Kinexions: Is “User Conference” the Right Description?

Published November 28th, 2014 by Bill DuBois 0 Comments

Being a presales consultant (…by day, Late Late Supply Chain Show host by night) during the last quarter of the year, there’s little, if any, time to reflect back on what was the most successful user conference in Kinaxis history. To be honest, my reflections didn’t start until I read Josh Greenbaum’s post, “Women of the Supply Chain: Responsibility, Collaboration and Bathroom Lines”.

Kinexions is supply chain user conference the right descriptionMy first thought was “hey, there’ll be no collaboration in the bathroom” but then I realized he was referring to the gender ratio at the conference. Josh used the longer lines to the ladies restroom as a way to highlight the higher ratio of women at Kinexions.  I didn’t want to be the one to tell Josh that ladies go to the bathroom in pairs so that line would be double by default. Even so, Josh noted that ratio came in somewhat higher than the tech average at 23% but judging from this picture I would have guessed it was 50/50.

The heart of Josh’s post called out the reasons way women make great supply chain leaders. Josh quoted Trevor Miles as observing “women appear to be better at cooperation and collaboration and to be more open to alternative points of view, all skills that are valued in the supply chain world.”  Josh’s article got me thinking about the other groups that were there and made me question if the description “user conference” is the best way to describe Kinexions.

Doug Colbeth Kinexions supply chain user conferenceAs Kinaxis CEO Doug Colbeth stated in his opening remarks, it all starts with the customers and nothing is possible in our world without our customers. We logically think customer equals user which equals person hitting the keyboard and managing their supply chains with RapidResponse. However, there were people from the customer base that were non-users. For example, executives, who reap the benefits of a more profitable supply chain, or members from the IT community who can be more responsive to user requests but are not necessarily users themselves. The term user just seemed to leave a few people out. Doug also put to bed many misconceptions about Kinexions. For anyone who has googled the term Kinexions, it’s not a spa or an online dating site for supply chain professionals!? Thanks Doug!

Kinexions software companyThe second group was a unique one: prospects. Kinaxis is the only software company I know of that would let potential customers walk the halls freely and mingle with current customers. You couldn’t tell the difference between existing and potential customers as they had free access to all sessions. I don’t think Josh could have pointed out the prospects in the bathroom lines. Certainly there were break-out sessions designed for the more experienced user but we found those prospects looking for as much detail as they could get in these sessions. Do we now call it a “User and Wanna Be User Conference”?

Kinexions supply chain user conference analystsThe third group to note was partners. There has never been a higher level of participation from Kinaxis partners at Kinexions. We saw them on stage in the main session, hosting their own break-out sessions and in booths set up in the halls which allowed anyone to go a bit deeper on their offerings. This group has a mountain of user, deployment and supply chain strategy experience. Again, these groups are delivering value to the user community but are not users. The term user just got diluted even more. Partners are a vital member of the Kinaxis community so perhaps we should rename Kinexions to the “User and Partner Conference.”

Let’s move onto the fourth group: analysts. I’ll group both the supply chain and financial analysts together for this conversation. Obviously not users, this group is there to dig into the real user story. Sometimes it’s like playing a round of golf with a golf instructor. They’ve seen it all before so the only thing you can do is relax and swing like nobody’s watching. It’s the only way to get the most from this group in terms of feedback, insights and suggestions for improvement. We’re now up to the “User/Partner and Analyst Conference.”

Kinexions supply chain user conference marketingThe final group of “non-users” is the Kinaxis employees. All levels of sales, marketing, development and services were represented at Kinexions. Here’s a little known secret, for the staff of Kinaxis this is likely the most valuable event of the year. There is nothing like hearing firsthand how customers are maximizing the benefits of their RapidResponse deployments and validating those success stories with partners and analysts. I don’t think we can go with the “User, Partner, Analyst and Employee Conference.” However the theme of Kinexions for the last several years has been “Learn, Laugh, Share and Connect.” Perhaps the connotation of the term “user conference” should change to reflect the experience and not a single group of attendees. If you have ever logged onto the Kinaxis Community you’ll notice the “Learn, Laugh, Share and Connect” banner. So, my suggestion is that next year we refer to Kinexions as the Kinaxis Community Conference. Regardless of the tag line, everyone at Kinaxis is looking forward to Kinexions 2015. Hope to see you there!

 

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


Kinaxis on the road: 12th American Supply Chain & Logistics Summit

Published November 27th, 2014 by Melissa Clow 0 Comments
SCL Summit

The American Supply Chain and Logistics Summit, now in its 12th year, brings together senior executives from across the Supply Chain and Logistics fields to enjoy an unbeatable mix of networking, expert case studies, interactive debates and master classes over three exceptional days.

Join Benji Green, Director of Global Sales, Operations, Supply and Inventory Planning at Avaya for the Kinaxis supply chain optimization workshop on December 9th. Register using the link below to receive 25% off your registration.

December 8-10, 2014
Dallas, Texas

Learn More and Register for the Summit

Schedule Meeting

 

Posted in General News, Pharma and life sciences supply chain management, Sales and operations planning (S&OP), Supply chain collaboration, Supply Chain Events, 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


End-to-End Available to Promise Webcast

Published November 24th, 2014 by Melissa Clow 0 Comments

Just a quick post to let our readers know of the upcoming webcast, “End-to-End Available to Promise“.

This webcast will define available to promise (ATP) in dispersed and outsourced operations for environments with high demand and supply variability.  Traditionally, ATP has been done in a request – promise manner across each tier of the supply chain, which adds enormous latency to the decision process.  There is an urgent need to create capabilities that can manage the conflicts and complexities of the ATP process more effectively as it crosses multiple tiers and trading partners.

Join Lora Cecere of Supply Chain Insights, along with Trevor Miles and Kerry Zuber of Kinaxis, as they explore the definition, barriers and opportunity for ATP.

Citing various industry examples and both current and future use cases, this session will cover:

  • the difference between ATP and capable to promise (CTP)
  • what modeling in an ATP context should encompass
  • the different process and technology capabilities required along the ATP maturity curve
  • the Kinaxis ATP value proposition (with product demonstration)

Register now for the Thursday, December 11th  |  2pm EST / 7pm UTC

Speakers

lora cecereLora Cecere, Founder & CEO,  Supply Chain Insights
Lora Cecere is the founder of the research firm Supply Chain Insights, which is paving new directions in building thought-leading supply chain research. She is seen as a supply chain visionary. Lora is co-author of the new book Bricks Matter and the enterprise software blog Supply Chain Shaman. As an enterprise strategist, Lora focuses on the changing face of enterprise technologies. Her research is designed for the early adopter seeking first mover advantage.

kerry zuber supply chain business consultant kinaxisKerry Zuber, Vice President, Business Consulting, Kinaxis

As vice president of business consulting, Kerry is responsible for guiding the Kinaxis pre-sales consulting service, which specializes in establishing the value of the RapidResponse service for prospective clients and identifying specific solutions that fit client needs. Kerry also works closely with the product management and development teams to identify and define product enhancements that will help promote broader value to both prospects and existing customers.

Trevor Miles, VP of Thought Leadership, Kinaxis
As vice president of Thought Leadership, Trevor serves as an expert source for Kinaxis customers, prospects, industry analysts and journalists. Known throughout the supply chain field, he has published many articles, presented at various industry events, and is the primary contributor to the Kinaxis 21st Century Supply Chain blog.

Posted in Milesahead, Supply Chain Events, Supply chain management


Kinaxis Receives Two Awards at the Best Ottawa Business Awards Gala: Deal of the Year and Outstanding Company

Published November 21st, 2014 by John Sicard 2 Comments

Kinaxis Best Ottawa Business Awards Company of the YearLast night I had the pleasure of attending the Best Ottawa Business Awards in Ottawa, Canada where Kinaxis was recognized for Deal of the Year and as an Outstanding Company.

As an Ottawa headquartered company and a business that has been very successful over the past few years, we are delighted to be a part of the business growth and success of Ottawa.

I believe our success over the years can be contributed to our strong value proposition to our customers, as supply chain becomes increasingly important to large companies.

Our success can be seen in the 20% increase in head count over the last year – And we are continuing to grow! If you’re interested in joining our team, find out more about Kinaxis career opportunities at the upcoming career fair on Wednesday, January 21st, 2015 from 4:00–7:00pm at the Holiday Inn & Suites Kanata.

To view the other award recipients, please see bestottawabusiness.com.

Recognition in this category adds to the growing list of accolades Kinaxis has received: 2014 Canada’s Best Small & Medium Employers,  2014 National Capital Region Top Employer, 2013 Canada’s Best Employers for Young People, 2014 Supply Chain Pros to Know, 2014 100 Great Supply Chain Projects and 2013 Great Supply Chain Partner.

Posted in Awards, General News, Miscellanea


Guest Blog: Women of the Supply Chain: Responsibility, Collaboration and Bathroom Lines

Published November 20th, 2014 by Melissa Clow 0 Comments

Josh Greenbaum, Principal, Enterprise Applications ConsultingJosh Greenbaum, Principal, Enterprise Applications Consulting recently published an interesting blog that I would like to share with our readers.

Josh has over 30 years of experience in the industry as a computer programmer, systems analyst, author, consultant, and industry analyst. He founded Enterprise Applications Consulting in 1998 and has been a pioneering independent analyst and consultant ever since.

Women of the Supply Chain: Responsibility, Collaboration and Bathroom Lines

Hanging out with Kinaxis, the relatively small and always interesting supply chain vendor from Ottawa, Canada, never fails to be an eye-opening experience. It’s not just that I get to meet with a vendor and a loyal cadre of customers who are collectively pushing the envelope on all things supply chain, it’s that sometimes they’re pushing an envelope I hadn’t seen before in my peregrinations in the supply chain world.

This year’s Kinexions user conference was no different. What I heard from Kinaxis about taking RapidResponse, its in-memory supply chain planning product, further into the realm of collaboration by pushing users to self-identify their areas of responsibility represented an excellent strategic direction on the part of Kinaxis.

I also learned something from observing the lines forming outside of the bathrooms, which, if you’ll bear with me, I promise will actually reveal one of the reasons I like where Kinaxis is heading with RapidResponse.

I feel obliged to state unequivocally that I don’t usually pay much attention to plumbing and people, except when it comes to pure self-interest. But I couldn’t help noticing that the queue for the women’s room at Kinexions was one of the longest I had ever seen at a tech conference, other than my recent visit to Workday ‘s user conference.

Of course, what I’m really talking about is the proportion of women in attendance at Kinexions relative to both the number of men at Kinexions and the gender ratios found at most tech conferences. And while the lines outside the women’s room at the recent Workday conference that I attended were even longer, there’s an important difference between the disproportionate presence of women at a supply chain conference and the even greater disproportionality at a HRMS conference.

HRMS has always been, to be blunt, a comfortable domain for women in an otherwise all-male corporate world – comfortable perhaps more for the men than the women. This phenomenon is identical to the way minorities studying in the era of affirmative action were often shunted toward the social services – in order to serve their “people” – instead of being directed towards more challenging and intellectually rewarding careers in pure research, medicine, or, God forbid, the humanities. Similarly, HR was the woman’s track in business schools back when the women of my generation were getting their MBAs. This bias towards HR as a women’s field has continued, with a Forbes article from 2011 noting that 70 percent of HR jobs were held by women at that time. Judging by the lines at Workday’s conference, that ratio looks like it still holds.

When I started looking for data to back up bathroom line observation at Kinexions, I was surprised at how much women are represented in SCM, considering that the bias towards women in the HRMS world was never at play in SCM. One data point, from the National Center of Women in Technology (NCWIT), pegged the percent of women in operations research – the nerdy upper echelon of the supply chain world – at 55 percent in 2012, the highest percentage of the eight tech professions cited (#2 was database administrators, a profession where 37 percent of the positions are held by women.) This is a lot better than the percent of CIOs that are women – 24 percent – or the overall percent of women in high-tech – 26 percent – also according to the NCWIT.

So why are there so many women in supply chain roles? Maybe there is a natural bias, though one that speaks to women’s genuine strengths and not men’s discomfort. One interesting article in SCM World cited a survey of global supply chain companies in which 74% of men and 96% women surveyed believe women possess the special skills – labeled in the article as emotional intelligence, empathy and self-awareness – that are useful in managing supply chains. (This same article also claimed that only 10 percent of the senior leadership roles in the Fortune 500 were women – which means there may be a glass ceiling for the NCWIT 55 percenters who want to move up to executive positions.)

So it’s interesting to note that the number of women at Kinexions came in at 23 percent, according to the company, a number more in line with overall tech industry averages, but still higher than the percent of women who work at Google, for example (17 percent, according to IEEE Spectrum), and higher than what appears, anecdotally, to be the average at most tech conferences.

I asked Trevor Miles, Kinaxis’ resident deep-thinker, why there were more women at supply chain conferences like Kinexions, and his response dovetails nicely with those special skills I noted above. According to Trevor, women appear to be better at cooperation and collaboration and to be more open to alternative points of view, all skills that are valued in the supply chain world.

I know I’m riding a fine line between stereotyping and arm-chair sociology, but I don’t think the notion that women on average possess these characteristics in greater percentages than men is too far-fetched. What is certainly true is that supply chain planning and management don’t lend themselves to absolute truths and command and control hierarchical management. In the world of supply chain planning there are relatively few irrefutable numbers and an over-abundance of options and alternatives that need to be weighed carefully in order for an optimal decision to be made.

This means that trade-offs, compromise, collaboration, and a whole host of people skills tend to matter a lot in getting the job done. It takes teamwork, and not just individual initiative, to consider multiple and even opposing or non-obvious alternatives in order to run a supply chain. And that teamwork doesn’t just include fellow employees: Myriad stakeholders, sometimes working across multiple companies simultaneously, must be marshalled in the service of supply chain excellence.

The fact that there is rarely, if ever, a “one true number” or single, irrefutable way to solve a supply chain problem dovetails nicely with the value of tool like RapidResponse, which makes modeling and sharing different scenarios particularly easy and efficient . Indeed, the fact that Kinaxis’ RapidResponse enables a high degree of collaborative decision-making – its use practically demands collaboration, the consideration of alternatives, teamwork, and consensus-building – makes it less surprising that Kinaxis, like the supply chain world in which it lives, can draw a disproportionate number of women to its conferences.

Which leads me to Kinaxis’ plans for RapidResponse. The company has been putting a lot more emphasis on a feature that allows stakeholders to identify – in a social collaboration-lite function inside RapidResponse – the areas that they are individually responsible for and, therefore, willing to help with when a problem in supply chain planning and management arises. What this means is that when a constraint appears, or an order suddenly changes, RapidResponse is able to connect the different stakeholders who share responsibility for a particular product, supply, region, customer, partner, or what have you, and get them working collaborative on a resolution. It’s a way to take the natural collaborative tendencies of supply chain planners and managers – regardless of their gender stereotypes – and enhance those tendencies with a collaboration tool.

The other reason I like this approach is that it serves as a justification for my position on why general-purpose collaboration tools haven’t really set the world on fire, despite the incessant hype around these tools. What Kinaxis is offering is the opposite of a general-purpose tool: the company has picked an essential and well-known business process and injected a new, relatively simple, and highly valuable form of collaboration. Of course you could do this with a general-purpose collaboration tool, but it makes much more sense to have the collaborative process function in the context of the business process and its tool, in this case RapidResponse.

This responsibility function will have a lot of applicability to other areas where Kinaxis wants to take what is fundamentally a superlative planning tool. Areas like capital equipment planning, asset management, project management, and the like are ripe for the things that RapidResponse does best: to go where planning is hard and help manage the path to compromise.

Whether Kinaxis will simultaneously drive an even greater participation for women outside the supply chain world remains to be seen. But it’s important to note, considering the current sturm und drang about diversity in high-tech, particularly gender diversity, that there are domains like supply chain and tools like RapidResponse that seem to attract more than the usual number of women, for all the right reasons.

In an industry that liberally festoons itself with the trappings of hipness, the de facto status of women as a minority borders on the absurd, as do the excuses, even in companies with female CEOs, for the lack of women in decision-making positions. I doubt Kinaxis set out to upend traditional gender norms and favor women and their unique skills when it developed RapidResponse, but it’s nice to note that moving the needle in the supply chain world can also move the needle in the larger society in which we live. For the better.

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


Your supply chain is costing you money – Reason #7 Making decisions based on bad data (supply chain data accuracy)

Published November 19th, 2014 by John Westerveld 2 Comments
English: Book shelf

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:

Making decisions based on bad data (supply chain data accuracy)

I went into a store the other day.  I’d driven an hour to get there.  I went to that particular store because their web site confirmed that they had 12 units on hand of the thing I was looking for.  When I got there and went looking, I couldn’t find it… the slot was there but there was nothing on the shelves.  I found someone from the store and asked about my item.   Yes, the computer shows they had 12 units on hand.  They went looking at the shelf the computer said the item was on (the one I just checked).  Not there.  They looked in the back.  Nope, nothing. They searched the shelves around where the item was supposed to be. Nowhere to be found.  “I’m sorry sir.  It looks like the computer made a mistake…we don’t have any”.  Hmmm… So I went back home and ordered it from Amazon.

A couple things struck me about that interaction.  Having wasted time going to that store, I’d be less inclined to use that store in the future – at least I’d be much less likely to trust their website’s inventory.  The second is that it likely wasn’t the computer that made a mistake, it was a mistake made by a person or process somewhere along the way.  And finally the same types of mistakes and process failings that resulted in my wasted trip occur all the time in supply chain. In addition to losing customers like me, those mistakes result in bad data that cost manufacturing companies millions of dollars.

Bad data in supply chain seems like it should be a minor thing.  I mean, it’s just numbers right? Let’s look at some typical supply chain data errors and think about the potential costs;

Lead time
If the planned lead-time is longer than actual, you get excess inventories. If the planned lead-time is shorter than actual, you get stock-outs and late customer orders.

Bill of Material
The Bill of Material drives material requirements through-out the supply chain. Missing components, extra components, bad effectivity dates, incorrect quantity per values will result in excess inventories, scrapped items, inaccurate costing, late customer orders, stock-outs and increased WIP.

Cost and price data
Inaccurate price and cost information impacts decisions based on margin. It can make unprofitable products appear to be profitable, and profitable products appear unprofitable.  In accurate costs can also impact pricing decisions driving higher or lower prices based on cost assumptions.  Finally, inaccurate cost information may cause you to make incorrect sourcing decisions.

Part master – ordering rules (Lot sizing, policies, etc)
Part master data controls how the system creates new supplies.  Bad data here can cause you to order too much driving excess inventory or too little driving additional ordering costs.

On Hand Inventory quantity/status
Decisions on when and how much to order are based on how much inventory the system thinks you have.  If inventory quantities or status is incorrect, excess inventory, excess costs, late customer orders and stock-outs can be the result.

Routing
The routing table describes how material flows through the shop and includes information on how long work should be scheduled across each work-center.  If this information is wrong, material will end up at the wrong work-center or the right work-center at the wrong time.  As a result, you can expect increased WIP, late customer orders and stock-outs.

Safety Stock rules/quantities
Safety stock influences the inventory levels expected on an item by item basis.  In addition to mistakes when calculating safety stock or setting safety stock rules, safety stock values can get stale.  In other words, the inputs (demand variability, lead time, etc.) that went into setting the safety stock value at the time they were set, may not be valid now.  Inaccurate safety stock values can drive excess inventory, excess costs due to expediting, late customer orders and stock-outs.

Demand (Actual Orders)
Inaccurate order information impacts in two ways; 1) an unhappy customer – especially if they don’t get what they ordered and 2) Increased costs due to excess inventory, excess costs from expediting.

Demand (Forecast)
Forecasts are always wrong.  Yet forecasts are what drive the business in many industries.   When forecasts are wrong, the result is too much inventory of some items and too little inventory of others.   This puts you in the unenviable position of having to explain to your stockholders why you have excess inventory while at the same time can’t meet revenue numbers because of stockouts.

Historical demand
Historical demand is the record of what was sold and when.  Historical demand is used to drive statistical forecasts, safety stock calculations and more.  Errors here will cause inaccurate forecasts, excess inventory, excess costs, late customer orders and stock-outs.

Capacity data
Capacity information determines what amount of work can be done in a given work center.  In finite systems, orders will be moved around to respect the available capacity.  In infinite capacity systems, planners will manually move orders around to level load work centers.  If capacity information is wrong, you can expect to see overloaded or under-loaded work-centers, excess costs due to expediting, increased WIP inventory, late customer orders and stock-outs.

As you can see, there are a variety of ways that inaccurate supply chain data can cost you money (and I’ve really only scratched the surface here).  So what can be done?  There are a number of tactics that can be used to improve supply chain data accuracy;

  • Audits – At a company I worked at in a previous life they recognized, through an earlier failed ERP implementation, the importance of data accuracy.  As such, they implemented a weekly MRP data audit where several parts were picked at random and the part master, BOM and Routing parameters were checked and validated.  In my previous post, Reason #6 Not effectively managing inventory, I talked about cycle counting.  This is a similar type of auditing targeting inventory accuracy.  In both cases, the key to improvement is root cause analysis.  If data is wrong, simply correcting the problem just fixes the data issue for that part.  Understanding how the error occurred and fixing the process that caused that error means that the error is less likely to happen again.
  • Data responsibility/data security – Ensuring that the right people are responsible for a given segment of data and that only those people can change that data is difficult and can be frustrating for some.  However, the risk of not locking down the data is that there is no control… anyone can change anything.  In the vast majority of cases, people won’t sabotage data (although that can happen).  No, usually, bad data gets created because people make changes without fully understanding the impact of what they have done.  Again, in a past life, we had one lady responsible for all item master changes made to the ERP system. Any change needed to be requested via a paper form. This form needed to have various approval levels before she would make the change.  While it did slow things down and admittedly was relatively inefficient, it ensured that any item master change was well thought out and vetted before it was made.  As a result our data accuracy percentage was consistently in the high 90s.
  • Alerting and what-if – With more advanced planning tools, you have a few more options around how to identify and correct some types of data errors.  Automatic detection of errors like missing cost data, missing sourcing data, order policy mismatches can all be detected and alerts generated that inform those responsible of potential issues.  In addition, advanced planning tools enable, through the use of simulations, the ability to try different planning parameters to see what the impact would be without actually driving any change to actual production.

Data errors if uncaught can result in millions of dollars of losses.  That being said, with some focused effort and perseverance you can eliminate the majority of data errors and get your supply chain running like the well-oiled machine it should be.

What data errors have you seen and how did it impact your supply chain?  How do you manage data errors in your supply chain?  Comment back and let us know.

 

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


Live Webcast: Continuous S&OP for Life Sciences – Breaking the Mold

Published November 17th, 2014 by Melissa Clow 0 Comments

Live Webcast: Continuous S&OP for Life Sciences - Breaking the Mold

Just a quick post to let you know of our upcoming live webcast, “Continuous S&OP for Life Sciences – Breaking the Mold“, which we will host this Wednesday, November 19th at 11am EST.

Trevor Miles, VP of Thought Leadership, Kinaxis, will present on the following topic.

Webcast Abstract

Trevor MilesBusiness realities have changed so tremendously in the last thirty years that the traditional ‘plan then execute’ S&OP model has become highly ineffective. It is unable to facilitate decision making amid acutely complex supply chain networks, or within the time horizons required. This is particularly true for Life Sciences companies faced with varying regulatory requirements and aging product portfolios.

In response, there is an emerging recognition that operational information must be accessed and evaluated on a continuous basis, whereby decisions that may have once only been considered as part of a scheduled S&OP process can be made as needed throughout the cycle. In this capacity, process execution evolves into operational orchestration.

In this webcast, learn about the unique S&OP challenges for Life Sciences companies, the importance of changing S&OP mindsets, and how to break the S&OP mold from both a process and technology perspective.

Register now!

 

Posted in Demand management, General News, Inventory management, Milesahead, Supply Chain Events