Supply Chain Blog – 21st Century Supply
Gartner recently published an update to their Magic Quadrant for Supply Chain Planning System of Record and we re thrilled to be positioned in the Leaders quadrant for the second consecutive time. That makes us two times a leader when you also consider the Magic Quadrant for S&OP Systems of Differentiation.
Gartner defines a supply chain planning (SCP) System of Record (SOR) as a planning platform that enables a company to create, manage, link, align, collaborate and share its planning data across a supply chain from demand plan creation through the supply-side response, and from detailed operational planning through tactical-level planning.1
In this regard, we stand out from other vendors in the space. This is because Kinaxis RapidResponse is a one-to-many offering a single product that can be used to address a broad array of supply chain functions. It is our technical architecture that allows companies to create, manage, link, align, collaborate and share its planning data across a supply chain, and with customers and suppliers. Functions have long been segmented into isolated activities that reflect organizational structures and specific functional goals, and software has been developed and deployed in the very same manner. In contrast to that, RapidResponse is a planning and analysis layer that crosses organizational boundaries, planning levels, and time horizons to improve the way supply chain stakeholders work together to make fast, value-based decisions for the enterprise. With RapidResponse, companies create the foundation for bringing supply chain functions together, and maturing or defining new processes as a result.
A recent article on CFO points to a topic gaining strong momentum in the business press: the supply chain is the next big thing for big data to address. The authors, Regenia Sanders and Jason Meil, detail why this focus has become so compelling:
Big data can have a measurable impact on driving greater accuracy in planning, ensuring that companies make the right amount of the right product. Advanced algorithms and machine learning can facilitate increased forecast accuracy across a company s SKUs, which drives greater turns, less waste, less inventory, and fewer stock-outs, which leads to higher EBITDA, lower working capital, and greater competitiveness.
Companies clearly see the benefits of leveraging big data for supply chain management, yet studies show a surprising hesitance to move forward with initiatives. In Inbound Logistics, a Capgemini Consulting study is cited showing nearly all shippers and third-party logistics providers (3PLs) believe big data is vital to their efforts to improve tactical and strategic operation of their supply chains. Yet only eight percent of shippers and five percent of 3PLs have implemented big data initiatives in their supply chain. The title of a Fortune article Big Data Could Improve Supply Chain Efficiency If Companies Would Let It further underscores the conundrum. A number of challenges must be addressed for big data/supply chain initiatives to move forward, including cost, cultural resistance to change, and in many cases a disconnect between internal IT and supply chain organizations; but one overarching challenge is the nature of supply chains in the current global commercial environment.
That s the question I m asking after one very important, and now very broken, bridge in Northern Ontario failed to stand up to the rigors of a cold Canadian winter earlier this month. The newly built Nipigon River Bridge is a vital part of the Trans-Canada Highway system, the main roadway linking Canada s east and west coasts. And on Sunday, January 10 it was completely shut down, bottlenecking traffic and forcing commercial shippers to detour several hours out of their way and through the United States since there s no other way around. According to news reports parts of the bridge buckled, causing a grinding halt to the passing of the approximately 1,330 commercial vehicles, carrying more than $100 million worth of goods, that cross over it every single day. Thankfully, no one was injured when it happened. While one lane of the bridge has since re-opened, allowing at least a trickle of traffic to flow across, larger transport vehicles are still being detoured, and the cost to the businesses impacted by this logistics nightmare is mounting. One federal politician is calling it a wake-up call adding this is a serious choke point to the Canadian economy. I d add it s yet another reminder to businesses to make sure their supply chains can handle the unexpected.
Would your supply chain be able to respond and recover quickly and efficiently if potentially hundreds of large shipments failed to reach their destinations on time? Is an unanticipated delay like this part of your supply chain risk plan? If not, perhaps it should be.
By way of introduction, I am Joe Cannata, Kinaxis Certification Director. For the past several months, I have had the privilege to work with the broader Knowledge Services team and others across Kinaxis on designing a Certification Program which we are proud to begin rolling out today! This program is an important one because it marks a pivotal point in the company s growth and maturity, and demonstrates the presence and authority of Kinaxis RapidResponse in the market as a leading and long-standing solution. Before I get into the details, let me tell you that while working on this initiative, I came to the realization that developing the certification process is quite analogous to the supply chain. Start with concepts being tested, these are the raw materials. The raw materials are then processed into an exam blueprint, which breaks the concepts into major topics, and specific objectives for each topic. Resources and documentation are collected to use for creating the exam items. This is equivalent to the supplier phase. Using the blueprint like a bill of materials, the exam is manufactured using all of the concepts, translated into specific questions, or items, that complete the blueprint. Extensive QA is performed on each of the exam items before going into production. A final review is made before the exam is deemed ready. The completed, packaged exam is then sent on to a test delivery partner (the distributor) for distribution to our customers, partners and employees (the consumers) worldwide. With some exams being offered at proctored testing centers, those would be the retailers in this analogy. Even everyday products, such as exams, have supply chains, and yes, even some of the same supply chain issues. At KinectED, our annual knowledge sharing event for Kinaxis employees and partners, we officially announced the launch of our new Kinaxis Certification Program. Now customers, employees and partners will be able to validate their RapidResponse knowledge and expertise. And yes, there will be exams!
A strong retailer-supplier connection can provide big benefits for retailers, suppliers, and even the end customer, but how does one go from a perfunctory partnership to a more intimate relationship that allows for things like common goal setting and joint improvement strategies? The answer is simple. Collaboration.
Unfortunately, building and maintaining said collaboration is a heck of a lot more challenging. I recently looked at two surveys examining the retailer-supplier relationship. The first, by SCDigest, gave an overall grade of B- to today s retailer-vendor supply chain relationships. In its inaugural year, the 2016 State of the Retailer-Vendor Supply Chain Relationships survey focused on retailers and consumer goods manufacturers. What the results reveal is a very strong prevalence of an it s not us, it s them mentality coming from both sides of the equation. According to the survey, 98% of retailers rate their relationship with their vendors as average or above, with 96% of vendors feeling the same way. Seems positive, right? Almost. Where there s a bit of a disconnect is how each side views themselves and the other in terms of willingness and success at collaboration. Retailers feel their own knowledge and skill in how to collaborate successfully is a non-issue, ranking it as one of the smallest potential barriers to good collaboration. Vendors however disagree. They rank a lack of knowledge and skill in collaboration among their retail partners as the biggest single hurdle they need to overcome for supply chain collaboration.
Half of organizations playing in the healthcare and life sciences space are feeling the pain of managing overall supply chain costs. At least according to the eighth annual UPS Pain in the Chain Survey. While this survey swings on the logistics end of the supply chain pendulum, there are some good takeaways for those involved in all other areas of supply chain management as well. Compiling results from more than 400 healthcare logistics executives across 16 countries, the results show rapid business growth is the major stumbling block in controlling costs for pharmaceutical supply chains, with 56% of respondents admitting they struggled with it in 2015. Following closely behind are fluctuating fuel costs (55%) and fluctuating raw materials costs (49%). Other pain points included aging IT systems (38%) and lack of visibility (38%). From a supply chain planning perspective, we see the pain of growth, coupled with a lack of visibility and aging IT systems as a significant cost and operations performance hurdle as well for the companies we deal with.
Strategies employed by those who claim success in managing costs include forming logistics and distribution partnerships (57%), leveraging optimization analysis (55%), pursuing vested logistics and distribution partnerships (52%), and making an IT investment (51%). This is another prime example of how people, process and technology can come together to achieve positive results.
On the heels of the United Nations Paris Climate Change Conference, now seemed like an appropriate time to revisit an often talked about supply chain topic. The impact of climate change on your supply chain operations.
Tumultuous weather is perhaps the most commonly thought of supply chain risk related to Earth s climbing temperature. Undoubtedly, the impact of wild weather is substantial. An increase in the number of devastating hurricanes, earthquakes, wildfires, floods and droughts should be worrying to everyone, not just those concerned for their supply chains. In 2014, three of the top five biggest supply chain disruptions were related to natural disasters. Typhoon Halong in Southeast Asia capped the list, causing a 41-week disruption at a cost of more than $10 billion for companies doing business in the region. Are we looking at a future where Mother Nature is responsible for the majority of disruptions? Companies will need to evaluate the risk of losing a supplier in a specified geographic region, and whether there s a case that needs to be made to diversify where raw materials are coming from, having multiple suppliers, and how far to take contingency plans. The same can be true for evaluating different transportation options. Severe weather can cause substantial delays, or even total shutdowns, of certain routes or modes of transportation. Supply chain managers need to have backup routes and options available and at the ready, and need to be able to quickly and effectively run scenario simulations to determine which course of action will allow for the smallest overall impact. Another thought I had is whether these severe weather phenomenon will cause shortages of certain raw materials, like what we re currently seeing with cocoa. What will that do to already unstable price fluctuations in some global commodity markets? Will supply chains be able to cope with the potential added costs? Can we expect to see an increase in civil unrest (and the associated supply chain challenges) as communities fight over dwindling resources? A good supply chain risk plan should take into account all of these factors.
As you enjoy your downtime over the holidays, here are a few of our best blogs from 2015 to check off your reading list. So grab your favorite holiday drink of choice and read on! We look forward to continuing to bring you interesting and engaging content in the New Year!
- Technology and the Supply Chain: What Does the Future Hold?
A recent report, Technological Tipping Points by the World Economic Forum (WEF), takes a look into a crystal ball, examining the timing and impact of 21 tipping points, which they describe as moments when a specific technological shift hits mainstream society. A staggering number of those points are things straight out of the futuristic cartoons and early sci-fi series I loved growing up.
- Preparing Skills for the Future of Supply Chain Management
There is no question that supply chain talent development has become a top of mind multi-industry challenge that takes on different dimensions for both attracting and retaining key talent. The debate is often focused on whether strategies should address a perceived skills gap or a training gap.
- What Your Mom Can Teach You About Effective Supply Chain
Have you ever marveled at how some women just seem to have it all together? They manage to turn a hectic household into a well-oiled machine, while I can barely manage to keep my household of two up and running! In honor of these Super Moms, I ve pulled together the top five reasons why you should be asking your mom for more than just relationship advice.
- Supply Chain Risks: Big or Small, Plan For Them All
The reality is that risk comes in many forms (including anticipated risk, uncontrollable risk and unanticipated risk). It s constantly changing. And the amount of risk being faced by supply chain professionals has been on the rise for the past 20 years.
- ^ Magic Quadrant for S&OP Systems of Differentiation (info.kinaxis.com)
- ^ Read the full story of Kinaxis Once Again Positioned in the Leaders Quadrant of Gartner s Magic Quadrant for Supply Chain Planning System of Record (blog.kinaxis.com)
- ^ CFO (ww2.cfo.com)
- ^ Inbound Logistics (www.inboundlogistics.com)
- ^ Fortune (fortune.com)
- ^ Read the full story of Big Data and the Supply Chain: One Important Means of Moving Forward (blog.kinaxis.com)
- ^ news reports (www.ctvnews.ca)
- ^ has since re-opened (www.thestar.com)
- ^ calling it (www.ctvnews.ca)
- ^ Read the full story of Can One Broken Bridge Cripple Your Supply Chain? (blog.kinaxis.com)
- ^ Read the full story of Let s Talk Certification (blog.kinaxis.com)
- ^ SCDigest (www.scdigest.com)
- ^ 2016 State of the Retailer-Vendor Supply Chain Relationships (www.scdigest.com)
- ^ Read the full story of Us vs. Them: Retailer-Supplier Collaboration (blog.kinaxis.com)
- ^ Read the full story of Cost Management Biggest Supply Chain Pain Point for Pharma (blog.kinaxis.com)
- ^ United Nations Paris Climate Change Conference (unfccc.int)
- ^ often talked about (blog.kinaxis.com)
- ^ three of the top five biggest supply chain disruptions (www.supplymanagement.com)
- ^ how far to take contingency plans (blog.kinaxis.com)
- ^ seeing with cocoa (blog.kinaxis.com)
- ^ Read the full story of The Cost of Climate Change on Your Supply Chain (blog.kinaxis.com)
- ^ Technology and the Supply Chain: What Does the Future Hold? (blog.kinaxis.com)
- ^ Preparing Skills for the Future of Supply Chain Management (blog.kinaxis.com)
- ^ What Your Mom Can Teach You About Effective Supply Chain (blog.kinaxis.com)
- ^ Supply Chain Risks: Big or Small, Plan For Them All (blog.kinaxis.com)
- ^ Read the full story of Best 10 Blogs Posts From 2015 (blog.kinaxis.com)