Supply Chain Data Model | 10 Data Issues

Structuring the Outsourced Supply Chain Data Model: 10 Critical Data Issues to Consider (a white paper summary) Jane Marshall business consultant jmarshall@kinaxis.com Copyright © Kinaxis 2009. All rights reserved.

The new normal: Complex, outsourced supply chains Yesterday: simple, linear supply chains Today: virtual network of interconnected players responsible for different pieces of the supply chain management operation What’s needed: • manufacturing operations managed by CMs & suppliers, but… • brand owners actively coordinate activities across the virtual enterprise to ensure the desired outcome 2 Copyright © Kinaxis 2009. All rights reserved.

Finding the coordination balance • for a brand owner, achieving supply chain visibility and coordination is no easy feat • it requires adopting technologies that can: • pull diverse sources of supply chain data across multiple systems (internal and external to the organization), • provide high compute capabilities that allow rapid and deep data analysis, • integrate with record-keeping transactional systems to facilitate action, and • enable multiple users to work simultaneously from a single, real- time ’version of truth’ 3 Copyright © Kinaxis 2009. All rights reserved

Spreadsheets are no longer enough Spreadsheets : • cannot manage the volume of data required • have very limited modeling capabilities • make it difficult to effectively and simultaneously collaborate with multiple participants • are time-consuming and cumbersome • are prone to human error and inconsistent processes • typically contain only site-specific data points (no visibility to supplier inter-dependencies and demand - supply flow across the network) 4 Copyright © Kinaxis 2009. All rights reserved

What do brand owners need? Ten critical data issues to consider: Capture core data from partners • Part numbering issues: • numbering schemes will vary across supply chain nodes. Determine common or equivalent part numbers for global planning & netting • Core supply node master data and supply-demand details: • match the local planning behavior/info of the outsourced supplier (incorrect planning at one level can radically skew requirements for downstream suppliers) 5 Copyright © Kinaxis 2009. All rights reserved.

What do brand owners need? Ten critical data issues to consider: Capture core data from partners • Supplier constraints, both capacity and material based: • constraints should be reflected in sourcing rules and should be adjustable by the planner for simulation • In transit quantities, lead times: • obtain clear understanding of in-transit quantities & how it relates to supplier commitments • include transit time between partners in order to model cumulative lead time 6 Copyright © Kinaxis 2009. All rights reserved

What do brand owners need? Ten critical data issues to consider: Model Contractual Terms • Tolerances, demand and supply changes: • simulate different supply plans and evaluate changes outside of agreed tolerances to provide some mitigation against excess inventory liability • Inventory rebalancing expectations: • understand sourcing rules so inventory transfers can be appropriately simulated 7 Copyright © Kinaxis 2009. All rights reserved.

What do brand owners need? Ten critical data issues to consider: Simulate supply alternative strategies • Alternate supply plans: • simulate potential supply alternatives by: • changing rules for end item selection, • changing sourcing rules for suppliers, • transferring existing inventories, or • simulating other changes in planning policies (i.e. lead time) • Supply sourcing - strategic end item selection: • changing the mix of equivalent products can be complex. Selection rules should be made visible in the data (i.e. as part of BOM or represented as part to part transfers), so planners can review & adjust them for simulation of alternatives 8 Copyright © Kinaxis 2009. All rights reserved

What do brand owners need? Ten critical data issues to consider: Simulate supply alternative strategies • Supply sourcing - supplier selection: • identify all potential supplier relationships, not just those currently active • planners should be able to simulate time-phased sourcing rule changes or override supplier information on particular orders • Metrics for supply plan evaluation: • the impact of alternate strategies on KPIs should be able to be ranked and compared across scenarios to obtain a balanced scorecard and an objective way of determining the best course of action 9 Copyright © Kinaxis 2009. All rights reserved

Is it worth it? Yes. • Once the supply chain is effectively modeled, brand owners can: • understand changing demand/supply conditions at all nodes • facilitate processes that have become extremely difficult with outsourcing: • S&OP, • inventory management, • NPI and EOL optimization, • product profit management • facilitate processes introduced with outsourcing: • contract and inventory liability management • ensure all supply chain participants are working towards mutually beneficial goals 10 Copyright © Kinaxis 2009. All rights reserved.

Is it worth it? Yes. • Improving supply chain management (SCM) through enhanced visibility and coordination can lead to numerous business benefits, including: • reduction in inventory, increased inventory turns, and reduced carrying costs • increased factory throughput • lead time reduction • coordinated introduction of new products • more reliable delivery • better forecasts 11 Copyright © Kinaxis 2009. All rights reserved.

Supply Chain Data Model | 10 Data Issues

0 comments

Notes on slide 1

Favorites, Groups & Events