Why inventory management should be a company-wide conversation

AlexaCheater

inventory management practicesDon’t get caught having your company’s inventory management conversation alone!

Making the most of one of your company’s largest assets means bringing together everyone involved from the manufacturing floor to the corner office, and focusing on more than just what’s in your warehouse.

Re-evaluating your inventory management practices can help you overcome rising supply chain costs, increasing customer demand and the growing complexity of global operations. It can also help raise profits and reduce risk. Successful inventory management all boils down to a delicate balancing act. You need to have enough of a product to satisfy customer demands, but not so much that it risks becoming obsolete or sinks your business with high carrying costs. As David Thomas, Director of Global Capacity Planning at Ford Motor Company says, inventory is “… dead money.”

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Plant-location decisions and potential supply chain risk

MelissaClow

Automotive PlantThis guest post comes to us from Jim Fulcher, Blogger on the Supply Chain Expert Community.

Last week, Toyota and Mazda signed an agreement to enter a business and capital alliance to further strength their partnership. The outcome is expected to either significantly impact an existing automotive supplier network or prompt manufacturers and suppliers to move or begin operations.

Specifically, the companies agreed to establish a joint-venture plant which produces vehicles in the U.S., jointly develop technologies for electric vehicles, jointly develop connected-car technology, collaborate on advanced safety technologies, and expand complementary products. As might be expected, it’s news of the joint-venture plant that is attracting attention, especially since the companies announced the plant would have an estimated annual production capacity of approximately 300,000 units, will require a total investment of approximately 1.6 billion U.S. dollars, and will create up to 4,000 jobs.

At the new plant, Mazda expects to produce cross-over models which Mazda will introduce to the North American market, and Toyota plans to produce the Corolla for the North American market. By producing vehicles in the U.S., Mazda aims to build a production structure to further grow in North America, allowing the company to more quickly respond to its customers’ needs depending on the region and model. By further increasing its production capacity in the U.S., Toyota will be better positioned to respond to the growing North American market.

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How Kennametal developed an integrated supply chain by connecting its data dots

AlexaCheater

Integrated supply chainFaced with growing global complexity and increasing demand volatility, Kennametal set out to improve its supply chain maturity, increase data integration and improve its bottom line. But doing so meant developing an integrated supply chain connecting data, process and people.

Driving the decision to change was the impact of market demands on Kennametal’s revenue. Inventory levels were bloated, customer satisfaction levels were low and a very high SKU count and complex supply base across all continents meant it was a challenge to keep data connected and processes optimized. Complexity overlaid nearly every aspect of the global manufacturer’s operations.

So how could the company overcome it?

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Where are you on your capacity planning journey?

BillDuBois

Tight ropeBalancing capacity can be as challenging as walking a tight rope. It’s a fine line between staying balanced or plunging to your death. Not enough capacity and you lose balance when it comes to delivery and customer satisfaction. Too much capacity and you lose your balance when it comes to costs and margins. All companies are walking this fine line with capacity planning, but some are continuously waving their arms trying to stay upright, while others have secured their footing.

At one end, you have what you might call the “order toss” approach. Let’s throw the orders over the wall and try not to listen to operations scream bloody murder. Planning decisions are made with the best of intentions but for reasons that aren’t always clear, those decisions are made without much consideration for capacity.

At the other end, you have organizations with finely tuned collaborative processes that consider capacity at all levels of the planning horizon. From business planning, sales and operations planning (S&OP) down to detailed material planning, capacity planning is part of the conversation at all levels. Utilization is a key metric for high capital equipment. Capacity and inventory planning work closely together to manage prebuild plans against inventory targets. In overloaded conditions – and let’s face it, regardless of how good your processes are it will happen – demand, supply, inventory and capacity planners are all in sync to balance revenue, margin and delivery targets against utilization, inventory and cost reduction goals.

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Top 5 reasons to attend Kinexions ’17

TeresaChiykowski

“Focus on the journey, not on arriving at a certain destination.”
Chris Hadfield, An Astronaut’s Guide to Life on Earth

Kinexions '17It’s all systems go for Kinexions ’17, which will take place Oct. 9 – 13, 2017, in Florida at the JW Marriott Orlando, Grande Lakes. With a theme of Where are you on your supply chain planning journey?, this year’s Kinexions promises to be bigger and better than ever.

If you don’t know what Kinexions is, let me fill you in.

Kinexions is the premier annual event for our RapidResponse® user community, including our customers and partners. Offering two full days of networking, inspiring keynotes, informative general sessions and a variety of breakouts delivered by customers, product experts and partners, Kinexions ’17 will offer something for everyone – regardless of where they are on their supply chain journey.

Now, for the top 5 reasons to attend Kinexions ’17…

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Life is complicated. Supply chain management shouldn’t be.

AlexaCheater

Complex supply chainRushing kids out the door, walking the dog, navigating traffic—life is complicated enough without having to deal with overly complex supply chain management processes. Unfortunately, increasing consumer demands, growing globalization and mounting pressure to stay profitable in an ever-changing world is the new reality, and for many it means working harder than ever.

Just because supply chains are getting more complex, doesn’t mean the job of managing them has to as well. Isn’t it time you simplified your day-to-day responsibilities, made room for a little more ‘me’ time and moved away from bracing for chaos every single day at work?

Connect data

The first step in re-gaining your work-life balance and getting your sanity back is ditching the plethora of Excel files littering your desktop. To do it, you have to take a deep breath and say goodbye to running your supply chain from Excel. Instead, bring a little peace back into your life by harmonizing all that disparate data from multiple sources and legacy enterprise resource planning (ERP) systems and bringing it together in one solution.

Having access to all supply chain data in a single system means you’ll gain the ability to run what-if scenario simulations faster and more effectively. They’ll be no need to import and verify data from multiple sources, which will cut down on the potential for data errors or integrity issues, and speed up the decision-making process. No more fretting about whether your data’s up-to-date and accurate. Just think of all the time you’ll save not having to do multiple data pulls and merging Excel files. You might actually make it home on time for dinner!

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Chasing perfection is killing your supply chain

AlexaCheater

Forecast accuracyThere’s no such thing as 100% when it comes to forecast accuracy. Let me say it again. One hundred percent accuracy does not exist. I don’t care how good your demand sensing is or how sure your sales team is of their market projections. It’s just not possible. Anyone who says differently is either selling something, or a deity. So why are you spending so much time trying to make the impossible real?

Time and again I’ve heard how important forecast accuracy is when it comes to improving supply chain operations. It always seems to be a priority no matter where on the maturity scale a company falls. But this practice of chasing perfection is killing your supply chain. Not slowly, over time, but rapidly, like a tsunami sweeping your profits out to sea as that one giant wave recedes. Because that’s all it takes to destroy you. One catastrophic unexpected event.

Why forecast accuracy fails

It could be a natural disaster, a drastic shift in the political landscape or even the collapse of your only tier one supplier. The unknown is your biggest supply chain weakness, and the one you’ll never see coming, no matter how great you are at forecasting. Pretending otherwise, that forecast accuracy can save you when the unexpected strikes, is foolhardy at best, a death sentence at worst.

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5 key trends affecting the Consumer Package Goods industry

Dr. MadhavDurbha

CPG supply chainIn my recent conversations with the CPG industry executives, regardless of the company, there are several common themes and trends that bubble up. These trends make the business conditions more challenging, and some may say exciting. I will review some of these in this blog.

1. The assault on brands: The great recession of a few years ago has caused significant shifts in the consumer buying behaviors. Private labels have gotten better with packaging and presentation, in addition to value for money. A recent wall street journal article about Brandless, a company which sells generic CPG with simplified US$3 (three US dollars) pricing for every product on its site is an example of creative business models that are popping up. Competition is using pricing or niche assortments as a means to compete with branded manufacturers. Amidst lessening brand loyalties, CPG brand manufacturers are being forced to become more cost competitive.

2. Increasingly complex and volatile supply chains: There are several trends here that are causing increasing complexity and volatility for CPG supply chains. Here are some:

a) Increased price and promotional actions – Dynamic intraday pricing by the likes of Amazon and increased promotional activity targeted to consumer segments or even to individual consumers are causing more demand volatility, shifting more volume and revenue towards promotional business as compared to turn business. Word of mouth, good or bad, is now spreading much faster in online channels.

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