Topics• Our view of the Supply Chain• Supply Chain Physics• Manufacturing Intelligence
What is the goal of the Supply Chain•   To have the Right Products•   In the Right Place•   At the Right Time•   In the Ri...
A view of the Supply Chain• That has evolved over the  years• Is the basis for how we look  at things• How it shapes our m...
Customer Service Supply Chain                                                Forecasting                                  ...
 Information Flow                                          Forecasting                              Mfg                  ...
There has been a change…• From the days of the “Beer Game”  – Supply chain simulation game developed at MIT  – The flow of...
Information Flow• In the Beer Game• The information flow  – Was slow  – All parts of the supply chain did not have “visibi...
There has been a change…• To today, where information is  – Due to ERP systems  – Available virtually instantaneously
There has been a change…• To today, where information is  – Due to ERP systems  – Available virtually instantaneously  – H...
Instant Information                Instantaneous Information Conduit                                              & Fulfil...
Today• Information is theoretically• Available   – Everywhere: ERP systems all communicate   – To facilitate decisions   –...
Today• Information is theoretically• Available   – Everywhere: ERP systems all communicate   – To facilitate decisions   –...
Today• Bad data or information is as  instantaneously available  as• Good data or information
Topics• Our view of the Supply Chain• Supply Chain Physics• Manufacturing Intelligence
Part of the Supply Chain  • Is a physical world  • We buy things and have them delivered  • We may transform the things we...
Part of the Supply Chain  • Is a physical world  • We buy things and have them delivered  • We may transform the things we...
Objects moving in Space & Time• That sounds like Physics• Which means there are  limits to what can and  cannot be done in...
The Three Laws of SC Physics1. Law of Interdependency2. Law of Constraints3. Law of Information
The Three Laws of SC Physics 1. Law of Interdependency   –   Inventory, Service, Quality, Costs are       interdependent  ...
The Three Laws of SC Physics 1. Law of Interdependency 2. Law of Constraints   –   How much of any item can be produced in...
The Three Laws of SC Physics 1. Law of Interdependency 2. Law of Constraints 3. Law of Information   –   Information moves...
Supply Chain Whack-a-Mole                                                                •   Quality                      ...
When we Violate the LawsNot Accounting for Realities of    Compromise &    Supply Chain Physics          Cause Trade-offs ...
It is a complex Multi-Criteria ProblemOptimize all i Cost i, Inventory i, Service i, Quality iSubject to: Manufacturing Le...
Why Supply Chain Physics?• Supply Chain Physics is a concept based on  science, engineering, and business• But it is a con...
The Law of Information• Is fundamental to this concept• It is impossible to have the  Right Products in the Right Place at...
Topics• Our view of the Supply Chain• Supply Chain Physics• Manufacturing Intelligence
We have data!• We have an ERP!• We have mountains of data!
We have data!• We have an ERP!• We have mountains of data!• Do you have information?  – In the right format, in the right ...
Let’s consider our ERPs• They drive our businesses• They are socio-technical systems  –   People  –   Technology  –   Busi...
Three Things You can do to a BusinessProcess• Manage/maintain current level of performance• Marginal/incremental improveme...
There is a 4th Thing...                               60  Neglect the process &  watch the performance        50  level gr...
Why are ERP Re-engineered Processes Different?• The transaction processes in an ERP are indeed  PROCESSES• The same four t...
This will happen                          60 The processes are neglected and the        50 performance level will   40 dec...
What Can Happen to Deteriorate ERP Performanceafter Go-Live• Socio-Tech Gap  – The Human Process & the ERP Programmed Proc...
People not being Fully Aligned do not Trust theSystem1. They believe, “This damned thing doesn’t work!”2. They often rever...
What Can Happen to Deteriorate ERP Performanceafter Go-Live• Socio-Tech Gap  – The Human Process & the ERP Programmed Proc...
Management Misconceptions about ERPs• Myth:      It is over at go-live  Truth:     It is just the beginning• Myth:      It...
Manufacturing Intelligence (MI)• Supply Chain must be part of corporate Data  Management Process• If there isn’t, lead the...
MI: Own it and Manage it• Have capable MI system in place• Enabling technology for the process  management/improvement sys...
MI: Own it and Manage it• Have capable MI system in place• Enabling technology for the process  management/improvement sys...
The Alphabet Soup Problem• Do you have too many  improvement initiatives?• 6σ,TPM, JIT, Lean, Change  Management, SPC, Lea...
Improvement Initiatives• Put under or marry it to MI• Pick two  – Lean 6 sigma  – Technology/Process Re-engineering    (co...
Have a running list of projects• Tactical – this never goes away• Strategic – supporting your supply chain strategic  plan...
MI: Should Enable SustainableImprovements
Summary• Showed the critical importance of data and  information in our modern supply chain  – Flow of materials and goods...
Summary• Accountability across functions and continuous  improvement across the enterprise requires a  properly implemente...
Summary – Getting it ALL Right• When we do this, our operations and supply chain  have• Right Data is in the Right Place a...
The Right Data in the Right Place at the Right Time
The Right Data in the Right Place at the Right Time
The Right Data in the Right Place at the Right Time
The Right Data in the Right Place at the Right Time
The Right Data in the Right Place at the Right Time
The Right Data in the Right Place at the Right Time
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The Right Data in the Right Place at the Right Time

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Superior supply chain and enterprise management depends on clean and complete data. This impacts both the customer and vendor sides and directly impacts the overall value chain and ROI. Manufacturing Intelligence (MI) provides critical infrastructure for supply chain and enterprise management.

Mark Gavoor discusses how high performing manufacturers incorporate MI and the elements of sustainable improvement to develop world-class supply chain systems including:
• How to integrate continuous improvement into supply chain and ERP implementations;
• Implementing Supply Chain Physics to meet and beat market needs and improve accountability across all functions in the enterprise;
• Trimming program proliferation and focusing on the essential few for maximum results.


Accountability across functions and continuous improvement across the enterprise depend upon properly implemented MI. On the receiving end supply chain management provides better value, better supplier management and reduced time to solutions. On the supplier side this means reduced overhead, faster time to issue resolution and higher customer satisfaction. By deploying MI, companies realize greater supply chain value and a rapid ROI.

When a company adopts this strategy, operations and supply chain deliver the Right Product in the Right Place at the Right Time in the Right Quantities - which requires first that the Right Data is in the Right Place at the Right Time with Perfect Quality.

Presenter:

Mark Gavoor is the Managing Director of CR-Supply Chain Consulting, http://cr-supplychain.com which helps manufacturers and distributors reduce inventory, improve service, and generate cash by identifying and continually optimizing essential demand and supply variables to drive sustainable superior performance.


Mr. Gavoor is an experienced supply chain and quality management executive and practitioner, and frequent speaker and writer on supply chain and quality management topics. He has been VP Supply Chain, Sanford NA (Rubbermaid); Director of Customer Service and Logistics, Colgate-Palmolive; and Manager, TQM at Rockwell Automotive.


View Recording - http://bit.ly/ND4JUm

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The Right Data in the Right Place at the Right Time

  1. 1. Topics• Our view of the Supply Chain• Supply Chain Physics• Manufacturing Intelligence
  2. 2. What is the goal of the Supply Chain• To have the Right Products• In the Right Place• At the Right Time• In the Right Quantities• With the Right Quality• And to execute all that at the lowest possible costs
  3. 3. A view of the Supply Chain• That has evolved over the years• Is the basis for how we look at things• How it shapes our modern approach to supply chain management
  4. 4. Customer Service Supply Chain Forecasting Mfg. Order Purchasing Planning Places Processing Order Manufacturing Order Taking & Fulfillment Inventory WarehouseSuppliers Allocation Trade Manufacturing Distribution
  5. 5.  Information Flow Forecasting Mfg Order Purchasing Places Planning Processing Order Manufacturing Order Taking & Fulfillment Inventory WarehouseSuppliers Allocation Trade Manufacturing Distribution Material/Product flow 
  6. 6. There has been a change…• From the days of the “Beer Game” – Supply chain simulation game developed at MIT – The flow of information lagged – Causing havoc in the supply chain
  7. 7. Information Flow• In the Beer Game• The information flow – Was slow – All parts of the supply chain did not have “visibility”• Inventory went out of control – Too much product, everywhere – Why? The right information was not in the right place at the right time
  8. 8. There has been a change…• To today, where information is – Due to ERP systems – Available virtually instantaneously
  9. 9. There has been a change…• To today, where information is – Due to ERP systems – Available virtually instantaneously – Hopefully accurate
  10. 10. Instant Information Instantaneous Information Conduit & Fulfillment Order Taking Inventory WarehouseSuppliers Allocation Trade Distribution Manufacturing Material/Product flow 
  11. 11. Today• Information is theoretically• Available – Everywhere: ERP systems all communicate – To facilitate decisions – To provide that “visibility”• Life is Good
  12. 12. Today• Information is theoretically• Available – Everywhere: ERP systems all communicate – To facilitate decisions – To provide that “visibility”• Life is Good when the information is – Clean = Accurate – Up to date – Complete
  13. 13. Today• Bad data or information is as instantaneously available as• Good data or information
  14. 14. Topics• Our view of the Supply Chain• Supply Chain Physics• Manufacturing Intelligence
  15. 15. Part of the Supply Chain • Is a physical world • We buy things and have them delivered • We may transform the things we buy into more valuable things others will want to buy from us • When our products are bought, we have to get them to those that bought them
  16. 16. Part of the Supply Chain • Is a physical world • We buy things and have them delivered • We may transform the things we buy into more valuable things others will want to buy from us • When our products are bought, we have to get them to those that bought them • Real objects, Liquids, Solids, & Gases, are manipulated & moved in Space & Time
  17. 17. Objects moving in Space & Time• That sounds like Physics• Which means there are limits to what can and cannot be done in the physical part of the supply chain• There are laws to be followed
  18. 18. The Three Laws of SC Physics1. Law of Interdependency2. Law of Constraints3. Law of Information
  19. 19. The Three Laws of SC Physics 1. Law of Interdependency – Inventory, Service, Quality, Costs are interdependent – In business improvement, silo-ed functional improvement can only take you so far. All further improvements require cross-functional efforts. 2. Law of Constraints 3. Law of Information
  20. 20. The Three Laws of SC Physics 1. Law of Interdependency 2. Law of Constraints – How much of any item can be produced in a finite amount of time? – How far, fast, & in what quantities can goods be shipped from Point A to Point B? – Yes … very related to the Theory of Constraints 3. Law of Information
  21. 21. The Three Laws of SC Physics 1. Law of Interdependency 2. Law of Constraints 3. Law of Information – Information moves at the speed of light, er… the internet – Independent of accuracy of the information – Data and information influences Lead Times Inventory Customer Service Reaction to Market Demands
  22. 22. Supply Chain Whack-a-Mole • Quality • Cost • Service • Inventory • Optimize all to a point • Then trade-off optimization http://www.mmt-inst.com/End_of_management_whack_a_mole.html • Need structural change to optimize all further
  23. 23. When we Violate the LawsNot Accounting for Realities of Compromise & Supply Chain Physics Cause Trade-offs in Performance • Manufacturing Lead Times • Transit Times • Inventory • Production rates • Service • Production capacities • Quality • Warehouse utilization • Cost • Transportation equipment availability • Demand Volatility
  24. 24. It is a complex Multi-Criteria ProblemOptimize all i Cost i, Inventory i, Service i, Quality iSubject to: Manufacturing Lead Times > MLTij Transit Times > TTijk Production rates < PRij Production capacities < PCij Warehouse utilization < Wik Transportation equipment availability < Eijk Demand Volatility = σi i = SKU number j = Plant or Supplier (how many plants/suppliers?) k = DC number
  25. 25. Why Supply Chain Physics?• Supply Chain Physics is a concept based on science, engineering, and business• But it is a concept… We cannot, yet, articulate and solve the multi- criteria optimization problem• It is language and set of principles to foster – Accountabilities across functions – Improvement across the enterprise
  26. 26. The Law of Information• Is fundamental to this concept• It is impossible to have the Right Products in the Right Place at the Right Time in the Right Quantities• Without having the Right Data in the Right Place at the Right Time with Perfect Quality.
  27. 27. Topics• Our view of the Supply Chain• Supply Chain Physics• Manufacturing Intelligence
  28. 28. We have data!• We have an ERP!• We have mountains of data!
  29. 29. We have data!• We have an ERP!• We have mountains of data!• Do you have information? – In the right format, in the right place, at the right time, with perfect quality – To enable business decisions to have the right Products in the right place at the right time in the right quantities
  30. 30. Let’s consider our ERPs• They drive our businesses• They are socio-technical systems – People – Technology – Business processes – Working in harmony to drive transactions• They are business processes
  31. 31. Three Things You can do to a BusinessProcess• Manage/maintain current level of performance• Marginal/incremental improvement• Dramatic Improvement
  32. 32. There is a 4th Thing... 60 Neglect the process & watch the performance 50 level gradually decay over 40 time 30 20 10 0
  33. 33. Why are ERP Re-engineered Processes Different?• The transaction processes in an ERP are indeed PROCESSES• The same four things can happen to these business processes• The processes were re-engineered, substantially modified, for go-live• Without a well conceived, implemented and managed Continuous Improvement Program…
  34. 34. This will happen 60 The processes are neglected and the 50 performance level will 40 decay over time. 30 20 10 0
  35. 35. What Can Happen to Deteriorate ERP Performanceafter Go-Live• Socio-Tech Gap – The Human Process & the ERP Programmed Process are not aligned – Re-engineering only 60% complete at Go-Live (Gavoor’s Guesstimate)• People not being Fully Aligned do not trust the system
  36. 36. People not being Fully Aligned do not Trust theSystem1. They believe, “This damned thing doesn’t work!”2. They often revert to their old spreadsheets or create spreadsheets that mimic their comfortable legacy world3. They are not motivated to do data management… an overlooked and tedious process in the best of circumstances4. “This damned thing doesn’t work!” becomes a self-fulfilling prophecy.
  37. 37. What Can Happen to Deteriorate ERP Performanceafter Go-Live• Socio-Tech Gap – The Human Process & the ERP Programmed Process are not aligned – Re-engineering only 60% complete at Go-Live• People not Being Fully Aligned do not trust the system• Key Users: The best trained & most adept users – Move on: Promoted, transferred, leave the company – Faster than one would have guessed or hoped or wished
  38. 38. Management Misconceptions about ERPs• Myth: It is over at go-live Truth: It is just the beginning• Myth: It is an IT project Truth: It must be a business led project to succeed• Myth: Data Management is just about data• Truth 1: Data Management is a key maybe strategic business process all on its own• Truth 2: Maintenance is way more complicated and costly than imagined
  39. 39. Manufacturing Intelligence (MI)• Supply Chain must be part of corporate Data Management Process• If there isn’t, lead the charge to create one.• Clean, accurate data is not enough…• The data must become information you can use
  40. 40. MI: Own it and Manage it• Have capable MI system in place• Enabling technology for the process management/improvement systems.• Must include: – Direct access to all data sources – Data aggregation – Analytics – Role specific reporting
  41. 41. MI: Own it and Manage it• Have capable MI system in place• Enabling technology for the process management/improvement systems.• Must include: – Direct access to all data sources – Data aggregation – Analytics – Role specific reporting• MI must have Continuous Improvement embedded in it
  42. 42. The Alphabet Soup Problem• Do you have too many improvement initiatives?• 6σ,TPM, JIT, Lean, Change Management, SPC, Lean 6σ, Kaizen, Kaizen Blitz, Workouts• Add on top of this an ERP implementation or upgrade• People do not know what they are doing, when, or why
  43. 43. Improvement Initiatives• Put under or marry it to MI• Pick two – Lean 6 sigma – Technology/Process Re-engineering (covers all the ERP & IT projects)
  44. 44. Have a running list of projects• Tactical – this never goes away• Strategic – supporting your supply chain strategic plan• Lead MI and drive the projects• Do not burden the organization with too many projects
  45. 45. MI: Should Enable SustainableImprovements
  46. 46. Summary• Showed the critical importance of data and information in our modern supply chain – Flow of materials and goods – Flow of information – Laws of Supply Chain Physics.• The criticality of not just data management but Manufacturing Intelligence – A key business process – Tied to improvement efforts – Tied to ERP effectiveness
  47. 47. Summary• Accountability across functions and continuous improvement across the enterprise requires a properly implemented MI.• Customers will see you as more agile and providing higher levels of service.• You will see reduced overhead, smoother running processes, less firefighting, and higher customer satisfaction.• In total, this delivers greater supply chain value and a faster ROI.
  48. 48. Summary – Getting it ALL Right• When we do this, our operations and supply chain have• Right Data is in the Right Place at the Right Time with Perfect Quality which facilitates having• The Right Products in the Right Place at the Right Time in the Right Quantities

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