And the most important personality trait for someone in supply chain professional services is…

Published July 2nd, 2014 by Lori Smith 0 Comments

Today we announced the appointment of our new vice president of professional services, David Kelly.  Welcome aboard David!

With the formalities of the press release out of the way, we thought we would introduce David in a more fun and casual way.  So enjoy our Q&A post as we put David on the hot seat and get to know better the newest addition to the Kinaxis management team.



Name your top 3 implementation success factors?

  • Leadership, strong team and an effective and reasonable plan. All successful projects require strong leadership to lead and mentor the team through the difficult and challenging issues that will come up. That team needs to be made up of members that take ownership and responsibility for their role and actions during the project. And most importantly, a sound plan that is based on reality and reasonable time frames is key to allowing the team to be successful and the leader to lead.

In the goal of driving high user adoption, what are the essential  “must-dos”?

  • Organizations need to drive effective user adoption, which is almost always tied to change management. When new processes are put in place that are wrapped around the use of new technology, we need to work with our clients to define an effective program that will allow users to seamlessly adopt the new process. As a team, we need to bring prescriptive approaches that our clients can tailor for their specific situation. This effectively leads to happy users, which makes happy customers.

In your experience, what element of a deployment tends to be the hardest to manage?

  • Very few projects don’t have changes in requirements along the way. These requirement changes come up for various reasons and many times can be very valid. But, the project team needs to be able to address these changes while still keeping to the original plan, and many times we need to push the new requirements out to a future phase. These can be difficult conversations to have and requires effective project management from the outset. At the end of the day, customers almost always appreciate a project team that holds them accountable and manages towards an originally agreed upon time line.

What is the most important personality trait or competency for someone in professional services (and applicable to supply chain professional services in particular)?

  • I feel that individuals need to be effective listeners who can clearly and articulately document what they have heard. This process makes the foundation for defining the project requirements and drives the clarity necessary to lock down the business and technical requirements. All too often, we end up in conversations with clients about “what was said” and that leads to issues down the road. If we can effectively listen to our clients and document what was said, we greatly eliminate any confusion.



What is one lesson learned or take-away from your previous roles that you will bring to Kinaxis?

  • Problem solving is the responsibility of every individual, and every individual should feel empowered to solve problems. Every day we will encounter challenges and the most efficient way for the team to progress forward is if individuals can clearly define the problem ahead of them and define the best path forward. Empowered team members lead to greater efficiency and happier employees.

Has anything surprised you about Kinaxis so far?

  • The culture and talent of the individuals that work here. Everybody I have met is very excited about Kinaxis and the future, and this has created a fantastic culture as a result.

Supply chain is being called everything from “the leader of the next decade” to “sexy”. As someone coming into the field, are you buying it?

  • Supply chain clearly is a backbone to many industries and can drive greater sales and profits. As our customers rely greatly upon their supply chain and suppliers, having that visibility into supply chain challenges and the right tools to manage is key to success. So, yes, I do believe that supply chain is “sexy”!



Where did you grow up?

  • I lived in the suburbs of Washington, D.C. until I was 16 when my family moved to the suburbs of Detroit. I finished high school and went to college in Detroit and really consider myself a mid-westerner.

Favorite book?

  • Unbroken is one of my favorite books, it teaches us to never give up and always look for the positives in life.

Favorite motivational quote?

  • I love quotes and years ago bought the “Forbes Business Book of Quotations”. One of my favorites is “In this country, every man is the architect of his own ambitions” — Horton Bain.

Best advice you ever received?

  • Set 5-year goals that are manageable and attainable.

Posted in Best practices, Miscellanea, Supply chain management

I think our future supply chain leaders may be playing Hay Day…

Published June 27th, 2014 by Lori Smith 1 Comment

I read my colleague, Jonathan’s, post on Monday about the supply chain lessons that can be learned by playing Angry Birds.  I loved the analogy and have another game to add to the list.  Hay Day.  This is truly a supply chain game.  My 10-year old son is an avid player and, without knowing it, has become a supply chain expert.  In fact, perhaps this is where our future supply chain leaders are starting out!? 

For those of you who may not be familiar with the game, in Hay Day you run a farm. You grow produce and make other products, and then sell them through different channels – order deliveries, customers that come to the farm, boat orders, or at a roadside stand.  The money you make allows you to purchase additional equipment and resources to grow your farm and offer new products.  All the basic tenets of supply chain are present in full force…

  • There are multiple orders coming in from various channels and you have to figure out a way to deliver to the most customers to maximize your sales. And not all orders are created equal. Boat orders, for example, offer the most money, but involve a high-volume of long-lead time products that you have to deliver before a set deadline. And as in real life, you just never know what orders are coming.
  • The bigger your farm, your product offering becomes more diverse and complex.  You have to balance making products to sell, with making products that become a component of another product.  For example, you can sell sugar directly, but you also need sugar for all your baked goods and jams.  If you have an order for 10 cakes, you need to make sure you have all the butter and sugar on hand to make those cakes, and if you use the butter and sugar for that, you have to figure out what other orders you may not be able to fulfill as a result.
  • Capacity is constrained. Equipment can only produce so much in a certain period of time, and the silo and barn can only hold a certain amount of inventory. You want to make sure your storage space is used for ingredients that are always needed so they don’t become your gating parts. Likewise, you need to fill certain machines (again, dairy and sugar machines as example) to full capacity before you leave the game (overnight), so the machines can work in your absence so you don’t have idle or underutilized workstations.

I could go on and on…the examples are endless.

It’s been amazing to see my son build an understanding of pretty significant supply chain principles such as order management, customer segmentation, profit maximization,  capacity constraint management, inventory planning etc..

This past week though, he took things to a whole new level.  Previously, he was focused on his farm alone, but the sly little devil came to the realization that if he used the family iPad and his father’s iPhone, he could make their own Hay Day farms and use them as suppliers.  He made these farms feed his farm with the products he needed to fulfill his own orders.  Pretty cool.   And then he realized, in addition to having the feeder farms work on products for his orders, he could also buy any product off these farms (at crazy low prices because he controlled them) and then turnaround and sell them at his own roadside stand at a huge markup. Ok, so maybe this last part is more about gaming the system and undertaking a total money-making scheme, but it’s still astute nonetheless, and it did have him double his farm in a matter of a day or two.

Anyway, at one point, he was at the dining room table playing on all three devices simultaneously – now that’s what I call coordinating the extended supply chain!

I know computer games can get a bad rap, but in this case, I’m viewing it as hands-on training for his future career as a supply chain manager.  He did eventually turn off the devices to go play outside so he will be a well-rounded supply chain manager at any rate.

Posted in Inventory management, Supply chain management

What Angry Birds taught me about supply chain improvement

Published June 23rd, 2014 by Jonathan Lofton 4 Comments

A while back I was watching my youngest son play Angry Birds.  It was interesting to watch because he would start a level and not really spend too much time looking at how things were set up.  He might look at what kind of birds he had to work with, but for the most part he’d just start playing.  Once or twice he got lucky and freed all the birds on the first try.  Mostly he’d play several times and finally figure out how to beat the level.  When he beat it, he went on to the next level.  He didn’t try to get the highest score; he was more interested in completing all the levels in each of the different themes.

I would go back and play the levels he completed.  My goal was to get the highest score and to get all three stars completed for the level.  So I would study the layout, see what kind of birds I had to use and devise my strategy.  Of course it almost always took me a few tries to pass the level (and sometimes lots of tries)!

What I realized was that it’s a lot harder to improve a score than it is to just pass the level, especially if you do a lot of collateral damage the first time you win – that first winning score is high.  It can also be frustrating (sometimes I had to put it down and come back to it later).  The other thing I realized was that I probably could have approached it just like my son … just start playing.  No matter how much I studied the level before starting, I rarely got the highest score on the first try.  Although I didn’t often have to change my strategy, I did have to make some adjustments to what the birds were doing …  and yes, there were a couple of cases where I had to adopt a totally different strategy.  But truth be told, I got the high scores and totally completed the level the same way he got the original win: by seeing how things worked out and making adjustments – trial and error.

So what does this have to do with Control Towers and Supply Chain Optimization?  Before I get to that, there are a couple of other pieces of the puzzle for this particular “what I learned” lesson.  One came from watching a TED video, “Tim Harford: Trial, error and the God complex”.

What Harford set out to show is that the common link among successful complex systems is that they all evolved through trial and error.  The other came from participating in a “Human Centered Design” course that emphasized being willing to experiment; being okay with not having the “right” answer, trusting that you’ll find one.  And what was the method of finding that “right” answer?  You guessed it, brainstorming/collaborating and prototyping … iteratively!

The dots that were connected and what I learned from this as I thought about Control Towers and Supply Chain Optimization was:

  • You need maximum visibility when you’re planning your next move – you can have what you think is a great strategy, but if you can’t see how all the pieces fit, you’re going to churn for a while.
  • You may not have to totally change your strategy, but you do have to be flexible enough to make adjustments to how you configure and execute your supply chain.
  • It’s hard to improve your supply chain performance if you are starting off with a decent score but the faster and more agile you can be at adapting your supply chain, the better chance you have of maintaining and improving its performance, even when there are disruptions.
  • Supply chains are continuing to get more complex with more players that need to collaborate, and if the success of complex systems inevitably comes down to trial and error, then you need a way to speed up the trial and error process to become a lot more successful a lot sooner (“Knowing Sooner, Acting Faster”).

No matter how well you’ve blueprinted your processes (“studied the level”), you’re probably not going to totally hit the mark (“get the highest score with all three stars”) on the first try.  So it’s important to stay flexible and ready to adjust, remembering that when you’re trying to be optimal (get the ‘high’ score), it will probably be less frustrating if you follow the example of a child:  Just try a bunch of stuff and see what happens, knowing that’s how most successful complex systems come about anyway.

Undoubtedly I’m biased, but this all confirmed for me that RapidResponse is ideal in terms of giving you the ability to see your supply chain end-to-end, collaborate with the various players and perform a slew of what-if scenarios to determine in real-time what the impact of adjustments would be.

Oh, the other thing I learned … Angry Birds, like supply chain improvement can be addictive!


Posted in Control tower, Demand management, Supply chain management

Top 5 Reasons Why Soccer Players Make Good Supply Chain Managers

Published June 20th, 2014 by Bill DuBois 3 Comments

fifa world cupHave you been watching the World Cup? I have.

It’s made me think about some of the similarities between this game and supply chain. And because of that, I came up with the Top 5 reasons why soccer (football) players make good supply chain managers.

Comment below to let me know if you agree, disagree or have your own ideas about why soccer players make good supply chain managers!


5. They usually need extra time to get the job done.

Supply Chain Managers need extra time


4. When something goes wrong they’ll let you know about it.

Supply Chain Managers joke when something goes wrong


3. They constantly deal with disruptions.

Supply Chain Managers joke distractions


2. They’re always willing to take one for the team.

Supply Chain Managers joke team players


1.They can deal with issues on a Global scale.

Supply Chain Managers joke global



Posted in Jokes, Supply chain management

Celestica recognizes suppliers with its 2013 total cost of ownership supplier awards

Published June 16th, 2014 by Melissa Clow 0 Comments

On this Monday morning, we would like to share some good news with our readers: We had the great pleasure of being awarded a 2013 Total Cost of Ownership (TCOO) Supplier Award from Celestica, which recognizes suppliers that support Celestica’s TCOO sourcing strategy and demonstrate excellence in quality, delivery, technology, service, pricing and flexibility.Celestica Recognizes Suppliers With its 2013 Total Cost of Ownership Supplier Awards

Kinaxis is very proud to be awarded “Best IT Technology Partner” by their valued customer.

Celestica’s global network has over 3,000 suppliers making the competition tough. To be recognized as a top partner from all the other candidates is something we are incredibly proud of.

We’d like to congratulate the other winners as well! See the full list here:

Learn more about Celistica’s supply chain operation, by viewing past blogs and videos:


Posted in Awards, General News, Supply chain collaboration

The Future Supply Chain Workforce: Can Supply Chain Organizations Balance Their own Demand and Supply?

Published June 2nd, 2014 by Lori Smith 1 Comment

future of supply chain workforceThe central theme of the Gartner Supply Chain Executive conference last week was all about supply chain leading the next decade.  I too believe this to be the case – both out of necessity and because of the progressive evolution of the function. But a function doesn’t lead, people do.  So who are these people that will manage and contribute to supply chain management in the next decade?  Well, going by the sessions at the Gartner conference, there will seemingly be a lot of roles that will be difficult to fill, and for those roles that are occupied, they will be increasingly held by women and many millennial. The face of supply chain is most certainly changing, and it’s happening at the same time as the profile and dependency on supply chain is intensifying.  Ironically, for an industry that is all about balancing supply and demand, there doesn’t appear to be much balance when it comes to its own human resources going forward.  It’s time for supply chain organizations to do a reality check and apply some basic planning and course correction initiatives within their own internal organizations.

Consider these opposing trends that are driving significant resource gaps (thank you to keynote speaker, Linda Topping, Vice President, Chief Procurement Officer at Colgate Palmolive for some of the stats included below):

Increasing demand

# of supply chain jobs will rise 25% in next decade.

Shrinking workforce

25% of workforce will reach retirement by 2015.

How do you fill more jobs with less people?

Increasing capabilities required

Less than 20% of today’s workforce have the skillset required.

Depleting experience and lagging academia

As experienced workforce retires, key supply chain competencies will depart along with them. And while the number of supply chain university programs is increasing, the scope and depth of curriculum is lagging behind current needs.

As supply chains become more complex, the sophistication of the supply chain function is increasing and so too must the analytical capabilities of the people that run it. Where will that come from?

More millenials

Millennials will account for 36% of the workforce by 2015, and 75% of workforce by 2025.

Slow to change organizations

Millennials expect:

  • Personally fulfilling work
  • Sense of culture and community
  • Flexibility
  • Career movement
  • Flatter, less-hierarchical organizations
  • Social and collaborative environments
  • Highly technology-enabled work

Millennial’s want more out of their work environments and because of the industry’s resource constraints they will have the power to demand it. Who will fight or face this fact?

Increasing capability needs

According to a session I attended on “Revelations from Gartner’s 6th Annual Supply Chain User Wants and Needs Study” by Gartner analyst, Dwight Klappich, the basic conclusion is that while organizations talk about the urgent need for transformational and innovative technologies, for many, their activities and investments remain very tactical and focused on maintaining existing technologies.

Despite survey respondents citing that among their top supply chain challenges were the inability to orchestrate the end-to-end supply chain, and the lack of cross-functional collaboration, 61% of technology investments are made with the goal to reduce operating and support costs.

Continued investment in legacy technology systems

Paraphrasing the presentation, companies continue to spend on the technologies they already have in place; they are investing in what they know, instead of what’s new.

There is a disproportional amount of money going to just “keep the lights on”. Less than 20% of budgets are spent on technologies intended to transform the business, whereas upwards of 50-70% is spent on technologies that run the business.

Make no mistake, technology is a resource issue. Technology is what can enable efficiencies that require less people. Technology is what can arm supply chain decision makers with the advanced analytical capabilities that today’s supply chain complexity necessitates. Technology is what can satisfy the millennial’s appetite for effective and “cool” ways to work.

Ultimately, technology is what will enable the supply chain to lead in the next decade.

There is one trend that is going in the right direction I believe… the increasing quantity and prominence of women in supply chain.

I know this topic has been talked to at length, even on this blog (and we have an upcoming webcast on this topic as well – get more details here), but it hit home again for me at the Gartner conference.  It was satisfying and inspiring to say the least, to see that women represented the majority of the main-stage sessions – 5 out of 8 speakers in fact.  And they were informative and engaging speakers on top of that, leaving no doubt to anyone their credibility and effectiveness…not that this was something they needed to prove.  These were not women supply chain leaders; they were simply supply chain leaders.  And to me, that should be the goal as we look towards defining the next decade.  It shouldn’t be about categories of people, but about their skills, experience and success.

Having said that, I do believe today’s environment does favor a women’s strengths if we were to generalize.  I think Tom Peters (influential business thinker & co-author of In Search of Excellence), also a Gartner keynote, said it best. “Guys do hierarchy well, women do ambiguity well.”  In a time of complexity and variability, effective supply chain management becomes about consensus decision making and collaborative trade-offs. There is certainly an argument to be made that managing in these conditions could come more naturally to females (the same could be true for millennial with their innate social and collaborative predispositions).

The mission will be to make sure companies enable these leaders with the organizational structure, processes, culture, and technologies that are required to empower them in new and evolving roles.  Given the demand, those that don’t take this to heart will no doubt be scrambling for supply.

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Posted in Sales and operations planning (S&OP), Supply Chain Events

The more things change, the more they stay the same: Gartner Supply Chain Top 25

Published May 29th, 2014 by CJ Wehlage 0 Comments

Jean Baptiste Alphonse Karr


“The more things change, they more they stay the same”
- Jean Baptiste Alphonse Karr, 1849, Les Guepes.


Jon Bon Jovi “The more things change, the more they stay the same”
- Jon Bon Jovi, 2010, Greatest Hits.




Separated by 161 years, but the phrase is well known worldwide.

In my opinion, the highlight of last week’s Gartner Supply Chain conference was the Top 25 dinner.  The days of creating an “Academy Awards night” feel, with cameras and trophies is gone, but the purpose of a Top 25 remains.  Recognizing supply chain from both the financial results, as well as leadership, makes the entire audience applaud the direction we are going.  However, this year just felt flat.  Not much changed in the Top 25.  I made my “Bold Predictions” blog a few weeks ago.   Should have changed my approach and just gone with “Not so Bold Predictions”.  Thirteen of the 2014 Top 25 had either no change from their 2013 ranking or +/- 1.

gartner supply chain conference top 25

I understand the metrics are difficult to collect, audit, and balance between the industries, but I’m calling out a need for innovation in the Top 25.  The general content is good, but let’s bring back some pomp and circumstance, some excitement and some intrigue.

My thoughts on innovation:

  • Industry Top 10’s, with awards
  • Take the Top 3 from each Industry, slot them into a “March Madness” bracket, and have the Gartner Analysts vote each “game” to get to a Final 4, Final 2, and Champion
  • Kevin O’Marah’s idea: move some companies into a Hall of Fame, and bring new companies in
  • Do a Live vote – where the audience texts in the Top 3

Delving deeper into the 2014 Top 25 numbers

While the general Top 25 didn’t change much, there is significant learnings for new companies interested in joining the ranks.

Dell Drops out of the Top 25

While this was to be expected, since Dell went private, it’s significant as Dell has been a perennial member of the Top 25.  In many ways, Dell has been instrumental in elevating supply chain in both the corporate view and the media.  The Dell Direct model is well documented and has been studied at universities.  Hats off to the foundation that Dell has provided for our practice.  The lesson to be learned is to recognize that leadership, and communication of that leadership, is a core part of your company’s Top 25 rank.

Don’t think that one category can’t hurt you

Intel had another good year.  From 2013 to 2014, Intel’s Peer score went up from 756 to 908.  Gartner score dipped slightly from 515 to 475.  ROA went down a little from 15.6% to 12.8%, and Inventory turns increased from 4.2 to 4.8.  It’s the Revenue category that really hurt Intel, dropping them from #5 to #8.  Things were great from the 2009 to 2011 stretch:

Year                        Intel Annual Revenue (USD)

2009                       $35.1B

2010                       $43.6B

2011                       $54.0B


The Three Year Weighted Revenue growth was a determining factor in their rise to the Top 10.  However, the past few years have created a trend that impacts their Top 25 standing:

2012                       $53.3B

2013                       $52.7B

And with guidance on 2014 revenue being flat to 2013, it’s a critical time for Intel’s supply chain to stand up to the profit margin challenge.  The lesson learned here is that certain supply chain metrics can make a good story, but controlling profitability will always make a great story.

The real battle is between Amazon and P&G

I find it interesting, rather make that perplexing, when looking just at the Peer Opinion Top 10 vs the Gartner Opinion Top 10

garter 2014 top 25 supply chian peer opinion gartner opinion

Three companies made it into the Peer Top 10, but not in the Gartner Top 10: Coca Cola, Walmart and Nike.  On the reverse, three companies made it into the Gartner Top 10, but not in the Peer Top 10: Intel, Colgate Palmolive, and PepsiCo.

But, when you look deeper at the numbers, Amazon and P&G are the two contenders.  Amazon’s Peer and Gartner votes jumped.  In fact, their Peer vote is nearly the highest, being in the “3000 Club”.  Their crutch is ROA.  Investments in web services and fulfillment have kept them at sub 2.0% Three Year Weighted ROA.  When these investments bring revenue, watch out.

P&G still has the higher Peer vote than rival Unilever, and similar financials to Unilever.  The wild card for P&G is bringing back AG Lafley.  He’s known for bringing innovation, customer is boss, and moments of truth, as key concepts for P&G’s June 2000 recovery.  Going forward, I look forward to seeing how P&G’s supply chain can control/cut costs, bring innovative products to the market, and reach into the emerging markets.

Leadership and conference presentations can get you everywhere

Take heed all ye in the 26-50 rankings.  Sharing your success and leadership at conferences can vault your position.  Look no further than Lenovo and Seagate.  Lenovo has been visible, both from presentations of their supply chain success, as well as notable acquisitions.  Case in point, their 2013 Peer vote was 397.  2014 Peer vote swelled to 808.  My recommendation to Lenovo would be to get their story to Gartner (2013 to 2014 fell from 211 to 210).

Seagate was the biggest surprise as the new entrant into the Top 25. They’ve done a great job at managing the post Thailand flood challenge, where a significant number of suppliers in the hard drives and components were impacted.  Also, Seagate has done well to get the message out, through SupplyChainBrain interviews, guest blogs on The Storage Effect and presenting at the 2013 SCM Logistics & Manufacturing World conference.  The one number that stands out for Seagate is the ROA.  At 19.5%, they rank 3rd behind #1 H&M (26.7%) and #2 Apple (20.5%).  It’s an intriguing rank, so I had to check out the details.  Seagate’s cash dropped from 2011 to 2012 by nearly $1B.  I would think that’s in support of their suppliers who were decimated from the 2011 Thailand floods.  Then, Seagate improved their Net Receivables from 2012 to 2013 by $638M.

Seagate Balance Sheet:

CJ Wehlage Gartner top 25 dinner

Seagate has talked about their transformation, especially in postponement, collaboration and simplification.  These facets will have a positive spin on the cash and receivables.  The challenge for Seagate to be able to stay in the Top 25 is to move their transformation to a value driven model, leveraging an integrated S&OP that drives tradeoffs across the network.

All that being said, here’s my early 2015 “Not So” Bold Predictions:

#5 P&G

#4 Unilever

#3 McDonalds

#2 Amazon

#1 Apple

Please send me your thoughts on the Gartner Top 25 Supply Chain model.  Who do you think didn’t make it in the Top 25 that should have?  What factors would you add to make it more interesting?Enhanced by Zemanta

Posted in Miscellanea

Gartner Supply Chain Executive Conference – Why ‘Flash Boys’ want to Know Sooner; Act Faster

Published May 28th, 2014 by Trevor Miles @milesahead 0 Comments

new sales model vs old sales modelSeveral of us from Kinaxis took the annual trip to Phoenix for the Gartner Supply Chain Executive Conference. It has been interesting to follow the evolution of the conference from the early AMR Research days, when only a little over 100 people attended and no vendors were allowed, to a conference with over 1200 end user attendees (excluding Gartner and vendor attendees) in which the vendors are an integral part of the program. I am sure for some of the participants there are pluses and minuses that the vendors attend too. For those who prefer to keep the vendors at arm’s length Gartner still runs peer forums, which are very popular. The peer forums give the end-user participants an opportunity to discuss key adoption and change management issues in a ‘safe’ environment.

The level of interest at our booth was phenomenal. The knowledge these visitors had of Kinaxis was very high. The quality of the keynotes was excellent. The sessions were very well attended and very informative. Compared to 10 years ago the topic of SCM has matured tremendously. While most certainly we see a trend in the direction of self-serve and self-education, there is still a propensity toward following the old model of engagement.

I made a bold prediction that visibility would be a hot topic at the conference. In fact I predicted that the data issue at the heart of visibility would be a hot topic. I was correct about visibility, but not correct about the data aspect. The data aspect was almost a non-topic, but visibility was a hot topic. More importantly the discussion of visibility is maturing beyond the simple ‘lights on’, ‘where’s my stuff’ discussion, to a richer discussion of ‘is my stuff in the right place’ with all the attendant analysis of what are the costs and consequences of it not being in the right place, and what do I do about it?

schneider electric logoAnnette Clayton of Schneider Electric gave a great keynote about their supply chain transformation. The manner in which they have coupled customer and supply chain segmentation with end-to-end supply chain planning and visibility is phenomenal and an example for many. Annette referred to this as a ‘tailored supply chain’ in which they have 10 main customer segments, each with different needs, 4 main supply chain manufacturing models breaking out into 7 supply chain delivery models, all supported by 6 supply chain transformation axes. This was the best keynote by far. The transformation Annette has brought about in a short time is amazing enough, but they have tangible benefits to prove the value of these changes:

  • About 6 pt improvement in net promoter score since 2011
  • About 1.5 pt reduction in inventory as a proportion of revenue
  • Over €500M cumulative saving in 2012-13Tom Peters Gartner keynote

The one time the issue of data came up at the conference was in the Tom Peters’ keynote. Tom was as entertaining and bombastic as ever. On his blog Tom writes that

Logistics have always been important. No doubt of it. (My first slide is a quote from General Omar Bradley, commander of U.S. forces on D-day: “Amateurs talk about strategy. Professionals talk about logistics.” Incidentally, the 70th anniversary of D-Day is just two weeks away.) But, if possible, the role of the logistics—supply chain—exec is becoming more important. By an order of magnitude. In the “Age of the Internet of Everything” and “Social Business” … everything truly is connected to everything else. And concocting and managing and harvesting maximum value from this ubiquitous web/moving target is arguably Corporate Job ONE.

The issue of data is embedded in his statement that “everything truly is connected to everything else. And concocting and managing and harvesting maximum value from this ubiquitous web/moving target is arguably Corporate Job ONE”.  Almost as an aside he mentioned the book “Flash Boys: A Wall Street Revolt” by Michael Lewis. There is a great 60 Minutes interview of Michael Lewis for those with little time to read the whole book, though I do recommend reading the book. Tom Peters quoted a passage from the book – “Steve, you’re costing me a hundred nanoseconds. Can you at least cross it diagonally?” – which refers to the laying of a high speed fiber optic cable between the Futures Market in Chicago and the stock exchanges in New Jersey that cost over $300M to shave off 3 milliseconds from the fastest route. At one point they needed to make 2 sharp turns to cross a road at right angles. Crossing the road diagonally would reduce the speed loss. They sold access to this cable to high-frequency tradersfor $10M, plus infrastructure costs, a pop. Apparently one HFT suggested that they sell access for a lot more so that the pool of companies that could access the cable was reduced

Now it must be noted that there is a lot of controversy about the legality of how the speed is being used to ‘front run’ many trades by high-frequency traders. Nevertheless the book brings out the real value of speed, whether to stock trading or to supply chain. Knowing sooner and acting faster are the business outcomes that add value. Solving the data problem in multi-tier supply chains is the equivalent of laying a $300M fiber optic cable to shave off 3 milliseconds. But until we solve the data problem we will not be able to make progress and reap the potential financial and operational benefits of supply chain visibility.

At some point speed is quality.Cook medical

The last presentation I attended had the most focus on data. Dave Reed of Cook Medical, a $2B medical device manufacturer, presented on “Optimizing Data Standards in the Healthcare Industry”. For those of you less familiar with the healthcare industry, there has been a 10 year debate about the adoption of serialization or an EPC (Electronic Product Code), but now the drug and device manufacturers have to comply. The California sequenced adoption requires that:

  • Manufacturers (generic and brand) must pedigree:
    • 50 percent of their products by 2015
    • remaining 50 percent by 2016
  • Wholesalers and repackagers must accept and pass pedigrees by July 2016
  • Pharmacies and pharmacy warehouses must accept pedigrees by July 2017

Part of the serialization is the adoption of GTIN (Global Trade Identification Numbers) and GLN (Global Location Numbers), which are part of the GS1 standard. And now the Apparel industry is looking to adopt GS1 too. I work with countless manufacturers that use different item numbers for the same item in different ERPs, let alone sharing a common item number with all their suppliers and customers. This level of data quality is one of the biggest barriers to end-to-end supply chain visibility, let alone end-to-end supply chain planning. While Master Data Management (MDM) is a start, until we adopt standards, like the radio and television broadcasting industries, we will be stuck in time consuming point-to-point integration.  I am very excited about the adoption of GS1 and look forward to watching the progress over the next few years.

It was a good way to end the Gartner conference, especially as I had dinner with Christian Titze, who is leading Gartner’s efforts in supply chain visibility, that evening. We had a lot to discuss.

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