Posts tagged as 'Supply chain planning'

Step Four: Stage Five Supply Chain Planning System of Record (SCP SOR)

CarolMcIntosh

Collboration is step four in acheiving a stage five SCP SORCollaborative Management is Step Four to a Stage Five Supply Chain Planning System of Record (SCP SOR)

Supply chain collaboration. What is it and why is it so important?

Today there is a focus on supply chain analytics and the automation of decision making. However, this does not preclude the need for humans and collaboration.

A quote from a Forbes article read ‘humans evolved to survive and collaborate to ensure survival’.

In my first blog I wrote about talent management. The millennial generation thrives on working in a social collaborative manner. In supply chain they need to share plans, assumptions and recommendations with others.

The Cloud

The good news is that working in the cloud makes collaboration that much easier. It is estimated that the market for cloud-based supply chains is growing at a compound annual rate of 19%.

Why Collaborate?

Yesterday the emphasis was on vertical supply chains while today companies require horizontal supply chain excellence. Global companies require data and information to be shared and decisions made across the organization very quickly.

Those of us raised in the traditional supply chain era where functional expertise was the #1 priority may think of collaboration as a very nebulous term. Today it is a necessity for timely communication and decision making from the customer to manufacturer to supplier.

The emerging digital supply chain requires data and analytics AND social media functions.

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Step Three: Stage Five Supply Chain Planning System of Record (SCP SOR)

CarolMcIntosh

Connecting the dots like in the game Simon is step three to stage five SCP SORStep Three – Connecting the Dots

How many of you are familiar with the game Simon? While Simon is really a memory game, what I really want to emphasize is that it is unpredictable. You start by pressing on one color and with every selection you are presented with a random sequence of colors that you must remember and repeat. It is random; not sequential and your decisions have to be made quickly as the game speeds up at every turn. It is just like your supply chain.

So how do you manage an integrated supply chain when you don’t know the sequence of events from day-to-day and any decision you make can impact your next action and also others in the organization?

I like to call this ‘Connecting the Dots’.

I remember starting in supply chain many years ago in procurement, negotiating pricing and managing suppliers. At the beginning, about a month after I had placed a large purchase order I was approached by accounting. It turns out that the supplier didn’t acknowledge the price and invoiced differently than the purchase order. This is one example of many accounting issues that we all know can occur but it taught me very early that everything I do can potentially impact some other part of the business and often you find out much later, often too late.

Have you ever made a bad decision?

How many of you have made quick decisions on meeting forecasts only to find out that you lost a good part of your margin on expedited freight, overtime and premium material costs?

Connecting the dots is very important for a SCP SOR because everything is related to cause and effect – understanding the impact of your decisions before you execute.

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Step Two: Stage Five Supply Chain Planning System of Record (SCP SOR)

CarolMcIntosh

Excellene is step two of a stage five SCP SOR

In my first blog I wrote about the first step to reaching a Stage Five Supply Chain Planning System of Record (SCP SOR) which was securing the right talent.

Step Two is about achieving functional excellence (or is it?).

 

SCP SOR Building Blocks

What is the necessary foundational planning layer required to support demand/supply planning for your industry?

There are specific functional requirements necessary for supply chain planning. The short list includes:

In more detail this can include:

Over the years, you have likely evaluated multiple vendors on their functional capability. However is this enough? Is it really about evaluating and optimizing each individual process?

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Gartner Supply Chain Executive Conference – High Stakes in the Desert

TrevorMiles

A group of smiling kids just like Trevor Miles was all smiles at the Gartner Supply Chain Executive ConferenceI love attending the Gartner Supply Chain Executive Conference. Much has changed in supply chain over the past 25 years, though there are many that date from that time, many of whom I run into at the conference, who would deny this. For me it is like a summer camp I have attended for many years. One of my younger colleagues walked with me through the hallways to a meeting and remarked afterwards that he thought we would be late because of the number of times I stopped to talk to people. What he doesn’t realize is that this is due to familiarity, as much as I wish it were true that his assumption of stardom was correct.

What continued presence at the conference has given me is the long view of how supply chain management, and my focus area, supply chain planning has evolved. When I first started attending the Gartner Supply Chain Executive Conference no one had a degree in supply chain management and vendors were not welcome. Most business people were in fact very unfamiliar with computers and the majority of the vendors had advanced degrees in Operations Research. Nevertheless the core focus was on process, with people (skills) coming second, and technology excluded from the conference. This year there must have been 50 exhibitors at the conference, some of whom were more focused on people and process, the majority of whom were focused on planning.

What I find strange in all of this is that almost always the central theme of the Gartner Supply Executive Chain Conference is about technological changes that will drive process changes and the need for skills development. This was as true this year as it was last year, and the years before. And yet within the community of supply chain practitioners the three horsemen of people, process, and technology are often portrayed as being in conflict. In fact the usual mantra is that you have to get the process right first, recruit/train to fill the roles, and then buy technology to satisfy the process. Hogwash.

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Step One: Stage Five Supply Chain Planning System of Record (SCP SOR)

CarolMcIntosh

Talent is key for supply chain planning system of recordReaching best in class. Stage Five of a five stage supply chain model. You all want to get there. Let’s discuss this from a practitioner’s view point.

Yes, we are talking about the supply chain planning system of record. The market is confused with terms; end-to-end, control tower, IBP, concurrent planning, integrated supply chain and planning systems of record. What really matters is what we are trying to achieve.

It has to start with the people.

Step One: The Right Talent

There has been a lot of discussion on this topic. It can’t be overlooked. In my years of experience in the industry and working with software, people are still the difference makers. The supply chain has changed. Increased volatility, more complex supply chains, more competition, and big data.

Supply chain talent must understand and be able to interpret big data but solving problems still requires people collaborating to evaluate tradeoffs. Today’s unpredictability is less deterministic.

Collaboration is at the Core of the Talent Requirement

Morten Hansen, who wrote the book ‘Collaboration’, refers to T-shaped managers. People who can perform their own individual work very well (the vertical part of the T) and also contribute effectively across the organization (the horizontal part of the T). In the supply chain world I translate that to mean T-shaped people have the ability to collaborate across the vertical silos (order fulfillment, demand planning, supply planning, inventory planning, logistics, S&OP) to ensure that decisions made are directionally correct. Thinking deep and broad.

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Is knowing tomorrow “good enough”?

DominicThomas

supply chain planning means knowing todayMy wife and I just moved into our new home that we spent a good deal of our lifesavings building. We worked with our builder on every detail—windows, floors, paint, lighting—you name it. We met with so many of the tradespeople who invested so much time with us making everything just right—under my wife’s watchful eye I might add. Shortly after we moved in, one key decision that we were left with was which company to use to install and monitor our alarm system. You see, I travel a lot for work and knowing that all is well at home is something that’s pretty important to me.

These days there are so many security companies to pick from, each one trumping the other with the latest and greatest innovation. From controlling access from your mobile device, to motion detecting camera systems, the common thread is “innovation”. When securing your family and the things you cherish most, would you rely on old technology? Would “Hey, if we detect a burglar in your house, we will let you know tomorrow morning after our next batch run” make you feel good about your security company?

Shouldn’t the same go for your supply chain? Companies have invested hundreds of millions of dollars, pounds, euros and yen in supply chain planning systems since the late eighties. For a few, planning may have improved. For most, however, smart users have figured out ways of working around each of their disparate ERP and planning systems to make their businesses work. It is no secret that Microsoft Excel still remains the number one supply chain planning system in the world today.

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Tools for Master Scheduling: Hug Your Master Scheduler Part Two

JohnWesterveld

A master scheduler plans out numerous shipping routes on a mapIn part one of this blog we determined that the Master Scheduler has a challenging job with Master Scheduling, but you may be thinking that ERP system you’ve spent millions on buying and implementing must make the Master Scheduler’s job so simple it’s as easy as pushing a button, right?

Well… not so fast. Traditional ERP systems are notoriously difficult to customize. If you want to perform your MPS process the exact way your ERP vendor has designed their ERP module, you might be OK. But if everyone does their process the exact same way, where is your competitive advantage? The reality is that every company has unique requirements and no one implementation can meet those needs without some customization. And ERP customization is expensive. Very expensive.

Typical ERP systems don’t allow you to simply try something out before committing it to production. The ERP idea of simulation is copying the database to another machine and running it there… several hours later you might be able to do some scenarios. Even if you could try something out, you don’t know the impact of what you’ve tried until you’ve explored that change all the way through your supply chain. If the change you are thinking of making will cause an overload on a constraint that is defined on another ERP instance at a different site, you won’t know there is a problem until you start executing. And then it’s too late.

Your ERP system has the capability to do rough cut capacity planning. That should help, right? Well, yes, rough cut capacity planning is better than nothing and it can give you some hints as to where problems might be. It does this by having you create “representative routings” that boil very complex routing and bill of material information into an approximation of key resource and key material needs. You see where this is going, right? You can have a perfectly achievable plan based on rough cut capacity planning and still not have a plan you can actually execute because you don’t have insight into the detailed realities of your supply chain.

Combine all this with the fact that managing any data in an ERP system is a cumbersome, part-by-part process and there is no wonder that many of the Master Schedulers resort to building complex models in Excel to do their jobs. Except… Excel is not the answer either. As has been commented on previously, while Excel can be effective for one-off analysis, Excel is error prone, non-collaborative and no matter how good you are at modelling, you simply cannot represent the true complexity of supply chain in a spreadsheet.

So, what is the answer?

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On the road again…upcoming events for Kinaxis

LoriSmith
  • by Lori Smith
  • Published

‘Tis the season for events, and Kinaxis folks are raking in the frequent flyer miles as a result!  Here’s where we are at in the coming week. Happening right now, we’re exhibiting at the APICS Best of the Best S&OP Conference in Chicago. If you are there, be sure to stop by table #12 – we’ll be […]

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