Posts Tagged ‘Manufacturing’

High-tech supply chain success story: Supply chain visibility is at the core

Published August 2nd, 2013 by Melissa Clow 0 Comments

Today, we want to feature several case studies from our high-tech customers. We know that high-tech/electronics manufacturers are faced with a need to innovate to satisfy ever changing customer requirements while reducing costs, largely through the outsourcing of manufacturing.  And delivering to customer expectations while coordinating the extended supply chain in an environment of constant change, is challenging.

We want to share how these high-tech/electronics industry have turned to Kinaxis to help them face these challenges head on and are seeing breakthroughs in operations performance as a result.

High-Tech customer testimonials

“With RapidResponse, we have visibility across the supply chain, including across contract manufacturers.” Read more

Finished Goods Inventory was reduced by 20% within 3 months of deploying RapidResponse.” Read more

“RapidResponse provides one integrated plan of record.” Read more

“RapidResponse helps the master scheduler improve scheduling…” Read more

Check out the case studies of two high-tech supply shains 

improving our inventory turns

TriQuint Semiconductor supply chain

If you would like to check out other case studies similar to this one, visit our TechValidate page and you will find 28 cases studies, which you may browse by industry.

More about our supply chain survey

As you may have read in our first blog of the series, we completed a customer survey project with TechValidate and are very pleased with the over 150 survey responses and the many stories we can share. And so, for our Friday posts, we have been featuring the customer results on how they are using RapidResponse in their supply chain and the benefits they are realizing.

Take a look at past topics we have explored in this series:

Voice of the customer part 1: Supply Chain Flexibility

Voice of the customer part 2: Supply Chain Visibility

Voice of the customer part 3: Supply Chain Planning

Voice of the customer part 4: What-if Analysis

Voice of the customer Part 5: Response Management

Voice of the customer part 6: Alternative Technologies

Voice of the customer part 7: Competitive Advantage

Supply chain success story: Pharmaceutical customer significantly improves inventory management

Automotive supply chain success story: customer greatly improves on time delivery performance

If you are eager to check out all the results, simply go to our TechValidate page. If you wish to use or share any of the content we’ve published to-date, click on the asset you wish to use and then select the download button to save. You can also choose the share button to distribute through various social media channels.

Happy Friday!

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Posted in Demand management, Inventory management, Sales and operations planning (S&OP), Supply chain collaboration, Supply chain management


New Supply Chain Insights Report: Three Techniques to Improve Organization Alignment

Published July 30th, 2013 by Lori Smith 1 Comment

lora cecere's supply chain insights organizational alignmentWe wanted to share a recent report by Supply Chain Insights LLC entitled, “Three Techniques to Improve Organization Alignment“. This complimentary paper explores how supply chain practices can improve organizational alignment and corporate performance courtesy of Lora Cecere of Supply Chain Insights LLC.

Paper Highlights

When teams are aligned, insight to action is quicker, and greater results ensue. However, organizational alignment is easier said than done. Functions have matured in silos.

The goal of this report is to help companies change and improve alignment to build end-to-end value chains. This study found that when companies do three things, and focus on doing them well, they can substantially improve organizational alignment. Find out what those three things are…

DOWNLOAD NOW

If you like the work that Supply Chain Insights does, make sure to check out their upcoming Global Summit — a  focused event with deep content and extensive networking— taking place in September at The Phoenician in Scottsdale, AZ. As one of the conference sponsors, we hope to see you there!

And feel free to check out other third-party research reports offered in the Kinaxis resource center.

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Posted in Demand management, Sales and operations planning (S&OP), Supply chain collaboration, Supply chain management


Visibility, Agility, and Alignment – 3 capabilities powering the modern supply chain

Published April 3rd, 2013 by Trevor Miles @milesahead 0 Comments

Over the last 20 years there has been a huge shift in Operations toward outsourcing, lead primarily by High-Tech/Electronics. This, coupled with rapid globalization not only into emerging markets, but into other developed economies too, has led to very extended and dispersed supply chains, often with competing objectives and region-specific product portfolios. While this is a well discussed topic, the diagrams below bring home the extent of the outsourcing and globalization through foreign direct investment. In 2009, the amount of foreign direct investment exceeded the inward investment by $1.2T, which is the equivalent of 7.5 Apples, 26 Ciscos, or 68 Bristol-Myers Squibbs. In other words there was a huge amount of globalization taking place worldwide. The extent of the outsourcing can be seen in the Developing Economies’ values, where the net inward investment was $2.2T in 2009 alone.

Alignment

US Federal Reserve, Offshoring Bias in U.S. Manufacturing: Implications for Productivity and Value Added, Susan N. Houseman, Christopher J. Kurz, Paul Lengermann, Benjamin R. Mandel, Sept 2012 (page 71)

 

US Congress, “Outsourcing and Insourcing Jobs in the US Economy: Evidence Based upon Foreign Investment Data”, May 10, 2012 (page 9)

One of the major consequences of both outsourcing/off-shoring and globalization is a loss of visibility to global operations, and therefore a loss of control and confidence. Many companies are desperate to regain control through visibility and alignment across functions and across trading partners. While getting back to the level of control companies had over vertically integrated companies operating locally is never going to return, at least with visibility, agility, and alignment, companies can know sooner about potential risks and opportunities, and act faster to reduce the risk or capture as much of the opportunity as possible.

Alignment is key to achieving this level of operational maturity. So I am happy that Supply Chain Insights LLC is conducting a survey on Supply Chain Alignment. This survey hopes to find out how organizations align functions (sales, marketing, finance, information technology, source, make and deliver) to realize their supply chain strategy. They are also looking to learn, ‘How well do they work together to drive opportunity?’ and ‘which pieces of the organization are better aligned?’ Of course this applies equally to vertically integrated or highly outsourced supply chains.  The issue remains the same: How to best coordinate demand satisfaction in a profitable manner across the globe.

The objective of this survey is to understand how different groups within manufacturing companies view their supply chain agility, team alignment and performance against functional goals. The bonus is that if you participate, Supply Chain Insights will give you an hour and share the results freely, while of course keeping you data confidential.

You can participate in this study by clicking on this link.

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Posted in Control tower, Demand management, Inventory management, Milesahead, On-demand (SaaS), Response Management, Sales and operations planning (S&OP), Supply chain collaboration, Supply chain management


How Do Organizations Align Functions? A Supply Chain Alignment Questionnaire

Published March 27th, 2013 by Melissa Clow 0 Comments

FunctionsHave you ever wondered, ‘How do organizations align functions? We have! So, we wanted to share the opportunity to participate in a survey, which is being conducted by Supply Chain Insights LLC examining Supply Chain Alignment.

This survey hopes to find out how organizations align functions (sales, marketing, finance, information technology, source, make and deliver) to actualize the supply chain strategy. They are also looking to learn, ‘How well do they work together to drive opportunity?’ and ‘which pieces of the organization are better aligned?’

And, if you decide to participate, they keep your answers confidential. But, Supply Chain Insights will give you an hour and share the data freely. Join this study to find the results!

Objective:

The objective of this survey is to understand how different groups within manufacturing companies view their supply chain agility, team alignment and performance against functional goals.

The scope of the survey:

  • This survey is targeted at manufacturing companies.
  • Your trust is important to us: all responses will be kept anonymous and only reported in aggregate.
  • If you take the survey, we will share the results with you, helping you to benchmark your company against your peers.
  • Supply Chain Insights is offering all participants a personalized, one-hour phone call to review the results with you.

Interested in participating? Take the survey!

Feel free to invite your colleagues to take this study too.

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Posted in Demand management, Inventory management, Response Management, Sales and operations planning (S&OP), Supply chain collaboration, Supply chain management, Supply chain risk management


SupplyChainBrain Video Series Part 6 Power of One – Collaborative Planning and Execution across the End-to-End Supply Chain

Published March 2nd, 2013 by Melissa Clow 0 Comments

In October, SupplyChainBrain attended our annual Kinexions user conference. At our event they completed a number of video interviews with some customers, analysts, and Kinaxis executives. These videos are loaded with great information and we would like to share it with our readers.

Each week for the coming weeks, we will be highlighting a clip from SupplyChainBrain. Next up, a discussion with Procter & Gamble (now retired), Supply Chain Insights; NCR Corp. and Kinaxis.

Power of One: Collaborative Planning and Execution across the End-to-End Supply Chain

Breaking down functional silos to create transparent and responsive end-to-end supply chains has long been an intractable problem, but many companies are finding success using a Control Tower concept that gets everyone working off the same plan and focused on the same outcome. Discussing this approach, and the Kinaxis solutions that pioneered it, are: Paul Bittinger, former supply chain transformation manager, Procter & Gamble (now retired); Lora Cecere, founder and CEO, Supply Chain Insights; Don Gaspari, director, global materials and inventory, NCR Corp.; and Kirk Munroe, vice president of marketing, Kinaxis.
[Run Time (Min.): 18:21]

 

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Posted in Control tower, Demand management, Inventory management, On-demand (SaaS), Response Management, Sales and operations planning (S&OP), Supply chain collaboration, Supply chain comedy, Supply chain management, Supply chain risk management


Upcoming S&OP Webcast Series: Why Bricks Matter – The Race for Supply Chain 2020

Published February 22nd, 2013 by Melissa Clow 0 Comments

On Thursday, February 28, 2013 at 1:30PM EST – 2:45PM EST, we will be hosting a webcast with Lora Cecere, Founder, Supply Chain Insights, entitled, “Why Bricks Matter – The Race for Supply Chain 2020″.

webcast

Event Details:Currently, companies are facing a supply chain plateau. Growth has slowed, inventories are rising, and operating margins are degrading. How do companies reverse these trends? They need to move from inside-out to outside-in and work horizontally across functions. The focus needs to be on the creation of value networks.

Join us to hear Lora Cecere and Kirk Munroe, VP Marketing, Kinaxis, discuss the principles of being market-driven and how it will differentiate companies in the race for Supply Chain 2020. Where she will address the following topics:

  • What is a market-driven value network and why does it matter?
  • How do we redefine supply chain excellence to move forward and make progress on this supply chain plateau?
  • How can technology help?

If you’re interested in listening in, register here. We hope to see you on the webcast!

 

Posted in Demand management, Sales and operations planning (S&OP), Supply chain collaboration, Supply chain risk management


SupplyChainBrain Video Series Part 2: Improving Inventory Control at TriQuint Semiconductor

Published February 8th, 2013 by Melissa Clow 0 Comments

In October, SupplyChainBrain attended our annual Kinexions user conference. At our event they completed a number of video interviews with some customers, analysts, and Kinaxis executives. These videos are loaded with great information and we would like to share it with our readers.

Each week for the coming weeks, we will be highlighting a clip. Next up, TriQuint Semiconductor!

Improving Inventory Control at TriQuint Semiconductor

J.P. Swanson, systems architect at TriQuint Semiconductor, explains how the company uses the RapidResponse solution from Kinaxis to see into its component supply chain and accurately project finished goods inventory, resulting in better customer service and inventory control.
[Run Time (Min.): 9:20]

 

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Posted in Control tower, Inventory management, Miscellanea, Sales and operations planning (S&OP), Supply chain collaboration, Supply chain management, Supply chain risk management


To Outsource or to Insource, That is the Question

Published January 16th, 2013 by Trevor Miles @milesahead 3 Comments

A couple of weeks ago I came across a really interesting article titled “How Leaders Succeed in an Era of Volatility” in IndustryWeek by Mark Pearson of Accenture. Mark discusses how some US manufacturing companies have recovered more quickly than others by investing in talent and capacity. The interesting point he makes is that the companies that have recovered most quickly are those that invested in new capacity in areas with existing talent pools. Mark contrasts this with companies that have either increased or consolidated their capacity in areas of revenue growth.  Mark states that

When they relocated, leaders and non-leaders alike were motivated by the reduction of operating costs (100% versus 87%).
In opening new operations, leaders reported doing so not so much to reduce costs (47% to 61%), but to take advantage of unique skills in the new location (42% versus 10%). Non-leaders were more likely to say they opened a new facility to increase customer responsiveness (21% versus 39%).

Given the rapid increase in fuel costs this is somewhat counter intuitive. But, while lacking specifics, Mark concludes that

In an era of persistent volatility, the recovery leaders rose to the challenges. They focused on their business and investment objectives, made wise decisions in their physical networks and better maintained the appropriate resource/talent mix in their enterprises. As a result, today they find themselves aligned with a new business environment in a way that is allowing them to sprint more confidently into the future.

Reading this article sent me on a search of the web for articles that would support Mark’s point of view. There were many, including Deloitte’s 2012 Global Outsourcing and Insourcing Survey, which concludes that 

  • Current and future outsourcing: The outsourcing market continues to confuse outsourcing with offshoring. Many respondents still see the two processes as inseparable – even though many times outsourced work never leaves the originating country.
  • Contract performance and relationship management: Vendor management organizations, while highly competent at day-to-day activities, find themselves underutilized when it comes to driving strategic value.
  • Most recent outsourcing experience: Respondents list “underestimating scope by the vendor” as the largest contributor to deal dissatisfaction, and respondents use vendor communications and escalations most often to remedy deal dissatisfaction.
  • Cloud sourcing: Though often discussed and promoted, there continues to be a substantial amount of uncertainty about cloud-based outsourcing and its future adoption.

There is a lot I could comment on in the Deloitte conclusions, but the one I want to focus on is the manner in which we use outsourcing and offshoring interchangeably, especially given that we are also seeing the same confusion between insourcing and onshoring. This confusion can be seen in an article in The Atlantic titled “The Insourcing Boom” of which the first paragraph is

After years of offshore production, General Electric is moving much of its far-flung appliance-manufacturing operations back home. It is not alone. An exploration of the startling, sustainable, just-getting-started return of industry to the United States.

Notice the confusion.  I don’t know why The Atlantic didn’t refer to the phenomenon as onshoring, but they are not alone. Heck, even President Obama is confusing the terms using the term insourcing in his State of the Union address in 2012. Given the degree to which outsourcing has been coupled with offshoring this confusion is understandable.  But the President he can be forgiven for the confusion because from his perspective onshoring – bringing jobs back to the US – is synonymous with insourcing, but not for companies. True insourcing is, for example, GM’s intent to insource 90% of IT jobs. But even here the lines are blurred despite the fact that the author’s point is that “GM’s plan to grow its own payroll instead of handing the work to subcontractors.” Of course many of the jobs outsourced to their subcontractors were then offshored by the subcontractors.  That’s how they made their money.

While I applaud every manufacturing job that is repatriated, whether in the US or elsewhere in the West, I find the discussion rather quixotic, which Dictionary.com defines as “extravagantly chivalrous or romantic; visionary, impractical, or impracticable.” Given that I have been in Barcelona the past week I couldn’t resist the reference to that ultimate example of a foolish quest by Don Quixote, who, according to Wikipedia, “…, dreams up a romantic ideal world which he believes to be real, and acts on this idealism, which most famously leads him into imaginary fights with windmills that he regards as giants.”

There is no doubt that some manufacturing and IT jobs will return to the US, and the West in general, because the pendulum swung too far, raising issues of supply chain responsiveness and inflexibility, not to mention the difficulty of managing volatile transportation costs and fluctuating exchange rates.

But I am firmly in the camp of George Stalk of Boston Consulting Group who wrote an article for the Harvard Business Review in June 2011 titled “What the West does not get about China”, in which he includes the diagram below.

 

The key point being that while from a labor perspective the discussion is correctly on offshoring versus onshoring, the real opportunity for the West is to develop products to satisfy the needs of the growing middle class in Asia, particularly China and India.  While only in my wildest personal fantasy can I be equated with George Stalk, this is something I have been writing about for several years. (Recession or Reset?, An Imminent Threat to Western Brands, and The Shifting Sands of World Economies.) As Stalk writes,

The rise of local competitors will happen faster than most multinationals expect. MNCs (multi-national companies) that hope to have strong market share in China in a few years need to establish themselves now.

In June 20111 China already ranked first in consumer spending in five categories and second in another 5 categories. And already there are Asian brands in these categories that are bigger than Western brands and which are largely unknown in the West, Huawei and Haier as key examples.  Interestingly Unilever has found that brands they buy in Asia are doing better than Western brands they try to establish in China.

 

Where this rise in the consumer buying power in Asia coincides with the question of onshoring of manufacturing jobs in the West is when Asian brands take share from Western brands in Asia, but more particularly when they gain market share in the West. And they will. A few of us are old enough to remember the furious backlash to the rise of Japan in the US during the 1990s. I see the same rhetoric being replayed in the 2000s in regard to China for manufacturing and India for IT services.

With the utmost humbleness I submit that by focusing on insourcing/onshoring we are addressing the wrong problem.  It may bring short-term relief, and I applaud Obama for closing loopholes that give incentives to companies to offshore, but let’s focus most of our energies on the product innovation that will capture market share in Asia instead. Let’s stop thinking that designing products in the West and selling them in China is the way to go.  Let’s learn from how the Japanese established design centers in the US, particularly for cars, and now enjoy the greatest market share in luxury brands. Stalk comments that

Western companies need to understand that Chinese consumers have very different needs than consumers in their home markets. Chinese households don’t want cappuccino machines; they want water filters, air filters, and soy milk makers (at the moment, one of the hotter consumer categories in China—and one with no foreign competition). The classic example involves automakers, which had to learn that many Chinese who can afford cars like to employ drivers—so backseat features are very important to them.

These are all thoughts echoed in a recent book (The USD 10 Trillion Prize: Captivating the Newly Affluent in China and India) published by a number of BCG people.  The book is based on a study in which they find that consumers in India and China are expected to spend nearly $10T on goods and services a year by 2020.  To put this into perspective, below are the household final consumption expenditure numbers of the top 11 countries in 2009, in which the combined HFCE for China and India was about $2.5T, or a 290% growth over 11 years, averaging out to 26% annually, or 13.1% CAGR.

 

The authors make two important and related observations or predictions

  • We are at a turning point in history where relative wealth will shift from the West to China and India, but absolute wealth, including in the West, should increase.
  • It is not a zero-sum game. But Western businesses and individuals wishing to gain share need to act now. They must choose to be contenders, and remake their dreams for a new world in which China and India play a much larger role – but where the West can still prosper. That’s the real lesson of The USD 10 Trillion Prize.

I admit that I would hate to be in Detroit in my early 50s with over 30 years of automotive experience and no education beyond high school. So while this is not a zero-sum situation, let us not mortgage the future of our children for the expediency of the present.  Structural changes are required, and these are always painful, especially for the people who bear the brunt of the restructuring.

Posted in Milesahead, Supply chain management