All I want for Christmas is supply chain flexibility

BillDuBois

end-to-end supply chainIt’s that time of year again where moms and dads are busy gathering Christmas lists from their kids and ensuring they have exactly the right gifts under the tree. But for retailers, it’s a lot more complicated – they can’t just ask their customers to write letters to Santa; rather, they need a flexible supply chain to meet customer needs.

Impacts of seasonal demand

Wrangling demand signal information from independent toy manufacturers, clothing creators and electronics giants – whose interests don’t always match your own –  is easier said than done. And basing your sales forecasts on their word combined only with your historical data could leave you out in the cold.

Last year, Americans spent more than $635 billion during the Christmas season, accounting for up to 30% of annual sales for some retailers. With that kind of revenue on the line, it’s no wonder retailers around the globe have been gearing up for the big event for months. When it comes to delivering on your Christmas promises to customers, it’s not just which supply chain management software you use that matters. The quality of information you feed into it is key.

That information becomes even more vital in industries where forecasts are constantly changing the closer Christmas gets. Oftentimes, either you’re caught short and can’t respond to demand in time, or you don’t sell enough and are left with overstock. These seasonal surges in demand make supply chain management that much more difficult.

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5 supply chain management habits that will land you on the naughty list

AlexaCheater

supply chain management naughty list

It’s that time of year again when Santa’s busy making a list, checking it twice and trying to find out who’s naughty or nice. If you haven’t broken these ineffective supply chain management habits, you’re likely to find nothing but a lump of coal in your stocking come Christmas.

1. Working in silos

When it comes to achieving supply chain success, it can’t just be all about your own results.

That’s unfortunately often the prevalent mentality in siloed organizations. It doesn’t matter what’s happening in the rest of the supply chain, as long as your team is meeting its goals and objectives. Siloed processes, people and functions work toward their own goals in isolation, instead of working towards the health of the overall supply chain. These negatively affect response time, as it can take hours, days or weeks to understand the complete impact of a decision on the entire supply chain. So get out there and collaborate. Your supply chain and your social life will thank you.

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How the Supply Chain Planning System Stole Christmas

TaunyaMacDonald

cabbage patch kidThe year is 1983, and all my sister and I wanted from Santa was a Cabbage Patch Kid doll. We had been dying for one for months, and my sister and I even dressed as Cabbage Patch Kids for Halloween that year (see picture proof included). If you were a little girl (and some boys I’m sure too, fess up boys!) around this time, you likely asked for the same thing from Jolly old St. Nick that year. If you were not part of this craze, let me tell you it was not a logical fad during the home computer and video game revolution of the 80’s. Cabbage Patch Kids were homely fabric dolls with yarn for hair, and each one was unique and came with a name. During a time when toys were continuing to get flashier and included electronics, these basic dolls were the hottest toy going that Christmas.

Cabbage Patch KidsThese dolls were manufactured in Asia and typically shipped by boat. While this was a cost effective shipping method, the entire supply chain planning system wasn’t fast and took four to six weeks for the dolls to arrive on the West Coast. In the weeks leading up to Christmas of 1983, the Cabbage Patch Kids craze was at its height. It gave rise to something that we are all too familiar with now – the shopping frenzy and in-store brawls over a toy. Display tables were knocked over, fights broke out. All of this chaos was caused by the shortage of the dolls. Once the company saw that they were not going to have enough supply to cover demand, they tried to fly the dolls rather than ship by boat, but their long lead times prevented them from manufacturing enough of the dolls to cover this unforeseen demand.

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Insights from Kinexions Tokyo 2016

Dr. MadhavDurbha

Kinexions TokyoKinaxis hosted Kinexions Tokyo 2016 customer user conference event at the Canadian embassy in Tokyo. It was a stupendously successful event with many customers, prospects, and partners in attendance. The day kicked off with some very interesting and engaging presentations by Deloitte, Roland DG, Mitsubishi, and a Kinaxis keynote delivered by me. Here are some common themes based on the presentations and the conversations I had with the event attendees:

  • Organizations are looking to digital supply chains as a differentiator. With increased complexity and volatility in global supply chains, the ability to respond quickly to supply chain disruptions is becoming very critical. However, such transformation is not a big bang switch, but is a journey. Both Roland DG and Mitsubishi shared their experiences and their journey towards faster decision-making.
  • Companies are looking to significantly revamp their supply chain planning processes. This is due to increased realization that the current batch oriented planning processes are limiting their ability to run scenarios in real time and collaborate based on them.

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Balance and Segmentation – What the Election Can Teach Supply Chain

CJWehlage

supply chain balanceIf you haven’t already, please read Bill Dubois’s blog, “Latest Polls Show We’ve Lost Faith in Polls”. Bill speaks to three factors, unpredictability, high randomness and variability. In my opinion, these are factors that led to the pollsters being so far off on the 2016 US election, and how supply chain practitioners can help these pollsters to improve.

Multi-tasking, I was reading Bill’s blog while I was watching the 2014 movie Godzilla. The general plot, if there ever is one in the Godzilla movies, is that Godzilla is awakened by nature to restore balance, and defeat the MUTO (Massive Unidentified Terrestrial Organism). I have to admit, it was cool to see the MUTO walk down the Las Vegas strip and knock down the casinos.

Thinking about Bill’s comments on teaching pollsters, and combining with Godzilla restoring balance, it hit me. Regardless of where you stand, left or right, agree or disagree, we hope that balance will reset itself, sometimes incrementally and sometimes shockingly. When Godzilla and the MUTO’s final battle occurred, half of San Francisco was destroyed. The results of that ‘ReSetting” was shocking, and cool to see them battle along the Embarcadero.

Balance is also critical for supply chains. We must have an ability to monitor the supply chain, and detect when it goes out of balance. This is why mature S&OP’s are needed. I say mature, as most supply chains can detect the cost based – unit demand vs unit supply imbalance. The more difficult, and mature S&OP, is the value based, where, profit, opportunity, risk, and market share, are balanced. See Figure 1.

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What Does It Mean to be “Strategic” in Supply Chain, Anyway?

MelissaClow

This guest post comes to us from Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management.

Strategic Supply ChainEverywhere you look in the Supply Chain industry (including the Argentus blog), there’s lots of talk about how Supply Chains are becoming more strategic. It’s part of the big change taking place in the field – a shift that Supply Chain Management Review recently described as a “metamorphosis.” This function that – for decades – has specialized in bringing products to market on time, in the right quantity, is blooming into a much broader function with impact all over corporate organizations.

In short, Supply Chain is evolving from one concerned with tactics to one concerned with strategy.

But what exactly does it mean to be strategic rather than tactical in Supply Chain?

We don’t want strategy to be a buzzword – so we wanted to write this post to get a discussion going about what distinguishes strategy from tactics in Supply Chain.

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How Uber Parallels the 6 Design Principles of Digital Supply Chain

Dr. MadhavDurbha

Digital supply chainDigital supply chain is the “in” thing! Don’t take my word for it, though. Just google the term. You will come across many articles talking about how supply chains are being remade by industry 4.0, internet of things (IoT), 3D printing, big data analytics, cloud computing and so on. But what most of these articles focus on are the means rather than the ends for the digital supply chain. On a day-to-day basis I speak to a number of supply chain practitioners. Most of them tell me they are at some stage of evolution with their digitization strategy. However, much confusion exists in terms of what constitutes a digital supply chain. So, I decided to write this blog to share my point of view on the topic.

Supply chain digitization is not simply taking existing information and capturing it in a digital format. It is not about automating your existing SCM processes. It is not about layering in Sales & Operations Planning (S&OP) as a band aid to connect disjointed processes. It is about having the most current information to run your supply chain effectively, available on demand, so you can service your customers and grow profitably. In other words, think of a Google search for supply chain. You ask questions and you get answers!

Here, I will introduce 6 design principles that make up a digital supply chain. I will lean on the example of Uber, how it digitized the taxi experience, and draw parallels to digital supply chain. Let us take a look at these design principles:

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Three Supply Chain Risks that Will Get You Thinking Bimodal

AlexaCheater

Supply Chain RiskIn a world where everything is changing, staying in one place is the fastest way to find yourself falling further behind. The same is true when it comes to your supply chain. Remaining stationary in your processes, relying on inefficient technology, and refusing to keep pace is how successful companies find themselves lagging behind the competition.

It’s not just about who does it better anymore. It’s about doing things differently. That’s when breakthroughs happen. Unfortunately, many companies are still looking at their supply chains with a lens focused solely on efficiency and the bottom line. That strategy alone won’t yield long-term success. There has to be the opportunity for innovation, as well. It’s what drives new products and pushes companies into new markets.

Hence the industry’s latest buzzword – bimodal. Most often credited with coining the term ‘bimodal supply chain’, research firm Gartner describes it as a supply chain made up of two distinct modes. Mode one is about cost-saving measures and efficiency and appeals to a need for predictability, accuracy and reliability. It’s focused on maintaining the status quo and managing day-to-day operations.

Mode two is all about experimentation and driving revolutionary changes in how supply chains adapt to new risks and opportunities.

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