By way of introduction, I am Joe Cannata, Kinaxis’ Certification Director. For the past several months, I have had the privilege to work with the broader Knowledge Services team and others across Kinaxis on designing a Certification Program which we are proud to begin rolling out today! This program is an important one because it marks a pivotal point in the company’s growth and maturity, and demonstrates the presence and authority of Kinaxis RapidResponse in the market as a leading and long-standing solution.
Before I get into the details, let me tell you that while working on this initiative, I came to the realization that developing the certification process is quite analogous to the supply chain. Start with concepts being tested, these are the raw materials. The raw materials are then processed into an exam blueprint, which breaks the concepts into major topics, and specific objectives for each topic. Resources and documentation are collected to use for creating the exam items. This is equivalent to the supplier phase. Using the blueprint like a bill of materials, the exam is manufactured using all of the concepts, translated into specific questions, or items, that complete the blueprint. Extensive QA is performed on each of the exam items before going into production. A final review is made before the exam is deemed ready. The completed, packaged exam is then sent on to a test delivery partner (the distributor) for distribution to our customers, partners and employees (the consumers) worldwide. With some exams being offered at proctored testing centers, those would be the retailers in this analogy. Even everyday products, such as exams, have supply chains, and yes, even some of the same supply chain issues.
At KinectED, our annual knowledge sharing event for Kinaxis employees and partners, we officially announced the launch of our new Kinaxis Certification Program. Now customers, employees and partners will be able to validate their RapidResponse knowledge and expertise. And yes, there will be exams!
A strong retailer-supplier connection can provide big benefits for retailers, suppliers, and even the end customer, but how does one go from a perfunctory partnership to a more intimate relationship that allows for things like common goal setting and joint improvement strategies? The answer is simple. Collaboration.
Unfortunately, building and maintaining said collaboration is a heck of a lot more challenging. I recently looked at two surveys examining the retailer-supplier relationship. The first, by SCDigest, gave an overall grade of B- to today’s retailer-vendor supply chain relationships. In its inaugural year, the 2016 State of the Retailer-Vendor Supply Chain Relationships survey focused on retailers and consumer goods manufacturers. What the results reveal is a very strong prevalence of an “it’s not us, it’s them” mentality coming from both sides of the equation.
According to the survey, 98% of retailers rate their relationship with their vendors as average or above, with 96% of vendors feeling the same way. Seems positive, right? Almost. Where there’s a bit of a disconnect is how each side views themselves and the other in terms of willingness and success at collaboration. Retailers feel their own knowledge and skill in how to collaborate successfully is a non-issue, ranking it as one of the smallest potential barriers to good collaboration. Vendors however disagree. They rank a lack of knowledge and skill in collaboration among their retail partners as the biggest single hurdle they need to overcome for supply chain collaboration.
Half of organizations playing in the healthcare and life sciences space are feeling the pain of managing overall supply chain costs. At least according to the eighth annual UPS Pain in the Chain Survey. While this survey swings on the logistics end of the supply chain pendulum, there are some good takeaways for those involved in all other areas of supply chain management as well.
Compiling results from more than 400 healthcare logistics executives across 16 countries, the results show rapid business growth is the major stumbling block in controlling costs for pharmaceutical supply chains, with 56% of respondents admitting they struggled with it in 2015. Following closely behind are fluctuating fuel costs (55%) and fluctuating raw materials costs (49%). Other pain points included aging IT systems (38%) and lack of visibility (38%). From a supply chain planning perspective, we see the pain of growth, coupled with a lack of visibility and aging IT systems as a significant cost and operations performance hurdle as well for the companies we deal with.
Strategies employed by those who claim success in managing costs include forming logistics and distribution partnerships (57%), leveraging optimization analysis (55%), pursuing vested logistics and distribution partnerships (52%), and making an IT investment (51%). This is another prime example of how people, process and technology can come together to achieve positive results.
Tumultuous weather is perhaps the most commonly thought of supply chain risk related to Earth’s climbing temperature. Undoubtedly, the impact of wild weather is substantial. An increase in the number of devastating hurricanes, earthquakes, wildfires, floods and droughts should be worrying to everyone, not just those concerned for their supply chains. In 2014, three of the top five biggest supply chain disruptions were related to natural disasters. Typhoon Halong in Southeast Asia capped the list, causing a 41-week disruption at a cost of more than $10 billion for companies doing business in the region. Are we looking at a future where Mother Nature is responsible for the majority of disruptions?
Companies will need to evaluate the risk of losing a supplier in a specified geographic region, and whether there’s a case that needs to be made to diversify where raw materials are coming from, having multiple suppliers, and how far to take contingency plans. The same can be true for evaluating different transportation options. Severe weather can cause substantial delays, or even total shutdowns, of certain routes or modes of transportation. Supply chain managers need to have backup routes and options available and at the ready, and need to be able to quickly and effectively run scenario simulations to determine which course of action will allow for the smallest overall impact.
Another thought I had is whether these severe weather phenomenon will cause shortages of certain raw materials, like what we’re currently seeing with cocoa. What will that do to already unstable price fluctuations in some global commodity markets? Will supply chains be able to cope with the potential added costs? Can we expect to see an increase in civil unrest (and the associated supply chain challenges) as communities fight over dwindling resources? A good supply chain risk plan should take into account all of these factors.
As you enjoy your downtime over the holidays, here are a few of our best blogs from 2015 to check off your reading list. So grab your favorite holiday drink of choice and read on! We look forward to continuing to bring you interesting and engaging content in the New Year!
Technology and the Supply Chain: What Does the Future Hold?
A recent report, ‘Technological Tipping Points’ by the World Economic Forum (WEF), takes a look into a crystal ball, examining the timing and impact of 21 ‘tipping points,’ which they describe as “moments when a specific technological shift hits mainstream society.” A staggering number of those points are things straight out of the futuristic cartoons and early sci-fi series I loved growing up.
Preparing Skills for the Future of Supply Chain Management
There is no question that supply chain talent development has become a top of mind multi-industry challenge that takes on different dimensions for both attracting and retaining key talent. The debate is often focused on whether strategies should address a perceived “skills gap” or a “training gap.”
What Your Mom Can Teach You About Effective Supply Chain Have you ever marveled at how some women just seem to have it all together? They manage to turn a hectic household into a well-oiled machine, while I can barely manage to keep my household of two up and running! In honor of these Super Moms, I’ve pulled together the top five reasons why you should be asking your mom for more than just relationship advice.
Supply Chain Risks: Big or Small, Plan For Them All The reality is that risk comes in many forms (including anticipated risk, uncontrollable risk and unanticipated risk). It’s constantly changing. And the amount of risk being faced by supply chain professionals has been on the rise for the past 20 years.
As pointed out by Alexa, Santa does operate one of the most complex supply chains ever imagined. And as important as Mrs. Claus’s role as operations manager is, I’d like to focus on the role of the elves…the unsung heroes.
The legend is that the elves furiously make toys all year long, but the reality is that the demand has outstripped the North Pole’s capacity for many years. Over 100 years ago, Santa and Mrs. Claus had to rethink their operations. They had to start to rely on consumer products companies such as Mattel, Hasbro, Lego and others, who could build toys throughout the year with their resources and instead of waiting for a demand signal they could push those toys out into their distribution network for storage. The big benefit for Santa is that he immediately extended his distribution network and was still able to achieve a very, very high level of customer service. He was sure that if they contracted carefully with these toy makers, there would be more and more happy children on Christmas Day every year.
Does your supply chain enjoy 100% on-time delivery? A workforce with a 0% turnover rate? How about a 100% customer satisfaction rating (at least among the Nice!)? No? Santa’s does. It’s widely believed Santa Claus has the most efficient supply chain in the world. And who am I to argue with a man who can deliver millions of presents all over the world in just one night.
But I’m here to let you in on a little secret. The key to Santa’s supply chain success isn’t magic (although there’s a healthy dose of that involved as well). It’s the mastermind behind his logistics, inventory management, master production scheduling, and sales and operations planning. So who is this wizard of supply chain management? Why, Mrs. Claus of course!
Yup, that’s right. While the big man in red is off on photo ops or headlining parades, Mrs. Claus is back at the North Pole working her hiney off alongside the suppliers (aka the Elves) to ensure every girl and boy gets the perfect gift for Christmas. From overseeing the production line, to managing supplier collaboration, to analyzing data as part of her intensive market research, she manages every aspect of Christmas. And let me tell you that’s no easy task.