, and return on invested capital, performance and improvement over time. 

The Supply Chain Index methodology was built on the belief that the supply chain is a complex system with increasing complexity. We believe it is the supply chain leader’s role to build and manage supply chain performance to drive year-over-year improvements which are balanced, strong and resilient. We find that most companies throw the system out balance and are able to only drive progress on a single metric, not the metrics portfolio.”

-          Lora Cecere, Founder and CEO, Supply Chain Insights LLC and Abby Mayer, Research Associate, Supply Chain Insights LLC

So, drum roll please…

The Top Supply Chain We Admire are:

  1.  TSMC (Taiwan Semiconductor)
  2.  Intel
  3.  EMC
  4.  Cisco
  5.  Apple
  6.  Seagate
  7.  Colgate
  8.  General Mills
  9. BASF
  10.  Eastman Chemical
  11.  TRW
  12.  Audi
  13.  Nike
  14.  Ralph Lauren
  15.  AB Inbev

Very happy to see two of my prior employers, EMC and Apple, make the list. I would highly recommend you read the Supply Chain Insights report,.  This provides the depth of analysis that created these rankings. With some AMR history on this, I have to say this is a great step in a more objective and mathematical measurement of supply chains. I find it more objective because it is broken down by industry.  I’ve always believed it’s too unfair to compare a life science supply chain (whose primary goal is to manage profitability across the drug lifecycle) against a consumer electronic supply chain (who’s primary goal is market share). 

At the conference, Lora held a session, “The Math Behind the Supply Chain Index” with Dr. George Runger, Arizona State, and Abby Mayer, Supply Chain Insights. This made it fun for us ex-AMR analysts, as we got to talk about our viewpoints and opinions, and Dr. Runger & Abby Mayer had the tough task of going through the methodology.

Some interesting insights:

  •  There were 0 companies from Retail, Paper & Packaging, Pharmaceutical, or Medical Devices.
  • ·Some “big” names from other lists, like P&G, Toyota, Samsung and Walmart didn’t make the lists.

During the panel, I shared my thoughts on Samsung.  They are a supply chain that I very much like, especially from an S&OP practice.  However, they seem to fall under the conglomerate issue, where multiple business units may skew the summary metrics.  Samsung has Visual Displays, Appliances, Semiconductor, Digital Imaging, Networks, PC/Laptop/Printer, Mobile Communications, and LCD panels.  Their S&OP is great across these business units.

  • Demand and supply volatility makes the supply chain “tough”.  And when the going gets tough, the tough get going.  Industrial networks rank highest, followed by consumer.   No healthcare networks made the list.
  • While 12 out of 13 improved resilience, 11 out of 13 lost ground at the intersection of operating margin and inventory turns.

CJ supply chain index

During the Panel, I was asked to comment on the 5 leading factors that make a difference:

  1.  A clear definition of supply chain excellence by leadership
  2.  Strong horizontal processes
  3.  Intentional design
  4.  Value of supply chain planning and analytics
  5.  Development of organizational capabilities

The one that stands out the most is strong horizontal processes.  For years, supply chains have evolved from the Plan, Buy, Make, Deliver model, building Functional processes, with Functional systems.  Each Functional area built “middleware” to bridge the gaps. Most of this middleware was Excel and Meetings.  As we made the supply chain more global and complex (see Supply Chain Insights findings on how we describe our supply chain today), we keep thinking functionally when we should transform to an end-to-end solution. 

supply chain insights lora cecere

 

Speed and Agility will improve dramatically when the process AND solution is focused end-to-end. 

You can see it with the high tech companies on the list.  Each has a story, or driving force behind their transformation to an end-to-end network.

TSMC: driven by a desire to manage the cost and sustainability at their nth tier suppliers, as well as TSMC and their customers, they continually are recognized as a strong partner from both their network as well as external organizations.  Tracking and optimizing costs at all your supply chain nodes requires an end-to-end strategy.

Cisco: for many years, Cisco has led the charge for raising the awareness of supply chain, through their risk management focus as well as their leadership and educational programs. Having a highly outsourced supply chain and managing the risks requires an end-to-end strategy.

EMC: while EMC’s product line is not as complex as, say, Samsung, they are strong at aligning end customers with supply chain with engineering.  One of the best tours is the EMC factory.  You will see how their supply chain is in lock step with test engineering.  This end-to-end focus allows EMC to manage the end customer environment, using manufacturing results to predict customer installed product events, and EMC pre-event resolutions.  It also allows EMC to drive detailed new product introduction success, aligning NPI dates with supply chain plans. 

Seagate: it took a big external event, the Thailand floods, to force Seagate to an end-to-end strategy.  Existence as a company was at stake, and Seagate had to support their suppliers financially.  During this crisis, Seagate leadership rose to the occasion, and created the journey as an end-to-end supply chain.

And, Apple: Having worked there, I would say their strongest ability is leverage. From cash, to product, to dates, to future business, they align end-to-end very tightly to leverage their supply chain network.  Some would call this “demand shaping”.   There’s been many views on the Apple supply chain.  They’ve ranked #1 in the AMR/Gartner list for 7 straight years, since 2008.

Trivia question: Who was the #1 Supply Chain prior to Apple’s 7 Year run?

Answer: Nokia

This brings me to a perfect conclusion: The Supply Chain needs to transform to an end-to-end, business leader role.

Nokia had a great supply chain, focused on the mobile phone hardware.  They failed to integrate software and watched other brands leverage digital content.  They failed to transition to the smart phone era, thinking their brand in mobile will allow them to “catch up”. 

“The high tech era has taught people to expect constant innovation; when companies fall behind, consumers are quick to punish them. Late and inadequate: for Nokia, it was a deadly combination.” The New Yorker, James Surowiecki, September 3, 2013.

Functional excellence is no longer good enough.  Supply Chains are in danger of being punished by consumers, who have the balance of power, if they don’t establish end-to-end control. And, not just for agility & speed, but to leverage the business strategy.


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


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 2 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?

  • Excess and obsolete inventory. S&OP is all about aligning manufacturing and sales. When you don’t make what you sell and don’t sell what you make you create inventory.  Lots of it.
  • Lost sales.  This is the corollary to the above.  Typically companies with poor planning don’t have too much of everything.  They have too much of things that aren’t needed and too little of things that are.
  • Lost market opportunities.  Companies without an effective S&OP are typically much slower to react to market changes.  This means that their competitors will beat them into new markets and products.

A well-executed sales and operations planning process can transform a company; allowing them to better control inventory and costs while meeting rapidly changing demand pictures.  It does this by gaining alignment across the sales, demand planning, manufacturing and finance organization.  In effect making sure all areas of the company are working towards the same plan and towards the same goal.  5 years ago, I wrote a blog post in which I discussed the 3 pillars of S&OP. They are;

Process:  Trying to run sales and operations planning without a clearly defined process is like driving in a city where no one obeys the rules of the road….you probably won’t get where you are going.   If there were no process driving S&OP, then there is a very good chance that key information would not be presented (or presented poorly), key people would not be in attendance and that critical decisions would not be made.  It is important that the structure, timing and agenda of S&OP is documented, published and adhered to.   If the process needs to change due to changing business requirements, those changes need to be documented and published.

Executive Commitment:  It is very difficult (bordering on impossible) to implement an effective S&OP process without executive commitment.  Why?  First let’s ask what is the purpose of S&OP?  The purpose of S&OP is to align supply and demand and the various departments contributing to that alignment. Departmental alignment can only occur if the top level department executives are involved in the key decisions…because those top executives have the decision making authority.  Sales and Ops is a failure if the representative at the meeting needs to go back to their executive to get a decision.

Effective S&OP Tools: This includes the tools to analyze the data, present information and make decisions.  Effective S&OP tools also include the ability to integrate the data that drives S&OP.  While Excel can be fine to do the initial S&OP model, moving to the next level of S&OP effectiveness requires a more integrated, responsive and collaborative application.

S&OP is a powerful tool if performed well. Inventory reductions, improved efficiency, improved customer service and reduced expedites are all expected benefits.  However, If there is no buy in, if executive commitment isn’t there, if data isn’t reliable and doesn’t drive action your S&OP process won’t delivery these results.

Have you experienced poor S&OP planning processes?  How about excellent planning?  Comment back and share!

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.

Learn More
Schedule Meeting
 
Supply Chain Insights Conference Image
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.

This exclusive event is designed for the line-of-business leader (Supply Chain Leaders, Chief Financial Officers and Corporate Social Responsibility Leaders) driving supply chain excellence and building value networks.

Panel Details:
“Top 15 Supply Chains to Admire”
Wednesday, September 10th at 10:30 AM – 11:15 AM in Room Westminster B&C
The Phoenician, Scottsdale, AZ

The “Top 15 Supply Chains to Admire” is the culmination of a two-year effort to evaluate supply chain performance and improvement for the years of 2006-2013 by industry by vertical for publicly-held companies. To make the list, companies out-performed their peer group on operating margin, inventory turns and Return on Invested Capital while driving significant improvement in financial metrics over the period.Supply Chain Improvement is based on a detailed analysis calculated factors for balance, strength and resiliency. This methodology, termed the Supply Chain Index, was developed in partnership with the Operations Research team at Arizona State University. As part of the panel, four ex-AMR analysts –Roddy Martin, Mickey North Rizza, Lora Cecere and CJ Wehlage– will share insights on the results and the trends.

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LogiPharma US
3. LogiPharma
September 16-18
Princeton, NJ

Kinaxis is pleased to be a sponsor and participate in panel discussion of North America’s #1 End to End Supply Chain Conference for Pharmaceutical and BioPharmaceutical Companies.

Supply Chain Visibility Panel Details:
“Getting Information from a Variety of Systems into One Location to Extract Information”
Thursday September 18th at 9:55 AM

Join Trevor Miles, Vice President, Thought Leadership at Kinaxis, along with supply chain executives, as they discuss ways to gather data from a variety of systems into one location for the purposes of gaining actionable information and insight to make decisions in real time.

Learn More
Schedule Meeting
Automotive Logistics Global Conference
4. Automotive Logistics Global Conference
September 16-18
Detroit, Michigan

Kinaxis is pleased to be a Silver Sponsor of the 15th Annual Automotive Logistics Global Conference.

The Automotive Logistics Global Conference is the place where the intelligence, contacts and expertise come together to address industry challenges.  Join Kinaxis and the most senior executives from OEMs, Tier suppliers and LSPs to network, learn and do business.

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Happy Tuesday all!

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.

In other words, while I didn’t dispute Lora’s findings, I was puzzled by her conclusions of supply chain planning systems. She seemed to be saying that benefits have not been realized from deploying planning systems, which didn’t fit my understanding of her position. When I asked Lora about her blog she replied that:

Supply chain planning, while over-hyped, and under-delivered by many technology vendors and consultants, adds value. The companies that achieve the highest levels of performance, and balance, in corporate performance make the design of their networks and their planning processes a priority. It does not happen overnight, and does require the right fit of technology to drive greater potential. The factors are the right data model, a frequency of planning that reflects the rhythms and cycles of the supply chain, and the right level of granularity of the modeling. The best planning systems are implemented carefully based on conference room pilots and focus on modeling the business. As a result, the best implementations are usually not the fastest.

The market has been scarred by two issues: the bad behavior of the best-of-breed solutions in the first generation of solutions, and the lack of depth of the extended ERP solutions. As a result, there currently a gap between what companies want and what they have. However, excellence in corporate planning matters. The concepts improve the potential of the organization to deliver higher levels of balance sheet performance. The greatest value today usually comes from a best-of-breed solution that is implemented by the same best of breed provider. The over-hyped promises of extended ERP implemented by large system integrators as advertised on signs in airports has not driven the levels of value that the best-of-breed solutions have.

Perhaps we have been looking at the benefits of  supply chain planning systems too narrowly. There have been additional benefits, and Lora points to two of them, namely our ability to absorb supply chain complexity – Lora refers to product complexity – and become a lot more efficient as measured by revenue per employee. I consider these huge gains. How could Apple have grown like it did both in terms of product and market expansion without greater efficiency and the ability to coordinate the flow of materials throughout the world? How could Procter & Gamble have expanded into the emerging markets without forming a number of regional planning hubs?  (Please note that I am using company examples which are not Kinaxis customers deliberately so that I cannot be accused of bias.)

Planning systems do improve supply chain performance when coupled with process and organizational change.  Did anyone see that wonderful spoof in which a daughter gives her elderly father an iPad who then uses it as a cutting board? This is Lora’s point. Lora is running the Supply Chain Insights Global Summit next week in Phoenix, and one of the agenda items is about the Supply Chain Index she has been working on. Unfortunately I cannot be there. I’d really like to be in the session that discusses the supply chain index Lora is developing.

us manufacturing output jobs

As I have stated already, the real question is what would have been the cost of running these massive supply chains without the IT investments? While we might have exhausted the benefits to be gained from large ERP deployments, I am not at all convinced that we have got even close to 50% of the efficiency gains we can achieve with new solutions based more on consensus building and collaboration than on optimization. I am one of those gray-haired men Lora’s refers to in her blog, but I am also a ‘digital native’, something that cannot be said about most of my contemporaries, who are typically ‘digital immigrants’ at best. Yet my contemporaries are the ones making large decisions about organizational structures, processes, and solutions that are rooted in mental models developed and perfected in the 1970s and 1980s. And far too many of the analysts and management consultants continue to position these mental models as best practice. They are not; They are yesterday’s practice.

digital natives versus digital immigrants

But let us step back from my polemic and look at the data. Of course it is impossible to separate out the investment in planning systems from robotics and other technology investments.  But we can look at the ‘digital revolution’ as a whole and make some pretty broad assumptions and correlations with planning systems. First of all this isn’t a recent topic. As early as 1990 Erik Brynjolfsson of MIT published an article titled “The Productivity Paradox of Information Technology: Review and Assessment” in which he cites even earlier analysis of the topic. Erik states that:

The relationship between information technology (IT) and productivity is widely discussed but little understood. Delivered computing-power in the US economy has increased by more than two orders of magnitude since 1970 (figure 1) yet productivity, especially in the service sector, seems to have stagnated (figure 2). Given the enormous promise of IT to usher in “the biggest technological revolution men have known” (Snow, 1966), disillusionment and even frustration with the technology is increasingly evident in statements like “No, computers do not boost productivity, at least not most of the time” (Economist, 1990).

erik brynjolfsson raching with the machine

However, in a subsequent article published in 2003 and titled “Computing Productivity: Firm-Level Evidence” Erik states that

We explore the effect of computerization on productivity and output growth using data from 527 large US firms over 1987-1994. We find that computerization makes a contribution to measured productivity and output growth in the short term (using one year differences) that is consistent with normal returns to computer investments. However, the productivity and output contributions associated with computerization are up to five times greater over long periods (using five to seven year differences). The results suggest that the observed contribution of computerization is accompanied by relatively large and time-consuming investments in complementary inputs, such as organizational capital, that may be omitted in conventional calculations of productivity. The large long-run contribution of computers and their associated complements that we uncover may partially explain the subsequent investment surge in computers in the late 1990s.

In other words:

  • There is a sufficient business case in the short term (12 months) to justify IT investments
  • While there is a significant delay between the investment and the full gains in productivity, the gains too are massive, much greater than first assumed

In the paper “Computers, Obsolescence, and Productivity” published by the Federal Reserve Board in 2000, the author, Karl Whelan, states that:

Real business expenditures on computing equipment grew an average of 44% per year over 1992-98 as plunging computer prices allowed firms to take advantage of ever more powerful hardware and, consequently, the ability to use increasingly sophisticated software. These developments have helped improve the efficiency of many core business functions such as quality control, communications, and inventory management, and, in the case of the Internet, have facilitated new ways of doing business. They have also coincided with an improved productivity performance for the U.S. economy: Private business output per hour grew 2.2 percent per year over the period 1996-98, a rate of advance not seen late into an expansion since the 1960s.

This is enough evidence for me. At the same time I have no doubt there has been extensive over promising and under delivering, and bungled deployments. Do we really want to go back to typing letters and mailing them to customers and suppliers? Do we really want to use a manual planning board to plan the purchase of components and assembly of a tablet that occurs in multiple continents across many organizational boundaries?  I am highlighting where many of the productivity gains have already been realized.

It is going to require a new generation of ‘digital natives’ in senior positions making decisions about organizational structure, processes, and supporting technology before we realize the full potential of IT investments. And the benefits we have realized so far are enough to justify continued investment.

human evolution technology

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!

At Last! (Photo credit: Wikipedia)

It’s the end of my first four weeks 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…

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.”

If you don’t see the video below, view “How Can Companies Respond Rapidly to Demand?” here.

Posted in Milesahead, Sales and operations planning (S&OP), 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.

shedding ERP vs shedding my garage clutter

Now came the decision as to what to do with it.  I could frame it and put it in my office. A home office that pretty much only I go into.  I could hand it down to my son. Or, I could sell it. I know you all would say “hand it down”, but our challenge is having a son with autism.  His ability to comprehend what the item means is limited.  His interests lie elsewhere.

So, as I was watching one of my favorite shows, Pawn Stars, I thought the next time I am in Las Vegas, this is what I will take into the Gold and Silver Pawn Shop. I did some investigation as to the process, best times to avoid the crowds, and how to get a fair price.  I found out two really important things:

  • The guys: Rick, Big Hoss, Chumlee and the Old Man, rarely, if ever, work the counter. Too many picture takers compromise the discretion of the customers.
  • Rick Harrison did something truly great for a young fan with autism.

CJ Wehlage Pawn StarHaving a son with autism myself, I was inspired by this story, and decided this “item” is going to be sold to Rick.  In January, 2015, I will follow up this blog with more details.  Suffice to say at this time, I did sell the item to the Pawn Stars, and in January, 2015, the episode will air. Until that episode airs, I need to keep the details to a summary level.

During the process, I had the chance to talk with the Pawn Stars team.  One of the most interesting –  well interesting to me, since my world is supply chain – is how they view their business.

I asked the guys what the key success factors were:

  • Know how to make a profit when buying and selling
  • Know your inventory, what needs to turn now, this week, this month, etc.
  • Think “cash-flow” at every transaction

This is so much like our world of supply chain. I asked Rick what the toughest challenge was to meeting these success factors. His answer, “determining if something is real or fake, genuine or hot”. Same applies to an end-to-end supply chain – working with bad data.

I love Rick’s view of “bad data”. He says you’re running your business on bad data today.  What you need to do is twofold. Firstly, do whatever you can to improve the data and secondly, continue to run and improve your business. Don’t wait to fix all the data and then run the business.

I’ve been in front of so many supply chain leaders who have this challenge. They have multiple ERPs, external nodes, Excel files, etc., and their data is bad. They feel that this bad data needs to be “fixed” first before doing any supply chain innovations. This is a trap that leads to an endless and expensive “master data” project. Expensive not just because of the project cost, but also because of the lack of focus on improving the business.

I challenge each supply chain leader to do what Pawn Stars does – keep the focus on:

  1. Profitability: as we improve our data, create simulation capabilities to understand the profit tradeoffs.
  2. Inventory: as we improve our data, build speed into our demand/supply processes that will drive down inventory, improving working capital and lowering carrying costs.
  3. Cash Flow:  as we improve our data, collaborate across your entire supply chain network to optimize cash flow, enabling the optimal margins for each partner, and the best cost to serve for the consumer.

Great lessons for supply chain, coming from the Pawn industry. Kinaxis RapidResponse not only provides end to end visibility of data, but also the planning models.  This critical, as you can see what bad data is impacting what model, and prioritize the focus on cleaning data.

To close, I couldn’t leave without some fun facts I learned along the way:

  • symbol of a pawnbrokerThe symbol of the pawnbroker is three spheres suspended from a bar.  Some say it’s from St Nicolas’s gift of three bags of coins to the three daughters of a poor man so they could marry.
  • Most expensive item sold at Gold and Silver Pawn shop? Four one kilo gold bars $125,000 USD.
  • Oldest item at the shop? Greek Didrachm (ancient Greek currency) dating back to 325 BC.
  • Rick’s is an expert at assessing the value of:
  • Gibson guitars
  • Rolex watches
  • Diamonds
  • Best night for business at the shop? Fight nights (boxing)
  • Who buys the most jewelry? Pimps
  • Percentage of pawns redeemed?  80%
  • Four items Rick Harrison will never sell?
  • Olympic bronze medal
  • Patriots Superbowl ring
  • 1490 Samurai sword
  • Original Iwo Jima battle plan

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


Case Study: How Nimble Storage’s Focus on Inventory Management Improved Visibility and Planning Cycle Times

Published August 25th, 2014 by Melissa Clow 0 Comments

Nimble Storage Inventory ManagementOne of the biggest challenges facing data storage companies is demands from enterprises for better performance and protection of their data.

Recently, I had the chance to chat with Stacey Cornelius, vice president of operations at Nimble.

Nimble Storage is a provider of flash-optimized data storage solutions with a powerful support model, unique in their industry. The company has a commitment to deliver the highest level of support and customer satisfaction with around-the-clock resources and four hour onsite parts replacement service.

Stacey spoke about how as their install base grew, the company faced challenges getting visibility into its more than 70 global inventory hubs and spare parts depots for its service parts planning business. Nimble was using a spreadsheet-based process to manage its service parts planning business. Data was imported and copied from a variety of sources and some of the key data was maintained only in Excel spreadsheets.

80% of the processing time included data collection and data clean up with approximately 50 steps to complete the planning process. This resulted in the process being error prone and not as responsive as was required for the growing business.

Here’s a quote from Stacey Cornelius, vice president of operations at Nimble on how they doing today:

“Nimble’s world-class customer service agreements are incredibly important to our business. As a past RapidResponse user, I know the breadth of capabilities and the flexibility of the solution. With RapidResponse deployed, we have the confidence we can keep up with our growing install base to achieve visibility of inventory at hubs, depots and parts in transit. We have the ability to quickly perform many “what-if” questions we face on a daily basis and have already reduced the time to make decisions to help our relationships with our customers.”

We also learned that because of their focus on inventory management the team realized:

  • On time delivery to customers across 70 inventory depots > 98%
  • Inventory availability > 98%
  • Service inventory as a % of installed base COGS < 5%
  • Weekly spare parts planning process went from 5 hours to < 30 minutes

Amazing! A big thank you to Nimble Storage for letting us tell their story.  We love to hear what you are doing with RapidResponse!

If you are interested in learning more about this customer, read the complete case study.

 

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