Posts Tagged ‘Sales and operations planning’

Your supply chain is costing you money – Reason #3 Not having end-to-end supply chain visibility

Published September 17th, 2014 by John Westerveld 0 Comments

LA freeway is like complex streets of supply chain

Not having end-to-end supply chain visibility

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:

Imagine this scenario.  You are a supply chain leader. It’s Friday afternoon and your thoughts are turning to the upcoming weekend with your family.  The phone rings – it’s your VP of sales. A prospect that your company has been chasing for years has finally agreed to place an order.  It’s a big one and they need it fast.  Really fast.  Inside cumulative lead-time fast.  The question is can you do it.  Can you commit to this order with confidence that you can deliver?

Traditional ERP offers a couple possible options.  1) Load and pray. Accept the order and hope / pray that everything aligns and you actually can deliver on time… maybe event at a profit. The problem with this approach is that very often, you can’t deliver and you lose a customer and worse your reputation.  2) Fire drill (I knew a company that actually called it that). This is where you e-mail each node in the supply chain with the order requirements, have everyone do a feasibility analysis on accepting the order and then wait for the results. The results, however may take several days / weeks to come in.  By that time the customer and their lucrative order have moved on.

Why are there only these two options with traditional ERP systems? It comes down to the disconnected nature of these systems. Companies that have grown through acquisition typically have multiple ERP systems distributed throughout the enterprise. Even if systems are from the same vendor, they will often be at different versions and are not interconnected.  So a scheduler at one plant has no visibility as to the inventory position, capacity or material supplies at another plant.   The only recourse is to pick up the phone or pound out an email to find out…or guess.

There is a third option, one where you can commit to a customer order with confidence. This new approach enables you to simulate the addition of the new order, see the impact across the entire supply chain, try out different options to resolve any shortages and most importantly know that you can commit to and actually deliver this order…and respond in hours not days or weeks.

This option requires a new tool and a new way of thinking. This approach requires lightning fast simulation and, most importantly, visibility to all the nodes of your supply chain. Let’s look at these one by one;

  • Simulation – To simulate the impact of a major supply chain change like a large order you need to have several things; 1) Analytics that model the results from each of the ERP systems involved in your supply chain.  2) An in-memory data model that bypasses the slow read/write cycles used by disk based systems resulting in lightning fast supply chain calculations and 3) the ability to instantly create scenarios – effectively a copy of the entire database within which you can try out multiple approaches to resolve supply chain issues 4) the ability to share and collaborate with other members of your team.
  • Visibility– Imagine trying to drive a car where you have no visibility to the side, none behind nothing out front except through a little 4” by 5” window.  Yes, you might be able to successfully navigate but the chances of you making a very expensive mistake is pretty high. The sad thing is that this is how many of us navigate the complex streets of supply chain. Traditional ERP often are siloes of information locking off other nodes because they are using different versions or worse, entirely different versions. In our drop in situation, you could have sufficient inventory at a different site but never know it because you can’t see it. But visibility goes beyond the raw data.  Many traditional ERP systems limit visibility because they are designed to show one part, one order at a time.  You cannot look at aggregated data without running specialized reports or extracting the data and loading it into a BI tool.Visibility also means understanding the impact of your decisions on key corporate metrics. Knowing that when you make a decision, that it make sense not only from the context of your department, but also for the company as a whole.

How do achieve supply chain visibility?  Comment back and let us know.

 

Posted in Demand management, General News, Supply chain management


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

Published September 10th, 2014 by John Westerveld 2 Comments

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?

  • Excess and obsolete inventory. S&OP is all about aligning manufacturing and sales. When you don’t make what you sell and don’t sell what you make you create inventory.  Lots of it.
  • Lost sales.  This is the corollary to the above.  Typically companies with poor planning don’t have too much of everything.  They have too much of things that aren’t needed and too little of things that are.
  • Lost market opportunities.  Companies without an effective S&OP are typically much slower to react to market changes.  This means that their competitors will beat them into new markets and products.

A well-executed sales and operations planning process can transform a company; allowing them to better control inventory and costs while meeting rapidly changing demand pictures.  It does this by gaining alignment across the sales, demand planning, manufacturing and finance organization.  In effect making sure all areas of the company are working towards the same plan and towards the same goal.  5 years ago, I wrote a blog post in which I discussed the 3 pillars of S&OP. They are;

Process:  Trying to run sales and operations planning without a clearly defined process is like driving in a city where no one obeys the rules of the road….you probably won’t get where you are going.   If there were no process driving S&OP, then there is a very good chance that key information would not be presented (or presented poorly), key people would not be in attendance and that critical decisions would not be made.  It is important that the structure, timing and agenda of S&OP is documented, published and adhered to.   If the process needs to change due to changing business requirements, those changes need to be documented and published.

Executive Commitment:  It is very difficult (bordering on impossible) to implement an effective S&OP process without executive commitment.  Why?  First let’s ask what is the purpose of S&OP?  The purpose of S&OP is to align supply and demand and the various departments contributing to that alignment. Departmental alignment can only occur if the top level department executives are involved in the key decisions…because those top executives have the decision making authority.  Sales and Ops is a failure if the representative at the meeting needs to go back to their executive to get a decision.

Effective S&OP Tools: This includes the tools to analyze the data, present information and make decisions.  Effective S&OP tools also include the ability to integrate the data that drives S&OP.  While Excel can be fine to do the initial S&OP model, moving to the next level of S&OP effectiveness requires a more integrated, responsive and collaborative application.

S&OP is a powerful tool if performed well. Inventory reductions, improved efficiency, improved customer service and reduced expedites are all expected benefits.  However, If there is no buy in, if executive commitment isn’t there, if data isn’t reliable and doesn’t drive action your S&OP process won’t delivery these results.

Have you experienced poor S&OP planning processes?  How about excellent planning?  Comment back and share!

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


On the road! 4 September supply chain conferences we love

Published September 9th, 2014 by Melissa Clow 0 Comments

September is a busy time of year for us at Kinaxis – Many folks here are flying the skies to attend various conferences. Here’s the supply chain conferences we love and will be attending. Hope to see you in the coming weeks!

Gartner EMEA1. Gartner Supply Chain Executive Conference
September 10-11
London, UK

Kinaxis is pleased to be a Premier Sponsor and participate in panel discussion of the 2014 EMEA Gartner Supply Chain Executive Conference.

Panel Details:
“The Technological Advances that Will Catapult Supply Chains into the Next Decade”
Wednesday September 10th at 9:45 AM – 10:15 AM in Room Westminster B&C

Immediately following the keynote speaker, Trevor Miles, Vice President of Thought Leadership at Kinaxis, along with other technology vendors, will take part in the following panel topic: Technology advancements have been at the heart of supply chain transformations during the past decade. Throughout the next decade, a whole new set of technologies will underpin supply chain success stories. A series of thought-provoking questions focused on the future of supply chain technologies will be put to the panel.

Learn More
Schedule Meeting
 
Supply Chain Insights Conference Image
2. Supply Chain Insights Global Summit
September 10-11
Scottsdale, AZ

Kinaxis is pleased to sponsor and participate in panel discussion the Supply Chain Insights Global Summit.

This exclusive event is designed for the line-of-business leader (Supply Chain Leaders, Chief Financial Officers and Corporate Social Responsibility Leaders) driving supply chain excellence and building value networks.

Panel Details:
“Top 15 Supply Chains to Admire”
Wednesday, September 10th at 10:30 AM – 11:15 AM in Room Westminster B&C
The Phoenician, Scottsdale, AZ

The “Top 15 Supply Chains to Admire” is the culmination of a two-year effort to evaluate supply chain performance and improvement for the years of 2006-2013 by industry by vertical for publicly-held companies. To make the list, companies out-performed their peer group on operating margin, inventory turns and Return on Invested Capital while driving significant improvement in financial metrics over the period.Supply Chain Improvement is based on a detailed analysis calculated factors for balance, strength and resiliency. This methodology, termed the Supply Chain Index, was developed in partnership with the Operations Research team at Arizona State University. As part of the panel, four ex-AMR analysts –Roddy Martin, Mickey North Rizza, Lora Cecere and CJ Wehlage– will share insights on the results and the trends.

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LogiPharma US
3. LogiPharma
September 16-18
Princeton, NJ

Kinaxis is pleased to be a sponsor and participate in panel discussion of North America’s #1 End to End Supply Chain Conference for Pharmaceutical and BioPharmaceutical Companies.

Supply Chain Visibility Panel Details:
“Getting Information from a Variety of Systems into One Location to Extract Information”
Thursday September 18th at 9:55 AM

Join Trevor Miles, Vice President, Thought Leadership at Kinaxis, along with supply chain executives, as they discuss ways to gather data from a variety of systems into one location for the purposes of gaining actionable information and insight to make decisions in real time.

Learn More
Schedule Meeting
Automotive Logistics Global Conference
4. Automotive Logistics Global Conference
September 16-18
Detroit, Michigan

Kinaxis is pleased to be a Silver Sponsor of the 15th Annual Automotive Logistics Global Conference.

The Automotive Logistics Global Conference is the place where the intelligence, contacts and expertise come together to address industry challenges.  Join Kinaxis and the most senior executives from OEMs, Tier suppliers and LSPs to network, learn and do business.

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Happy Tuesday all!

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


At Last…My First Four Weeks At Kinaxis

Published September 5th, 2014 by Jennifer Bell 0 Comments
At Last!

At Last! (Photo credit: Wikipedia)

It’s the end of my first four weeks as a Kinaxian (aka Kinaxis employee), and you can queue the nightclub lullaby sung so warmly by Etta James.

This romance started back in 2011 when I was researching planning solutions as a Systems Analyst at First Solar, Inc.  I stumbled across the Kinaxis website and watched a marketing video that showed the creation of a scenario…love at first sight. Luckily for me, First Solar hired Shellie Molina, who had leveraged the software at previous organizations. A few months later, we were attending Kinexions and she was signing on the dotted line.

From the beginning, I looked at implementing RapidResponse as the opportunity of my career.  But, I’m not sure I realized exactly how big of an opportunity it was. The next two years were so fun! We implemented demand/supply balancing, full integration to 4 source systems, a custom production planning solution and integrated project management. It was a whirlwind. The thing that I loved the most about my job was how much I was able to say ‘yes’ to my customers. The platform was so flexible that I could do almost anything.  I was limited only by my imagination.

As I worked with so many Kinaxis employees throughout the implementation, I was repeatedly impressed at the knowledge, experience and spirited approach of the group. The more interaction that I had, the more intrigued I became. So, when I discovered there was an opening on the Solution Demonstration team, I was very excited to travel to Ottawa, meet the team and interview for the role.

I am excited to be a Kinaxian.  As a member of the Solution Demonstration team, I will be focused on positioning RapidResponse as the best solution for new potential customers. I will have an opportunity to expand on my knowledge of supply chain across different industries.

Over the last 4 weeks, I have not been disappointed. Kinaxis is brimming with helpful people who are experts on the product and, also, in supply chain best practices. I’m most looking forward to picking their brains at every chance presented.

So, queue the music, at last…

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


Remembering: Compromise. Confessions of a Supply Chain Dropout by Laura Dionne, TriQuint at Kinexions

Published August 21st, 2014 by Melissa Clow 0 Comments

Compromise. Confessions of a Supply Chain Dropout by Laura Dionne TriQuint at Kinexions

Like I’ve mentioned in my last couple of Thursday blogs, we are starting to gear up for this year’s Kinexions (our annual training & user conference). A few weeks ago I began to reminisce about our fun customer videos from past conferences and I decided to create a blog series to share. So, on this ‘Throw Back Thursday’, I would like to share this video of Laura Dionne, director worldwide operations planning, presenting “Compromise. Confessions of a Supply Chain Dropout”.

In this video hear Laura Dionne, JP Swanson and Guenter Schmidt speak about their experience with RapidResponse – it’s not only educational, but fun too. Please check it out!

Laura Dionne has over 30 years of semiconductor experience spanning manufacturing, supply chain, IT and operations. Her career has spanned supply network activities from the days of 13 column pads to Lotus 1-2-3, to MRP & APO and now into Her professional passion is focused around business intelligence and decision support, rapid analysis of multi-dimensional problems (profit, revenue, cost, capital) as well as the marriage of business process, IT solutions and employee development for solving business challenges.

If you don’t see the video below, view “Compromise. Confessions of a Supply Chain Dropout” here.

Posted in General News, Supply chain comedy, 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


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


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