Streamlined Sales and Operations Planning: A Konica Minolta Case Study

Published August 13th, 2014 by Melissa Clow 0 Comments

Konica Minolta logoToday we have a great customer, Konica Minolta, that recently allowed us to write up their sales and operations planning story and I believe that it has merit in sharing with our readers!

At Konica Minolta, the IT Equipment Business team was struggling to get a quick and  comprehensive view of the global supply chain network.

The Japanese consumer electronics company didn’t have visibility into the impact of supply and demand changes on the business. As well, attaining agility and alignment across the supply chain was difficult.

Here’s a quote from Noboru Ota, Manager of SCM Planning, Konica Minolta on how they doing today:

“By integrating five systems into one, we gained a distinct advantage because multiple problems are solved by one product. We have the advantage of being able to streamline the operations. S&OP analysis has successfully changed from a weekly to a daily basis and now reflects the actual results, so the data is dramatically more accurate.”

And another quote from the case study:

With the deployment of RapidResponse, the team switched to daily calculations. Despite increasing the data size by seven fold (weeks to days), calculation times decreased from several hours to just minutes while supporting seamless transitions between volume and mix planning.

Very cool.

A big thank you to Konica Minolta for letting us tell their story.  We love what you are doing with the product!

If you are interested in learning more about this customer, read the complete case study. Trevor Miles also wrote a blog about Konica Minolta’s story when they presented at Kinexions Tokyo. Feel free to check it out.

 

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


Throw back Thursday: Applied Materials case study, ‘Agility enables Customer Satisfaction and Growth’ at Kinexions

Published August 7th, 2014 by Melissa Clow 0 Comments

Applied Materials case study, 'Agility enables Customer Satisfaction and Growth' at Kinexions

Here at Kinaxis, we are starting to gear up for this year’s Kinexions (our annual training & user conference). As we get closer, I’m remembering all the great interviews we were able to do with customers and analysts. So, on this ‘Throw Back Thursday’, I would like to share Applied Materials case study, ‘Agility enables Customer Satisfaction and Growth’ at Kinexions.

In this main stage presentation, Kinaxis customer Jim White, vice president of central operations with Applied Materials presents their story.

The semiconductor market is highly volatile, yet cyclical as well, in step with larger economic trends. Complicating matters is the highly configurable nature of nearly everything that Applied Materials makes. It’s a low-volume, high-mix world – making accurate demand planning extremely difficult. Watch to learn how ‘Agility enables Customer Satisfaction and Growth‘ at Applied Materials.

 

Posted in Miscellanea


“Storage Wars” Rescues Supply Chain Ignominy

Published August 6th, 2014 by CJ Wehlage 2 Comments

Take a good long look at this picture.  That’s my ignominy.  That’s my garage.

When we moved to San Diego, we loved the weather, we loved the ocean sunsets and we loved getting rid of our parka coats, gloves, scarves and tossle caps. Roddy Martin, my colleague from AMR Research, now with Accenture, often uses the term “ah-ha” moment. Up until this past year, my greatest “ah-ha” moment was watching my Boston neighbor walk away with my Arians Platinum 20-SHO snow blower.  I no longer had a need for it and he was a happy camper.  Never again was I to wake up at 4am, face the 5 degree temps, and walk up and back my driveway, blowing the snow into the woods… “Ah-Ha!”

But, in Boston, we had this dirty little secret.  A secret that  I could no longer keep hidden in San Diego.  In Boston, we had an “ATTIC”.  In San Diego, there’s no attics, no basements.  Stuff goes into the garage.  For years, we just put boxes into our attics.  Never thinking much about what it was, or why we needed it.  Occasionally, I would move the attic boxes around, putting labels on some boxes.  It made me feel like I had control on the attic.  Now, in San Diego, every box we collected for 12+ years, was sitting in the garage.

I had day-dreams of calling Darrell Sheets from the show “Storage Wars”.  They would film a segment where Dan the Auctioneer would open my garage door, and Darrell, Jared, Brandi, and Dave Hester would bid on my garage.  Wouldn’t it be great to collect $3,000 and have my garage cleaned out! Then, my wife and I would do the same old thing. Start asking questions, like:

  • What if there’s a family heirloom in one of these boxes?
  • How did we get to this point?
  • What is all this stuff?
  • Is any of this valuable?
  • Where do I begin working on this?

There I stood, looking at this garage, asking these five questions. And then I realized, these are the same questions I would ask about the ERP system when I led supply chain organizations.  In some cases, we had multiple ERP instances. In all cases, my “single” ERP Planning solution was made up of multiple modules…  Each with its own data structure and each with its own DBA team and development team.  Least we not forget, I had “boxes” of excel files as well.  I had multiple versions of the truth.

And that’s not the worst part!  My supply chain was made up of 1st/2nd/3rd Tier suppliers, 3PL’s, 4PL’s, distributors and retailers.  Last I checked, NONE of them were running my ERP system.  I had a whole other team called “BI” (business intelligence) that managed this. Agility was constrained by the lack of timely information.  People say “information is power”. I beg to differ. I say “informative decisions is power.”

Innovation leads to real change

So, as I pondered what to do about my garage, I borrowed lessons learned about we did with our ERP.

  Garage ERP System
What’s the primary purpose? Park car Transactions
Quick access to Key Decisions? Shelving on wall Planning System of Record
How to break the cycle? Think about the entire living space & storage Think about decisions in the end to end network
Informative Decisions? What do I need quick access to? How can this network know sooner & act faster?

The “ah-ha” moments are the catalyst to innovation.  Staring at my packed garage, the “ah-ha”, or better said “ughhh” moment, made me rethink the storage process and purpose of the garage.  The same held true back when I looked at my ERP system.  I had to rethink my planning process, since my network was made up of global nodes, using any old ERP system.  The “ah-ha” moment for ERP was that its purpose was a transaction system.  The end to end network required real time technology, from a single data source that could “know sooner and act faster”.

My garage is now cleared out and organized.  It serves the primary purpose of parking my car.  As well, I’ve mapped the end to end processes that require storage, resulting in quick access to key items in the garage.

 

Posted in Inventory management, Supply chain management


Innovative Approaches to Supply Chain Risk

Published August 5th, 2014 by John Westerveld 0 Comments

Imagine yourself in this scenario; You wake up at the usual time, and over coffee, you review the news.  As you flip through the articles on your iPad, you see it.  A major earthquake in Taiwan.  Then you get the e-mail. One of your key suppliers uses a supplier that is in the area affected by the quake and is effectively shut down for the foreseeable future… Uh oh.  It’s going to be a crazy, busy day.

When you get to work, you get your team working on this issue.  You don’t panic because you are ready for this.  You have a supply chain risk management strategy in place.  This key supplier had been identified and sure enough, you have a second source primed and ready to go.  As you put things in place to switch over to the other supplier you mentally pat yourself on the back.  It looks like you should be able to ride this crisis out without missing a beat.  A few hours later, your procurement head walks in the office.  “We have a problem.”   The alternate source uses the same supplier in Taiwan.  We won’t be getting any of this key component for the next several weeks…maybe months.   Your heart sinks as you pick up the phone to call your boss…

Think this is a pretty unlikely scenario?  Think again.  This scenario played out for thousands of companies after the Japan earthquake, the Thailand floods and numerous other smaller scale disasters.

Many companies have accepted the need for Supply Chain Risk Management because they understand that just such a scenario could occur and if they are ready for it but their competitors are not, they have an opportunity to gain market share.  The problem is most companies are relatively immature when it comes to Supply Chain Risk Management.

Innovative approaches to Supply Chain Risk‘SCM World, Innovative Approaches to Supply Chain Risk, Geraint John, July 2014′.

SCM World has published a report (login required) ‘Innovative approaches to Supply Chain Risk’ authored by Geraint John, Senior Vice President, Research that outlines an approach to bring your supply chain risk management to the next level of maturity.

Supply chain risk management is not simple otherwise, given the potential impact to corporate revenues, I’m sure that more companies would have robust supply chain risk management processes in place.  The report outlines some of the key challenges as follows;

  1. A variety of physical and non-physical risks need to be considered including geographic factors (natural disasters, political unrest), supplier quality and labor issues, volatility in pricing, customer demand, shipping, IT security, regulatory changes, etc.
  2. Supply chains are complex; You must understand risks not only to your suppliers but their suppliers as well (tier 2, tier 3, tier n). Adding to this challenge is the reluctance of suppliers to share their sources with their customers for competitive reasons.
  3. There has been a huge increase in the amount of data available, both numeric and unstructured.  How do you cut through the noise and find data that is relevant?  No off the shelf tools exist.  Analytics and mapping is available but many companies are not at the level of maturity to leverage these. The temptation is to act on gut instinct in the face of too much data but this can lead you down the wrong path
  4. There is a natural conflict between risk mitigation and supply chain efficiency.  Efficiency programs like lean drove us to reduce suppliers and cut inventory.  Supply chain risk management practice advises us to source additional suppliers and plan additional strategic inventories as mitigation strategies. It can be a real challenge to get executive approval for these measures in today’s environment.

The report outlines 4 key action areas that companies developing a more systematic, focused and proactive supply chain risk management approach need to address;

  • Identifying and assessing risk – This includes visibility across the supply chain including a good understanding of the companies involved.  Leaders like Cisco and IBM utilize dialog with suppliers and customers as well as visual risk mapping and scenario planning techniques
  • Quantifying and prioritizing risk – Given that all companies operate on limited resources, focus on those areas that will deliver the biggest benefits. One way is to plot likelihood of occurrence against business impact. While this approach can work well for recurring operational risks like supplier performance, it doesn’t work as well for hard to predict incidents like natural disasters.  One approach suggested in the article is that supply chain managers assign financial impact and time to recover factors at a site and component level.  This tends to identify critical but low-spend suppliers that may otherwise be overlooked.
  • Mitigating Risk – inventory tracking and dual sourcing are considered to be the most effective risk mitigation strategies.  Also increasing use of standard components, segmented and regionalized supply chain strategies and business continuity plans
  • Speeding Recovery – Business continuity plans that have been developed and tested with suppliers are key to rapid recovery
Innovative Approaches to Supply Chain Management Risk‘SCM World, Innovative Approaches to Supply Chain Risk, Geraint John, July 2014′.

For me, the key takeaways from this report are that effective supply chain risk management needs to be all inclusive – it must include layers beyond just your suppliers. You need to evaluate your supply chain based on the impact each supplier, site, and component might have on your business.  (I wrote about a similar approach here.)  Your supply chain risk management process must be integrated into the broader enterprise processes. It shouldn’t be considered an isolated process but instead should be a consideration in each decision made by the company.  Those were my takeaways, but I encourage you to download the report and form your own conclusions.  You may look at your supply chain in a completely different way.

What supply chain risk mitigation processes are you using?   Comment back and let us know!

Posted in Inventory management, Supply chain risk management


Throw back Thursday: Should we forget about the supply chain forecast?

Published July 31st, 2014 by Melissa Clow 0 Comments
CJ Wehlage forget about the forcast

Here at Kinaxis, we are starting to gear up for this year’s Kinexions (our annual training & user conference). As we get closer, I’m remembering all the great interviews we were able to do with customers and analysts. So, on this ‘Throw Back Thursday’, I would like to share ‘Should We Forget About the Supply Chain Forecast?’

In this round table discussion, Kinaxis customer Jim White, vice president of central operations with Applied Materials; Jake Barr, chief executive officer of Blue World Supply Chain Consulting; and CJ. Wehlage, vice president of high tech solutions with Kinaxis discuss: Is the forecast really dead? Should companies instead shift their focus to acquiring the ability to respond quickly to whatever happens in markets? Listen to what they have to say!

Posted in Miscellanea


David and Goliath: Lessons for supply chains

Published July 30th, 2014 by Carol McIntosh 0 Comments

David and Goliath | supply chain perspectiveI just finished a great book called ‘David and Goliath’ by Malcolm Gladwell.

The book references the story about two men, Goliath from the Philistines and David from the Israelites in the days of the Old Testament in ancient Palestine.

As most of you know, in the battle of David and Goliath, David, a small man, the underdog, was confronted by a giant, a man so formidable it would have seemed impossible for David to even survive such a fight. But he did. He won using skill and techniques that were not typical for this fight. Goliath was weighed down by his armor. David was flexible, responsive and targeted. He knew that he couldn’t rely on his size if he wanted to win.

Having been in supply chain for so many years, I immediately made a connection.

The correlation I saw is with organizations. I have worked with numerous organizations in multiple industries and it is disappointing to see that quite often the bigger they get the more difficult it is for them to make effective decisions. It is very easy for a large organization to, over time,  apply more and more armor. They develop more guidelines, decision hierarchies, rigid processes which end up making it more difficult for employees to achieve their goals than before. The end result is latent decision making, lack of flexibility, costly errors, and politically charged decisions.  The company may be doing well from a shareholder view but when you peel back the onion you see the issues. What impresses me is the caliber of the employees. They are many intelligent, forward thinking individual contributors tangled up in the armor.

On a positive note, I did recently have the pleasure of working with a very large company who acted like David. At one time I expect that they were the underdog. Their advantage stems from their culture. It is a company with a culture of rewarding innovation, empowering employees, providing a clear line of communication to senior executives, succinct communication in meetings and emails, and the use of process to ensure execution to plan.

As you can see, I am a big believer in the David’s. I work for a David and we are winning many battles. The story of the underdog winning the battle is always appealing to everyone. Just remember that it is with just cause and there is no reason why any company, large or small can’t maintain the skills of a David.

 

Posted in General News, Supply chain collaboration


How do the Best-in-Class Respond to Supply Chain Disruptions?

Published July 22nd, 2014 by Melissa Clow 2 Comments

“Chief Supply Chain Officers (CSCO) know that there is no such thing as a perfect plan and disruptions will always occur.”

This is the reality that every member of a supply chain team lives with every day. And while sometimes, a disruption might be small and easily offset, some disruptions are more significant and have a greater impact on the supply chain before they can be resolved. Aberdeen Group’s recent research report – The Chief Supply Chain Officer’s View of Supply Chain Disruptions: How the Best-in-Class Respond – takes a look at this reality and what leading companies are doing to prepare for these unexpected events.

So how does Aberdeen define Best-in-Class? Based on a survey of 151 end-user organizations, Aberdeen used the following metrics to identify the top 20%:

  • 97% average customer service level (84% for All Others)
  • 30 day average cash conversion cycle (59 days for All Others)
  • 12% total logistics cost as a percentage of revenue (25% for All Others)
  • 85% average forecast accuracy at the product family level

Regardless of where an organization falls on Aberdeen’s scale of maturity, none are immune to the disruptive forces impacting supply chains around the world. How an organization prepares for and addresses disruptions when they do occur is what sets the Best-in-Class apart. Figure 1 shows not only the top disruptions for the 12 months preceding Aberdeen’s research, but also shows how concerned leading organizations are for each type of disruptive event.

supply chain disruptions research

So what are Best-in-Class organizations doing to mitigate or plan for these disruptions? Aberdeen’s research highlights an “attitude of continuous improvement to constantly advance” as a distinguishing characteristic of those organizations identified as Best-in-Class. Two of the primary areas these organizations have targeted for improvement focus are supply chain visibility and supply chain collaboration. In fact, these Best-in-Class orgs are 50% more likely to focus on supply chain visibility and 37% more likely to focus on supplier collaboration than other organizations.

supply chain disruptions research aberdeen

If you’re interested in digging into this research further, a full copy of the research report is available for download here.

 

Posted in Miscellanea


What the Analysts Are Saying About…A&D Supply Chains

Published July 18th, 2014 by Bill DuBois 0 Comments

What the Supply Chain Analysts Are Saying About A and D

Are you looking for some reading material to pass the time on your next flight? Even if you’re not you should check out Supply Chain Insights, Supply Chain Metrics That Matter. For the past several years, Supply Chain Insights has been delivering this research series.  What caught my eye is that for each report, they do a deep dive on a specific industry and use a mix of financial data, survey research results and interactions with their clients to help get a better understanding of various industries’ supply chains.

I spread my Supply Chain wings at an Aerospace company and since Aerospace and Defense is a key vertical market for Kinaxis, the recent Supply Chain Metrics That Matter: A Focus on Aerospace & Defense report was downloaded on my laptop to read on my next flight. The research benchmarks A&D companies against other industries and looks at the top five A&D companies over the last decade. Although it didn’t give any suggestions on what to do when you find yourself in row 32, you know the one next to the washroom, it did discuss the challenges the industry is facing as well as offering up solid recommendations for areas of improvement.

From a challenges perspective, here are the highlights covered in this report.

The obvious challenge is the complexity in the A&D industry. The report uses the Boeing 747-8 International as an example. It has about 6 million components which are manufactured in 30 countries by 550 unique suppliers. Think about those design, sourcing and delivery challenges. I always thought getting through security these days was complex.

With such a heavy reliance on first, second, third, fourth and fifth tier suppliers and in some cases having only one or two suppliers for specific components, it’s easy to see how delays and budget overages can happen. A supply chain based so heavily on external sources is susceptible to more risk than catching a flight on time out of Newark. As Supply Chain Insights mentions, this is having a significant impact on the company’s bottom line.

Interestingly, to help address the issue of ensuring materials are available when needed; the research indicates that A&D companies have “developed some of the most advanced sourcing techniques and practices.” Companies like Lockheed Martin, are looking at new strategies for materials (raw or otherwise) that are harder to source, especially in the cases where increased Supply Chain volatility have thrown a wrench in their “Just In Time” approach. The challenge is balancing reduced material delays with rising inventory levels and longer Days of Inventory.

To help address these challenges, Supply Chain Insights makes a few recommendations that I think are spot on. Suppliers, in particular of materials that are sole sourced, play such a large and important role in the A&D supply chain, it’s vital that there be a focus on supplier collaboration and communication at every level.  A big part of this is increasing visibility into the supply chains to ensure they can anticipate and plan for potential disruptions. Focusing in these areas will help reduce supply chain risk, and make A&D companies better prepared to deal with inevitable disruptions when they do occur.

Thanks to Metrics That Matter, not only did I get some valuable A&D insights but it took my mind off of sitting in row 32 on a delayed flight out of Newark. The report covers a lot more ground than what I’ve discussed here, so feel free to download a full copy of Supply Chain Metrics That Matter: A Focus on Aerospace & Defense report here. (No registration required.)

Posted in Best practices, Demand management, General News, Supply chain collaboration, Supply chain management