Avaya’s Four-Year Journey to a Best-in-Class Supply Chain – SupplyChainBrain & Kinaxis Video Series

Published February 4th, 2015 by Melissa Clow 0 Comments

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

In this interview, hear Benji Green, director of global sales operations, outline the successes that the company has achieved – and the direction it intends to take next.

Green has seen some fundamental shifts in the supply-chain planning paradigm. One involves a continuing trend toward specialization: companies focusing their efforts on research and development, while outsourcing manufacturing. Another relates to a faster product-refresh rate, especially in high-tech. “It becomes harder to predict because your lifecycle’s so short,” he says. A third trend is globalization, with an exponential increase in the number of people involved in the supply chain, and a consequent extension of order lead times. In response, companies are looking to replace their vertically structured supply chains with close partnerships.

Planners face the challenge of dealing both with unexpected short-term changes in demand and the need to create longer planning horizons. As lead times become stretched, it becomes more important to have in place detailed contingency plans in the event that things go wrong. Companies need to acknowledge that the forecast will never be 100-percent accurate, and plan accordingly.

Check out: Avaya’s Four-Year Journey to a Best-in-Class Supply Chain


Communication among multiple parties becomes more important than ever before. “You’ve got to get data from the other company much faster,” says Green. In addition, top management needs to acquire new skills in dealing with key suppliers, including the ability to negotiate the appropriate contract terms.

Working with partner Kinaxis, Avaya has been on a four-year journey to improve its ability to react to real-world demand. Green says the company has had “a lot of success,” delivering its best-ever run times and inventory turns. Products include phones for both large and small companies, in addition to infrastructure such as servers and gateways that support global collaboration. Manufacturing is 100-percent outsourced. Most fulfillment is carried out with the aid of a third-party entity.

The changes were spurred by new management and its desire to improve return on investment, Green says. “The new leaders have a very aggressive vision,” he says. “We’ve made great progress.”

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


S&OP in Las Vegas! Let’s Learn, Laugh, and Be Entertained at the S&OP Innovation Summit

Published February 3rd, 2015 by CJ Wehlage 1 Comment

SandOP in Las VegasThis past week was the IE Group’s S&OP Innovation Summit at the beautiful venue of the Bellagio in Las Vegas. Kinaxis was well represented, especially with the wonderful keynote speech from Kathleen Geraghty from Celestica. Her keynote hit the main theme of the conference: S&OP Skills. Having attended and presented at many S&OP conferences, I was expecting the standard S&OP challenges of maturity and alignment with cross functional teams. The reason I found this conference surprisingly unique, is the focus on talent and skills.

Celestica’s keynote centered on “Planning with Predictive Power”, which is done as a managed service from Celestica. Having worked many years in the supply chain with the contract manufacturing firms, I find this managed service, sometimes called PaaS (Planning-as-a-Service), extremely intriguing. The contract manufacturer, Celestica, already manages manufacturing and inventory. They are best prepared to do the planning service. Kathleen spoke about managing demand planning and scenario modeling of the Brand’s S&OP process, with the goal of improving forecast accuracy to above 85% and modeling in minutes, not days.

smarter-faster-s-and-op-cycle

The benefit is directly in the inventory, as seen in Kathleen’s slide.

Sales-and-operations-forecast-planning

Celestica is providing the “talent” in this service. With the breadth of skills from being a contract manufacturer, Celestica uses Predictive Power and Kinaxis supply chain solution to insert the talent and skill in the S&OP cycle, directly impacting inventory, order fulfillment and cost.

The Kinaxis Workshop – Learn and Laugh
For the Kinaxis Workshop, my theme was “Laugh & Learn”. From the audience I heard they were pleased to take a humorous journey through S&OP, with follow on comments like, “that was great to break out of the typical S&OP materials”. As well, we shared the Four Keys of successful S&OP, with the audience participating by ranking their company against the keys.
Some of the highlights from the “learn & laugh” session…ambition 1000 mile journey

Laugh
1. The S&OP journey is quite an ambitious one. From the early days of using excel and having only supply chain people attend, spending a few years stuck in “Stage 2” doing just demand and supply balancing, to holding real-time tradeoff decisions. It’s a journey of a 1000 miles, but in the end, it does pay off… :)

 

2. We shared our war stories about breaking through the corporate culture, and the significant change management needed to adopt this S&OP process. Everyone has heard the saying about tradition, “We’ve always done it that way here…”

problems at the volume level

 

3. Ultimately, S&OP is about finding problems. And, done correctly, an effective S&OP will be able to not only spot the obvious problems at the volume level, but also the underlying issues at the mix/SKU level.

 

4. The S&OP journey leads to a team of leaders that make tradeoffs and decisions. It’s the mark of an effective leadership team to decide those tradeoffs for the best interest of the company. As well, some decisions center on “survival”, using the S&OP to know when to “not make a decision”…

supply chain foresight

 

5. My personal favorite ended on the foresight a supply chain leader needs to have. Steering his/her team to a mature, Stage 5, S&OP requires the ability to stand against people who say “it cannot be done”….

This image reminds me of my Apple S&OP days, and taking the team north of San Francisco for white water rafting down the Russian River….

 

Learn
The four keys to a successful S&OP are shown in the box below.
As I walked through the Four Keys, I had everyone from the audience fill out this form, ranking from 1-10 (low to high), how their company performs.

The summary results:
East West Integration: average of 4.8
North South Integration: average of 3.9
Volume and Mix: average of 5.9
S&OP On-Demand: average of 4.4
This is extremely interesting in that the better performing key was volume and mix. This is the ability to take a volume plan and quickly drill down to the mix/SKU level, testing the feasibility of the two, and having the ability to keep the plan feasible. This shows the high level of supply chain participation in the S&OP. Drilling up and down the product supply network is a core competency of the supply chain team.

The lowest Key was S&OP on-demand. I remember my days at AMR Research, and the questions I would get on S&OP cadence. People would ask, “Should I run a Monthly Cycle?” and “How often should S&OP be done?” However, the best ability is to revise the plan and take action anytime S&OP is at risk. Through my past 25 years, I’ve reviewed 106 companies’ S&OP processes. The SINGLE best practice is doing What-If Simulations. Not the kind of simulations that your Stats PhD does over the weekend with his/her Access database, but doing What If Simulations during the S&OP sessions. That requires Speed and Integration with your process and solution.

Speed can be best defined by a few Kinaxis prospects who attended our annual conference at Miramar (where Top Gun was filmed). Coming off the flight path after seeing the Kinaxis demo, these two certainly understood the need for speed…

Integration can only come from a planning solution that pulls the data, policies and structures together, from all the nodes of the supply chain network, running concurrent planning at the S&OP to the MRP levels, in ONE code, not multiple Modules with massive middleware & excel. This is a customer who is very intense about the Kinaxis One Code…

Standing inside the Bellagio, in the entertainment capital of the world, I know the IE Group attendees have been entertained, much beyond the standard S&OP sharing.

Let me know your Four Key’s ranking. Where do you stand against the average? For now, I hope you’ve “learned and laughed”.

Check out my slides below or on slideshare!

 

Posted in General News, Sales and operations planning (S&OP), Supply Chain Events, Supply chain 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 our customers. 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.

 

Posted in Miscellanea


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


S&OP: It’s the Journey, not the Destination

Published January 26th, 2015 by Melissa Clow 1 Comment

S&OP Innovation SummitJust a quick post to let our readers know that we’ll be at the 2015 S&OP Innovation Summit. This year’s event will be held at the Bellagio hotel, January 28 & 29, 2015.

If you plan to attend the conference, join C.J. Wehlage, Vice President, High Tech Solutions, Kinaxis, as he presents ‘S&OP: It’s the Journey, not the Destination’ on Wednesday, January 28th at 11:00a.m.

Event Details
CJ wehlageC.J. Wehlage will provide a true 360 degree view – as a practitioner, leading supply chains at Apple, EMC, Bose and Sony, as an analyst, running the high tech practice at AMR Research, and as a software provider, implementing RapidResponse.

Laugh and learn, as CJ presents the four keys to S&OP effectiveness and how the best in class execute S&OP from both a North-South & East-West integration, aligning demand and supply, as well as integrating finance. They tie volume and mix plans and perform S&OP on-demand, not just on schedule.

We’re a sponsor and invite you to visit us there and follow #SOPVegas on Twitter to get real-time updates from the event.

For more Kinaxis news, follow us on LinkedIn, Twitter or Facebook.

Happy Monday all!

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


How Anritsu Achieved End-to-End Supply Chain Visibility – SupplyChainBrain & Kinaxis Video Series

Published January 23rd, 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 Dave Stenfort, director of operations with Anritsu, speak about how the company achieved visibility of inventory and improved control over critical parts in its manufacturing supply chain. Anritsu provides testing and measurement equipment for research and development, manufacturers, and field and maintenance personnel.

Its top supply-chain priority is responsiveness, says Stenfort. Customers expect short delivery times for their precision equipment. To satisfy them, Anritsu is looking at how it can tighten existing relationships with suppliers. “Typically, material is the constraint,” he says.

Watch now: How Anritsu Achieved End-to-End Supply Chain Visibility:

The company is also working closely with its R&D group to fit new products into existing supply-chain processes. To survive in a sector marked by cutting-edge technology, Anritsu needs to differentiate itself through innovative products. That never-ending quest often requires dealing with new suppliers – a change that adds risk to the supply chain.

In addition, Anritsu is deploying a number of tools and information systems to streamline its supply-chain processes. As they become successful, organizations tend to grow more complex, Stenfort says. There’s a need to focus on “standard functionality.”

Recently the company combined a number of supply-chain functions into one internal organization, crossing lines between sales, corporate and other departments. The shift was considered to be an essential part of Anritsu’s efforts to reduce costs meeting customers’ demands for short order lead times, as well as standardizing systems.

Stenfort says it’s vital to achieve an integrated view of the supply chain. It helps the company to make better decisions, as well as turn around quotes in a matter of hours.

Today, with the help of the RapidResponse, Anritsu can see product in the pipeline all the way back to its contract manufacturers. Such capability “ultimately increases the likelihood of success in getting orders and meeting delivery commitments,” he says.

Posted in Miscellanea


How to Turn Your Supply Chain into an Innovation Engine | Guest Post from Erwin Hermans

Published January 22nd, 2015 by Melissa Clow 2 Comments

erwin hermans celestica  Is There a Third Option for Supply Chain Management Executives Looking to Revamp their SCM Operations? Our partner Celestica recently published the following article, ‘How to Turn Your Supply Chain into an Innovation Engine’. The author, Erwin Hermans, vice president of supply chain services, describes the areas to consider when turning your supply chain into an innovation engine:

  • An Enabler for New Business Models
  • Finding the Real Cost of the Supply Chain and Optimizing
  • Tune the Supply Chain to the Demand
  • Analytics is the Answer
  • How to Take an Idea into Practice

So, how do you turn your supply chain into an innovation engine? Let’s find out.

Highest quality. Lowest cost. On-time delivery. That’s how companies typically view an effective supply chain.

But what if that thinking was replaced with a new vision of supply chain? What if business leaders start to view it as an engine for growth and innovation, a differentiator, and an enabler of product realization and marketing strategies?

Today’s modern supply chains are more than just a back-end conduit to deliver products on time. An organization’s supply chain can deliver value that goes well beyond cost, quality and efficiency.

Let’s look at how the old way of thinking can change.

An Enabler for New Business Models

To look at how the supply chain can be an enabler, business leaders need to shift away from looking at it as a back-end operations function and instead, as a front-end enabler.

Companies like Apple and Amazon have built their businesses by thinking differently. Apple has cornered the market in its supply chain to gain an edge in volume and scale, while Amazon has made supply chain its core business. Apple leverages its scale to lock up supply of key components, thereby shutting out its competitors and shaping demand by constraining supply.

Let’s look at another example, one from the painting industry, where constraints in the supply chain forced different thinking.

In the past, stores had to supply a wide variety of paint colors and finishes based on consumer demand estimates, building inventory and tying up working capital. Today, stores are able to mix and create paint colors on the spot, allowing them to easily respond to changing consumer demands.

The innovation which allows this instant paint mixing to occur is enabled by a supply chain working together with the product management and marketing teams toward a unified goal, reducing the theoretical lead time of paint from weeks to minutes.

Embracing customization within the supply chain is not just confined to paint stores. Dramatic changes to business models through supply chain innovation can be seen in several industries, such as same day/next day delivery in the parcel industry, mass customization in the consumer PC market and a rapid cycle of new product introductions in the retail clothing space.

To replicate this model, organizations should ask themselves how the supply chain can be a catalyst for innovation in their supply chain by delaying product customization to the last possible stage, customizing at the warehouse instead of the factory. And if so, they must determine how the supply chain can help to facilitate the new process and be a differentiator.

Having an open mind when examining a supply chain can turn an entire go-to-market strategy on its head—launching new products and services, and opening up new markets for the business.

Another area to explore is how collaborating with key partners can help build a unique business model. One example is Best Buy, which enabled a services business, Geek Squad, to complement its retail business.

Let’s look at a few opportunities where supply chain can act as a catalyst for growth and innovation.

Finding the Real Cost of the Supply Chain and Optimizing

Simply looking at supply chain costs will not show you the big picture. Developing a total landed cost model that looks at all price elements of a product will unearth insights about the supply chain that can be a platform for growth.

For example, let’s look at a cloud-based infrastructure company that outsources its manufacturing to two contract manufacturers. The current market for their products is heavily centered in the U.S., while growth is expected in Asia. The company’s product is highly configurable with long lead time components sourced from suppliers in Asia. In addition, demand is highly variable resulting in adequate, but not great, on-time delivery performance.

The primary contract manufacturer builds their product in Mexico, within a one- to two-day delivery interval to customers in the U.S., while the second contract manufacturer builds in Asia, with a three- to five-day delivery interval to the U.S. In this scenario, which contract manufacturing model is preferred?

Only a data-driven optimization model can provide enough insight for a rational answer. In this scenario, the contract manufacturer with operations in Asia proved to be the right model due to an Asia-based supply base. Additionally, high variability in demand and proximity as a result of long lead-time components allows for a better response time to customer changes at a lower total cost.

Assessing total landed cost can also serve as the foundation for product and category managers to lead product segmentation and portfolio optimization strategies, and at a tactical level, it can lead to increased profitability and target price competitiveness. Organizations need to determine the total landed cost of its products, which includes many different variables and is not limited to manufacturing and transportation to successfully optimize product portfolio. If a company has a six month oversupply of product, this will factor into the total cost as well. Similarly, opportunity cost of perishable demand is another element that needs to be included to get the whole picture. Tying front-end and market information to the supply chain can help gain these insights.

Tune the Supply Chain to the Demand

Many companies worry about keeping a steady supply of inventory on the shelves instead of better understanding the ebb and flow of demand. Conventional wisdom suggests inventory placed closest to the customer will help meet demand. But what if inventory was replaced with information?

With the right data, organizations can ensure that product is not only available when the customer wants it, but also at the right time, in the right quantity and at the right price, giving the organization a competitive advantage.

Two key supply chain factors can make the difference: forecasting and lead time. Forecasting, coupled with product segmentation, can predict which product meets customer demand. Reducing lead time for the right products can allow for quicker response time to meet customer demand.

But just as the paint industry evolved from forecasting individual buckets of green, blue and yellow paint, to reacting to current demand by mixing paints in the store, a demand-driven supply chain could mean cornering the market for a new product introduction.

A supply chain that helps its business react to real demand helps build game changing products and business models.

Analytics is the Answer

Over the past few years, analytics has become an increasingly prominent term in the C-suite’s vocabulary. Most business leaders, however, have not figured out how to integrate analytics into their operations and how it can be a driver for innovation. Turning data into meaningful insights is a challenge, but one which can lead to new business ideas and processes.

For many companies, the simplest form of analytics is looking at customer demands and patterns; then leveraging the gathered insights to build innovative and differentiated services—delivering greater value to the consumer and the businesses bottom-line.

A wireless networking company, for example, used segmentation analysis to provide them with insights into market behavior for different customer channels. With the proliferation of new products and configurations, they had lost sight of the subtle market dynamics that were influencing their demand. Through segmentation and forecast analytics, they were better prepared to have the right inventory closer to the market segment with high demand for certain products and configurations.

The supply chain is an untapped source of this crucial business data.

How to Take an Idea into Practice

To look at how the supply chain can be a differentiator, organizations need to ask themselves a variety of questions:

  • What’s our new big idea?
  • How does our supply chain influence those big ideas?
  • What are the drivers behind customer behaviour that are being enabled by the supply chain?
  • How can our supply chain strengths be exploited to bring a new product or service to market?

To answer these questions, organizations need to start looking at their supply chain through the lens of the marketing and product management teams.

In general, the supply chain is an afterthought, brought into the fold late in the product design and manufacturing stage. Bringing marketing, product managers and even engineering teams into the supply chain fold can help enable big, creative ideas. When the supply chain is brought into the early ideation and design process, it can truly function as a hub for growth and innovation.

Going back to the paint example, when a hardware store sets a goal to deliver any color of paint to their customer within 30 minutes, it forces them to think about meeting that goal in a completely different way than simply shaving a day or two off of their product delivery times. Integrating a manufacturing process that takes advantage of the supply chain to customize paints in the store created a key differentiator.

Setting “Big Goals” will force that type of out-of-the-box thinking. Harnessing the power of the supply chain can help be the key differentiator to meet those goals and approaching the supply chain with an open mind can open up new markets and product lines.

To keep with the theme of paint, when looking at a piece of art, it is important to take a step back, and not focus on any individual color or stroke, but rather see the bigger picture of how all the elements work together.

 

 

 

 

 

 

Posted in Miscellanea


Will that be automatic or semi-automatic to manage your supply chain?

Published January 16th, 2015 by Christopher Hatcher 3 Comments

semi automatic software blog chris hatcherYears ago when I was in the army, one of the most memorable days of my mostly forgettable BASIC training experience was flipping the switch to automatic. Yes, we’re talking about the M16 rifle standard issue weapon for soldiers. We were trained on this weapon out at the firing range where we learned to hold the weapon steady, breath calmly, and ignore the clamor of dozens of shots ringing out through the earplugs nestled in our ears.

It was cold out in Missouri in the middle of winter, but it was a bit of a thrill to do what I’d done as a kid with toy guns. This was the real thing. Well, sort of the real thing in the sense that the weapon and bullets were real, everyone was dressed in camouflage fatigues with serious looks on their faces, but the targets that popped up anywhere from 50 to 300 meters away were just some special fabric that fell over if a bullet whistled through it.

What we learned was that the cowboys shooting from their hips and hitting their targets was a fantasy of Hollywood. Hitting the targets required patience, focus, and a bit of luck. Like most training in the Army, the thought was that if you do it long enough it would become ingrained in your psyche and muscle response. As it turned out, after months of training out at the firing range I qualified as a Marksman, but that was not the big thrill. The big day was actually at night when we were allowed for the first time in months to flip the little switch on the M16 to automatic. Up until that night, each shot was aimed, the trigger squeezed and the result was immediately apparent.

Either you hit the target and it plopped over or you saw a wisp of dirt fly up in the air a bit to the right or left. With the switch now set to automatic each second of squeezing the trigger spat out 10+ bullets. Even better was every 5th bullet being a tracer round so they glowed red as they buzzed through the air at 3300 feet per second. I can’t remember if I actually hit any targets that night, but it was so cool to try the automatic setting and live the Star Wars experience for a short moment in time. That was 30 years ago.

Now what does this have to do with managing a supply chain?

Or as my old drill sergeant would have said it… “What the f%$*& do you f$#@&*ing think you’re f%^&@#ing doing, son?!

Hear me out. There is so much supply chain related data that we have access to now and even better, we have automated solutions that recommend the best thing to do in a given situation on a given day. That’s a good thing, because we don’t want to go back to managing everything. We need to manage by exception and keep our focus on the big problems. One thing to keep in mind is that many of our automatic solutions turn into black boxes over time. The smart guys that built the solution are long gone and it seems to be working fine, so just let it roll, right? Well, the devil is in the details, and despite the agony of digging through the logic of work done in the past, if the automatic answer is not as good as it could be, there are likely a few tweaks that could be done to the process to make it more fruitful in its results.

An example of this is the automatic pull in messages that can be acted upon when the available date of a sales order improves to earlier than its due date. Well, if no orders are harmed by pulling in the sales order to an earlier date, then why not do it? Remember first, that an automatic solution is based on certain assumptions and filters. Does the Automatic solution consider Priorities on the sales order? Perhaps an earlier low priority order can ship on time while a later high priority order will ship late due to constrained supply? Maybe the high priority order, although later, is for a very important customer so we should honor the priority setting and the supply should be set aside for a few days to ship to our valued customer?

What do we do? Flip the switch back to Semi-Automatic to manage your supply chain? In this case where constrained supply allows only 1 of 2 sales orders to ship on time, a supply planner should be able to intervene and decide which order to ship. A good supply chain software solution must first identify such cases where the semi-automatic (human involvement) approach is recommended, then be able to quantify the appropriate metric, which solution path is better, and finally notify the right individual to intervene quickly enough to make a difference. Software solutions like Kinaxis RapidResponse can provide the filtering, scorecard metrics, and alerting needed to guide the planner to make the right decisions. Over time, as the calculations that drive this semi-automatic approach are in need of fine tuning, the filters and metrics can be easily changed as necessary.

Running most operations in automatic mode is likely a wise choice, but it’s important to understand which parts of the process can trigger the responsible party to intervene when necessary. Automatic sometimes scatters a lot of bullets with a great deal of sound and fury, but semi-automatic usually hits the target every time.

Do you prefer semi-automatic or automatic to manage your supply chain? Or, perhaps a combination of both? How has it benefited you? Comment back and let us know!

 

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