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Kinaxis: A new paradigm for supply chain management
 

Kinaxis: A new paradigm for supply chain management

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By CJ Wehlage, VP at Kinaxis

By CJ Wehlage, VP at Kinaxis

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    Kinaxis: A new paradigm for supply chain management Kinaxis: A new paradigm for supply chain management Presentation Transcript

    • Know Sooner. Act Faster. A NEW PARADIGM FOR SUPPLY CHAIN MANAGEMENT
    • 2 Copyright © 2012 Kinaxis Inc. All Rights Reserved. “Know what you know, and Know what you don’t know, and surround yourself with people who know what you don’t know”
    • 3 Copyright © 2012 Kinaxis Inc. All Rights Reserved. “Know Sooner, Act Faster” “What I hear at every conference : data/systems, structure, goal alignment, external”
    • 4 Copyright © 2012 Kinaxis Inc. All Rights Reserved. LCP ASPC INVENTORY OPTIMIZATION DEMANTRA S&OPSUPPLIER COLLABORATION APO-DM SCP D&F APO-PS
    • 5 Copyright © 2012 Kinaxis Inc. All Rights Reserved. “Plan” – Multi-Tier, X- Functional Visibility Raw Materials Internal/External MFG Inbound/Outbound Logistics Distribution ConsumerVertical Horizontal Different BU’s Demand Sales Marketing Finance Capacity Operations Supply Chain Executives Engineering Sourcing Supply BU’s
    • 6 Copyright © 2012 Kinaxis Inc. All Rights Reserved. “Monitor” – Plan vs. Actual  Demand/Supply Balance  Component Shortages  Component Lead Times  Customer Commits  Sourcing Strategies  KPIs  BOMs Beginning of the QTR Yesterday Today Future Projections What’s Different, Do I Care?
    • 7 Copyright © 2012 Kinaxis Inc. All Rights Reserved. …present day condition…
    • 8 Copyright © 2012 Kinaxis Inc. All Rights Reserved. End to End Product Supply Performance Improvement Process-based Stages of Maturity (Industry Av PS – 2.4 >) 8 Stage 1 Stage 2 Stage 3 Stage 4 Stage 4+ React “Integrated Functional Excellence “ “Demand - driven End to End Processes” “Value Translation Network” “Historic Accidental” “Grouped for Focus” “Balanced Mix” “Value Discovery ” “Value innovation” Product SupplyDemand Reactive Product SupplyDemand Projects Projects Reactive Reactive Projects Projects Product SupplyDemand Product SupplyDemand Product Demand SupplyDemand Product Value Sense Shape for Value Synchronize Business Value Operating Efficiency Integrate X X Process Capabilities
    • 9 Copyright © 2012 Kinaxis Inc. All Rights Reserved. Segmentation Simulation
    • 10 Copyright © 2012 Kinaxis Inc. All Rights Reserved. Traditional S&OP • Plan on a monthly cycle, at best • Sequential process • Plan only outside the time fence • Limited / No inclusion of NPI process • Bogged down by spreadsheets Ability to detect issues within the time fence and propose feasible alternatives is not in “scope” of S&OP
    • 11 Copyright © 2012 Kinaxis Inc. All Rights Reserved. Demand Planning  Develop marketplace assumptions  Create industry, market share and inventory plans  Evaluate forecast for accuracy / bias Day 1-4 Demand “What do we want to make?” Day 5-7 Supply “What can we make?” Supply Planning  Evaluate forecast against existing production plans and constraints  Create executable production plan  Generate shipment plan Day 8-10 Pre S&OP “What will we plan to make?” S&OP Meetings  Evaluate capacity and production gaps  Evaluate commercial plans and forecast  Decide on commercial direction and constraint resolution Day 11-14 Financial Conciliation “Impact on operating plan?” Day 11-14 Operational Plan Operationalize Plan  Release production & procurement plans  Update MRP systems  Publish to supply base  Address Exceptions Financial  Roll up revised volumes  Provide appropriate revenue and cost figures against forecast  Create updated financial outlook Day 15-17 Executive Review Executive Review  Review industry, sales, market share, shipment and dealer inventory changes by Distribution Services and Product Business Division Iterative collaborative process requires understanding of cross functional impact – At any stage of S&OP process Misconception # 1: S&OP is a sequential cadence of separated sub-processes leading to an executive meeting
    • 12 Copyright © 2012 Kinaxis Inc. All Rights Reserved. Misconception # 2: Create S&OP plan and then forget it for a month Long Term Planning (S&OP, NPI)  4 months – 2+ years  monthly buckets  Includes new product launch plans LevelofPlanningDetail Time Horizon  Plan capacities e.g. assembly lines, tooling, capacity / volume / program allocations to regions (support CAPEX decisions for equipment with lead-times). Sourcing decisions based on enterprise cost model  manage capacities (e.g. over time, additional shifts/shift models) and operational alternatives (production adjustment between plants, allocation of material shortages, supplier allocations)  provide course correction based on shop floor / supply chain actual execution data (production adjustment as per material issues) Order Planning  4 months  weekly / daily buckets Scheduling / Sequencing  0 - 3 weeks  hourly / slot based buckets week 1 2 4 month 2 4 18 24 Monitor & Response Window Planning Window Traditional Decision Flow The decision flow is bi-directional. One must be able to react when the S&OP guidance is violated due to unplanned events
    • 13 Copyright © 2012 Kinaxis Inc. All Rights Reserved. Misconception 3: S&OP doesn’t require technology – It is all about the process Source: Dr. Larry Lapide, MIT Center for Transportation & Logistics Relative importance of technology Most companies stuck at stage 1 or 2
    • 14 Copyright © 2012 Kinaxis Inc. All Rights Reserved. I do what the data allows me to do
    • 15 Copyright © 2012 Kinaxis Inc. All Rights Reserved. Weekly S&OP, Consumer Electronics • Started with Shared Goal • Each BU by Geography was to be #1 or #2 in market share • Weekly S&OP cadence : • Market share report in : White goods #2, Mobile #1, TV #3, SemiCon #2 • Discussion : what can the others do to get TV from #3 to #2 • Scenarios – NPI dates, Marketing spend, Sales targets, Financial balancing, Supply chain policies, etc.. • Challenges : • End to End view to assure accuracy • Profitability analytics • Projecting market share
    • 16 Copyright © 2012 Kinaxis Inc. All Rights Reserved. How It Works • Each scenario appears as a separate instance of the entire dataset • You perform "what-if" analysis by creating scenarios and modifying the data in them to simulate a change • Compare Simulations against key metrics • Changes made in one scenario do not impact the data of record, nor any other scenarios • Scenarios can be private, or shared with teams RapidResponse’s “what-if" analysis technology lets you model your entire data environment in seconds, regardless of its size. Scenarios – Simulate Anything, Anytime
    • 17 Copyright © 2012 Kinaxis Inc. All Rights Reserved. Forward Looking Greatest Concern…. Plan Buy MakeDeliver Fundamental Shift 1. Online Customer 2. Customer Behaviors
    • 18 Copyright © 2012 Kinaxis Inc. All Rights Reserved. Forward Looking Greatest Concern…. Plan Buy MakeDeliver Fundamental Shift 1. Online Customer 2. Customer Behaviors Different Inventory models New/Unique Spend Mgmt policies Transparent Price models Entitled Fulfillment needs Influence patterns are different Assurance from the Group New Purchase decision process Availability & Entitlement needs Much deeper Segmentations
    • 19 Copyright © 2012 Kinaxis Inc. All Rights Reserved. Traditional Supply Chain Model Consume is now a Node in the Supply Chain Plan MakeDeliver Buy Consume Consumers are part of the real time supply chain decisions
    • 20 Copyright © 2012 Kinaxis Inc. All Rights Reserved. The Value proposition of this fundamental shift 20 Current Issues • Current supply chains operate under the traditional Plan, Buy, Make, Deliver model, managing consumers with Forecasting & Demand Planning solutions. Yet, individual Consumers today have significant leverage on supply chains. • Much deeper segmentation is required to understand and manage “Consume”, as too much cash is being spent on non profitable customers • “Consume” nodes are not only driven by different patterns, they are Adverse to Brand claims. • Today’s Supply Chain KPI’s are not only need to be adjusted, some are driving negative results to the “Consume” nodes. Desired Outcomes • Ability to put structure in consumer data • Establish supply chain models to respond to segment types, and ability to change models rapidly • Capability to respond to online transparency • A model to calculate which segments create the most value • Ability to shift Cost to Serve from lower segments to higher profitable segments • Financial plans for segments – expect more (revenue, cost, market share) from these segments. • Higher level of dialog with key segments • Collect, understand, and influence the purchase patterns – especially online • Get ahead of the ‘groups’ to provide assurances • Have entitlements – digital products ? • Measurement on time phased profitability, customer loyalty, influence weighting, spend ratio’s • KPI’s driving the various customer segments
    • 21 Copyright © 2012 Kinaxis Inc. All Rights Reserved. Kinaxis Campus Headquartered in Ottawa Global company, global customers 1000+ man-years of IP developed on RapidResponse ONE PRODUCT… Single product with single code base powers the underlying capabilities essential to balancing supply and demand across the enterprise …for MANY BUSINESS PROCESSES S&OP Capacity Planning Supply Planning Demand Planning Enterprise Project Management Supplier Collaboration Capable to Promise NPI Inventory Planning MPS Kinaxis Company Overview SCM SaaS vendor, Private ~30% YOY Growth No Debt, Forward looking view into protected backlog
    • 22 Copyright © 2012 Kinaxis Inc. All Rights Reserved. LCP ASPC INVENTORY OPTIMIZATION DEMANTRA S&OPSUPPLIER COLLABORATION APO-DM SCP D&F APO-PS • Limited to Functional Excellence • Decision Latency • Incomplete Global Representation
    • 23 Copyright © 2012 Kinaxis Inc. All Rights Reserved. A NEW PARADIGM: Global Control Tower for Operations Customers (CRM) Outsourced Manufacturers (ERP) Channel Partners (various) Enterprise History (EDW) Brand Owner (ERP) Suppliers (EDI, portal)
    • 24 Copyright © 2012 Kinaxis Inc. All Rights Reserved. A NEW PARADIGM: Global Control Tower for Operations • End-to-End Process Enablement • Global Visibility and Alignment • Fast and Accurate Decisions Customers (CRM) Outsourced Manufacturers (ERP) Channel Partners (various) Enterprise History (EDW) Brand Owner (ERP) Suppliers (EDI, portal)
    • 25 Copyright © 2012 Kinaxis Inc. All Rights Reserved.
    • 26 Copyright © 2012 Kinaxis Inc. All Rights Reserved. Consequence Evaluation & Alerting Responsibility- based Collaboration What-if Simulation Dashboards On the Go High Speed Analytics Scenario Comparison
    • 27 Copyright © 2012 Kinaxis Inc. All Rights Reserved. Our Customers See Results 83% Reduction in Expedite Orders 4 Shortage Systems Eliminated 82% Reduction of Big Order Commit 34% Increased Inventory Productivity 98% On-Time Delivery 43% S&OP Cycle Time Reduction
    • Know Sooner. Act Faster. A NEW PARADIGM FOR SUPPLY CHAIN MANAGEMENT