Posts tagged as 'Inventory'

Is Poor Inventory Performance Holding You Back?

AlexaCheater

A man reviewing inventory performance on a computerOur partner Celestica recently published the following article, ‘Is your company being held hostage by poor inventory performance?’ The authors, Anandhi Narayanan, Senior Manager, Advanced Customer Solutions, Charles Thomas, Director, IT Customer Solutions, Stacey Greene, Director of Inventory Optimization and Robert Rejano, Processes and Applications Advisor, all with Celestica, describe the critical steps needed to drive inventory performance improvements.

Poor inventory performance can create a significant obstacle to growth and profitability. But adopting a strategic methodology designed specifically for inventory transformation can help eliminate the obstacles caused by poor supply chain visibility and open up new opportunities. If you’re looking to increase your inventory performance, we’ve outlined Celestica’s key suggestions and how they helped one company see substantial results.

Establish an executive focus and a transformation team to support it

Like any ‘transformational’ initiative, the process of improving inventory performance begins with understanding the compelling reasons for change. Once urgency is established, building the guiding team, establishing a vision and outlining goals are critical to winning over key stakeholders.

Make it Visible – You can’t improve it if you can’t measure it

Successfully increasing your inventory performance requires integration of data from all sources that make up your supply chain network. It’s critical to create a framework for the data that translates it into one clear body of information. Once this happens, data can then be analyzed in detail. To move from ‘basic analytics’, which gives insight into how the supply chain has operated in the past and what is required for the present and future, to ‘advanced analytics’, requires data to be contextualized in a way that makes it useful at the time when operators need to make a decision.

Flexible data models and methods to extract and load data are essential. The key to achieving meaningful results is a centralized data hub where normalization, standardization and storing of data can be performed. This allows the team to quickly develop and modify data models, without relying on multiple outside parties.

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Do your supply chain challenges have you feeling a little snowed under?

AndrewDunbar

A snowed in car represents challenges weather can create for supply chainsThe first day of spring is less than a week away but the Canadian winter is still wreaking havoc on local supply chains.

A friend of mine wrote off his beloved Mazda 3 last month after being rear-ended on a snowy country road outside of Ottawa. This unfortunate event kick-started an urgent need for a replacement vehicle that would fit his growing family and replace the car he’d loved for longer than he’d even known his three children. His wife, demonstrating both her love and a generous dose of pity for her grief-stricken husband, agreed to let him upgrade to a brand new Audi Q3. “Don’t worry my friend, the car of your dreams will be here soon. It’s already on a ship to Halifax!” assured the sales rep.

Now five weeks late, my friend’s wife is still driving him to work and her pity has all but evaporated. What went wrong you ask? It’s hard to believe, but the ‘car of his dreams’ is currently frozen to the ground at CN Rail’s Eastern Passage Autoport.

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What If You Could Take The Guesswork Out Of Forecast Planning? Guest Post from Osgood Vogler

MelissaClow
  • by Melissa Clow
  • Published

Osgood Vogler Celestica Supply Chain Managed ServicesOur partner Celestica recently published the following article, ‘What If You Could Take The Guesswork Out Of Forecast Planning?’. The author, Osgood Vogler, Director, Analytics, Celestica Supply Chain Managed Services, describes an insight-based demand management process:

So, how do you take the guesswork out of forecast planning? Let’s find out.

Demand planning has a big impact on business performance. Planning error can put revenue at risk by driving component shortages. Persistent planning biases can tie up cash by driving excess inventory. Furthermore, the act of planning and dealing with planning error is time consuming and drives costly overhead. In fact, it is common for supply chain management executives to cite “planning errors” as the greatest obstacle they face to achieving their goals and objectives.

The factors which impact demand management and forecasting are nearly endless. Uncertainty in end markets, shifts in the competitive landscape, constant time-to-market pressure, economic volatility, geopolitical and environmental issues all play a role in component shortages, excess stock and lost revenue. Given this volatility, it is not surprising that organizations are struggling to make effective demand predictions.

To avoid the financial risks associated with planning errors, supply chain leaders and manufacturers should consider building an “insight-based” demand planning process, which brings together analytical tools and data with key human inputs across various functions. This “next generation” demand management approach will allow supply chain operations to evolve and scale with the ever growing volatility and uncertainty of today’s markets.

The insight-based demand management process contains several key principles.

One size does not fit all
One solution is never going to address every challenge an SCM executive will face, so it is important to determine the best approach for your supply chain through segmentation.

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How Anritsu Achieved End-to-End Supply Chain Visibility – SupplyChainBrain & Kinaxis Video Series

MelissaClow
  • by Melissa Clow
  • Published

SupplyChainBrain attended our annual Kinexions user conference, and while there, they completed a number of video interviews with customers, analysts, and Kinaxis executives. And, we’d like to share them!

In this interview, hear Dave Stenfort, director of operations with Anritsu, speak about how the company achieved visibility of inventory and improved control over critical parts in its manufacturing supply chain. Anritsu provides testing and measurement equipment for research and development, manufacturers, and field and maintenance personnel.

Its top supply-chain priority is responsiveness, says Stenfort. Customers expect short delivery times for their precision equipment. To satisfy them, Anritsu is looking at how it can tighten existing relationships with suppliers. “Typically, material is the constraint,” he says.

Watch now: How Anritsu Achieved End-to-End Supply Chain Visibility:

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

JohnWesterveld

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;

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Your supply chain is costing you money – Reason #6 Not effectively managing inventory.

JohnWesterveld

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:

Not effectively managing inventory.

Reason #6 Not effectively managing inventory

I had to throw out some carrots yesterday. I hate throwing food out but there was nothing to be done for it…all I can say is that I’m glad the carrots were in a bag….and it didn’t leak. That got me thinking about why I was throwing away what had been perfectly good food;

  • I had forecasted needing a certain amount, but the customers (my family) didn’t take what I’d forecasted.
  • I thought we would want carrots, but everyone wanted broccoli…which I didn’t have.
  • I lost track of how many carrots we had and ended up buying more when we really didn’t need any.
  • Spoilage can happen. In the case of my carrots, there was a limited shelf life – but they could have been dropped or stolen (hey, it could happen!).

That was carrots. All in all, it cost me a couple of dollars. Unfortunately, all the same kinds of things can happen to your supply chain inventory. Except that your inventory costs millions of dollars.

Those of you that manage inventories know how hard it can be to get the quantities just right. If you maintain too little inventory, you have stockouts, line stoppages and unhappy customers. If you have excess inventory, it ties up working capital and is at risk of damage and obsolescence. The worst possible world is when you have too much of something you don’t need, and too little of something you do need.

So what strategies are out there to maintain inventories at the “right” level? There are many but let’s focus on some of the high runners;

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Your supply chain is costing you money – Reason #2 Poorly executed or non-existent sales and operations planning

JohnWesterveld

sales and operations planning gears

Reason #2: Poorly executed or non-existent sales and operations planning

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 post here:

Tell me if you’ve heard this one before. Your company has implemented an S&OP process. At first it showed some promise, but now it has turned into a blamefest attended if at all by lower level representatives that aren’t empowered to make decisions. No one trusts the numbers, inputs are late and you aren’t seeing any improvements month over month and people are starting to wonder “why bother”. Sound familiar?

So how does a poor S&OP process cost money?

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Elephant in the Room: Thoughts on Metrics That Matter in Semiconductor and Hard Disk Drives

CJWehlage
  • by CJ Wehlage
  • Published

Metrics That Matter in Semiconductor and Hard Disk Drives

Supply Chain Insights recently published a Metrics That Matter report covering both the Semiconductor and Hard Disk Drive (HDD) industries. Despite being hit hard by the recent recession, overall the research shows that these two industries have fared well over the last decade and are positioned to continue that success.

Success, provided they monitor the 7 “elephants” in the room.

Consolidation

Notice in the Supply Chain Insights report, there are only two HDD companies. That industry has already gone through consolidations. Semiconductor is poised to consolidate, which will have huge impact on the metrics. It’s already happening with Avago/LSI, RF Micro/TriQuint, Micron/Elpida, MediaTek/MStar and Fujitsu/Panasonic. Speed to integrate the planning functions during an acquisition is critical.

Profitability

With the OEM’s driving down the price, the semiconductor/HDD companies will have to follow (or innovate new products). Lower price means lower profitability. This will begin to impact the semi/HDD ability to raise capital and innovate/expand. Cost pressures and faster time to market in the planning processes will be required.

Global pressure

Consider that the Chinese and India governments are investing in the semiconductor industry. With China already a source for semiconductor raw materials and the China/India end consumer market growing, there will be pressure to supply chips and hard drives to local China/India OEM’s first. This could create a shortage in the US/Europe OEM chain. Understanding inventory planning will take on a new dynamic.

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