Does supply chain’s image need to catch up with the times?

BillDuBois

This guest post comes to us from Argentus Supply Chain Recruiting, a boutique recruitment firm specializing in Supply Chain Management.

supply chainIt’s our perpetual hobby horse here at Argentus that Supply Chain needs to be doing more as a field to attract young people. And the industry has started to pick up the slack. Whether it’s organizations partnering with universities to provide information and educational opportunities, or industry associations holding informative events aimed at the wider public, many Supply Chain leaders are using creative strategies to develop the next generation of talent in the field.

But is there something about Supply Chain’s image that’s holding it back from being seen as the crucial, strategic function with tremendous career potential it is today?

This is an issue that popped up in our discussion of why there aren’t more Women in Supply Chain Leadership roles: it’s the question of Supply Chain’s popular image and whether it’s preventing women and others from viewing it as a lucrative and vibrant career option.

On company websites, magazines, promotional videos, and industry association pages, the Supply Chain industry has always employed imagery of the nuts-and-bolts of how products get to market. We’re all used to images of hard hats, warehouses, trucks, trains, shipping containers, boxes, and palettes as a sort of visual shorthand for Supply Chain as a function. We use plenty of these images here at Argentus in our blog posts, service pages, etc.

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Supply chain pain points in the Aerospace and Defense industry

AlexaCheater

7 barriers to aerospace and defense supply chain success

Aerospace & DefenseAs air travel demand soars, aircraft equipment manufacturers continue to innovate in areas like jet engine fuel efficiency, navigation technology and materials science. These improvements, especially around fuel efficiency, are driving demand for newer aircraft models, and speeding up the replacement of previous generations as a result.

For supply chains in the aerospace and defense industry, keeping pace with original equipment manufacturers (OEMs) who are dramatically increasing production rates for components, systems and services, is a major challenge. As the flying public continues to demand lower airfares, a ripple effect is running through the entire supply chain, from OEMs to tier one suppliers and lower, as everyone struggles with the ongoing challenge of competitive pricing.

The global defense industry is also facing new challenges, including how to grow profitably in the face of a potential market decline and how to cut costs to maintain acceptable financial performance. These organizations are cutting costs to maintain their margins in this declining revenue environment. Successful defense companies have anticipated defense budget cuts, already reducing staff, cutting overhead costs and getting leaner. They’re accelerating process automation instead of hiring more staff, resulting in higher operating earnings per employee.

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Career advice: Keeping your edge as a supply chain professional in the face of change!

Dr. MadhavDurbha

Supply chain professional advancementThere is a standalone vehicle emission check shop that I visit to get my car checked prior to the annual tag renewal. For those who are not familiar with the emission check process, you drive your car into the shop. As you wait in your car, a technician hooks your car up to his computer, measures emissions and prints a certificate. The whole process takes about 5 minutes. Just about 4 or 5 years ago the service had cost $25. The aforementioned shop was one of the very few shops providing the service in the vicinity. However, over the next few years, nearly every auto mechanic shop in the area started offering an emission check service. For them, it was simply a loss leader to get the cars in. Then they took advantage of the opportunity to sell higher margin services they offer. Soon, the prices for the service started dropping. The cost of an emission check went down to $20, then $15, and now stands at $10. It wouldn’t take a genius to figure out where the trend will continue to go!

The moral of the story is simple. When a service gets commoditized, the differentiation disappears, and the price that one is willing to pay drops. It doesn’t have to be a service. It can be a product, or even a professional like you and I. We get commoditized, too! Jack Welch said it – “If the rate of change on the outside exceeds the rate of change on the inside, the end is near”. While he said it in the context of organizations, this could very well be true for individuals, as well.

Let’s talk about the implications of this for supply chain professionals. Supply chain management is quickly evolving to be quite an interdisciplinary field. Just recently, I was talking to a youngster studying industrial engineering with specialization in SCM. The curriculum he is going through is quite well rounded with coursework and internships that included industrial engineering, operations research, big data analytics, systems engineering, and programming. Besides majoring in industrial engineering, he is also getting a minor in computer science.

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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 as outlined in a recent case study published on Kinaxis.com. According to Kennametal, what was required for supply chain success was finding new ways to connect data, process and people.

As Jochen Kraetschmer, Manager of Global S&OP at Kennametal, explains in the case study, 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 Kennametal 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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