Posts categorized as 'Supply chain management'

Design for the Supply Chain Pt 2: Innovative

JonathanLofton

A look at kanban from an innovative viewpointI recently began reflecting on if the “10 Principles of Good Design” applied to supply chain and how we design for it. In this blog I will explore the first of Dieter Rams’ ten principles for good design to see how it applies to the supply chain and what practices are emerging as we transition to Industry 4.0.

Principle #1: Good design “Is innovative” – The possibilities for progression are not, by any means, exhausted. Technological development is always offering new opportunities for original designs. But imaginative design always develops in tandem with improving technology, and can never be an end in itself.

Let me start by how I personally interpret these individual statements:

  • The possibilities for progression are not, by any means, exhausted.
    • I take this to mean that even with a new ‘twist’ added to it, the designed solution should be sound and adaptable enough to stand the test of time … to evolve. At the end of the day, it can’t be a fad.
  • Technological development is always offering new opportunities for original designs.
    • As technology evolves, the designed solution will not get thrown out but be further enabled to provide even more productivity, efficiency, etc.
  • But imaginative design always develops in tandem with improving technology, and can never be an end in itself.
    • The designed solution should have an eye towards what’s coming next. I believe this statement is what makes the previous two achievable even though I’m not sure anyone could have seen all that’s been enabled through technological advances in the past 10-15 years.

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Bring Out the Best in Your Supply Chain

KevinMcGowan
  • by Kevin McGowan
  • Published

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

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

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

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

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

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

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

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The Ongoing Impact of E-Commerce on the Supply Chain

BillDuBois
  • by Bill DuBois
  • Published

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

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

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

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Design for the Supply Chain Pt 1: Industry 4.0

JonathanLofton

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

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

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

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Supply Chain Centers of Excellence: Don’t Overlook Technology

BillDuBois
  • by Bill DuBois
  • Published

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

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

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

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

BillDuBois
  • by Bill DuBois
  • Published

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

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

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

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

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Reducing the Carbon Footprint of Your Supply Chain

NazliErdogus

carbon footprint represented by leavesTop negotiators from countries around the world recently came together to form the final draft of the Paris agreement on climate change. All eyes were on the group taking part in the two-week long conference, where discussions centered on decisions crucial to the planet’s sustainability for future generations and us.

Although not enforceable at this point, it’s still a big step toward acting on this critical issue. With the stakes so high, I thought it was important to reiterate several key points and promote awareness on what individuals and businesses can do to contribute to global sustainability at a collective level.

As individuals, there are lots of things we can do to help preserve our world and reduce our own carbon footprint. A wide range of options as simple as installing a smart thermostat, to controlling food waste, driving fuel efficient or hybrid/electric cars, or taking part in ride sharing are all ways we can do our part.

For businesses though, options and impact are much larger, particularly when it comes to implantation across the entire supply chain.

With demand patterns so volatile and competition in markets so intense, there is often less chance for businesses to consider what’s best to help our world while they also focus on trying to achieve other corporate level targets.

As an example, you could have a last minute order that needs to be delivered within a short time period, or you could have a disruption that will force you to change the type of transportation you originally planned. You could even see your forecast for your new product is way lower than what the market is demanding (hopefully you are using RapidResponse for your stat forecast!). However the change occurs, you have to act fast and recognize impact before it’s too late. And you need to consider the environmental impact of that change.

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Kinexions 2015 Key Themes and How They Relate to the Coming Year

BobFerrari
  • by Bob Ferrari
  • Published

Businessman holding crystal ball with the word 'future'The following guest blog commentary is contributed by Bob Ferrari, Founder and Executive Editor of the Supply Chain Matters blog and Managing Director of the Ferrari Consulting and Research Group LLC.

Kinexions 2015, the annual Kinaxis training and user conference, featured some fascinating speakers that delivered timely messages and themes for the supply chain management community regarding important competencies. Kirsten Watson of Kinaxis touched upon some of these themes in a previous blog posting. As we enter 2016, such messages will take on a special meaning, and in this guest contribution, I wanted to touch upon some of the key takeaways that stood out for this author and how they relate to the year ahead.

Jeff DeGraff, the ‘Dean of Innovation’ from the University of Michigan addressed the topic of connecting the dots of innovation as it relates to business and value chain strategy. A clear message that he delivers to C-suite audiences is that if companies seek growth, it has to originate from the speed and magnitude of innovation – “Innovation is your only friend.” A clear message delivered to the supply chain management community was that innovation occurs all across the value chain, and that supply chain teams are one of the few groups that can connect the dots vertically and horizontally.

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