The document discusses how forecast collaboration tools can help align supply and demand in the supply chain. It notes that traditional planning tools have limitations that can exacerbate the "bullwhip effect" of increasing volatility as demand signals move up the supply chain. Effective demand collaboration using new modular applications for forecast visibility, supplier commitments, and automated feedback can reduce inventory levels, improve on-time delivery and cash flow by increasing accuracy and reducing latency in communication. The document provides examples of companies that achieved savings and efficiencies through implementing forecast collaboration solutions.
Organizational Structure Running A Successful Business
Aligning Supply and Demand with Forecasting Collaboration Tools
1. Using Forecast Collaboration Tools to
Align the Supply and Demand Sides of the
Supply Chain
Presented by Simon Ellis, IDC Manufacturing Insights
Dudley Lance, TAKE Solutions
2. Using Forecast Collaboration Tools to Align the
Supply and Demand Sides of the Supply Chain
TAKE Solutions Webinar - October 2012
Simon Ellis, Kimberly Knickle, IDC Manufacturing Insights
16. Using Forecast Collaboration Tools to
Align the Supply and Demand Sides of the
Supply Chain
Dudley Lance, Sales Director
TAKE Solutions
17. The “Bullwhip” Phenomenon
Term is used to describe the pattern in supply chain networks of increasing
inventory swings in response to unanticipated changes in demand.
Problems from “Bullwhip Effect”
Inefficiencies throughout the supply chain
regarding time, cost and quality
Demand uncertainty necessitates excessive inventory (safety stock) used
as a cushion which leads to huge investments and delays.
Carrying extra inventory, especially for extended periods of time, can
quickly eat away at margins.
Distorted information downstream results in:
Missed schedules due to late shipments or long lead times
Lack of timely and accurate supplier commitments
High inventory/scrap/rework due to excess purchases
Fulfillment mistakes and missed shipments
High procurement costs due to manual processes
19. The problem with traditional tools…
Multiple systems of record
Information latency
Lack of “business logic” w/ B2B connectivity tools
No “Closed Loop” collaboration capabilities
21. Effective Demand Collaboration and the financial
impact on your business..
On-Time Delivery
Production Efficiency
Cash Conversion Cycle
Direct Material Costs
Days Inventory Outstanding
23. Modular Applications
Customer Supplier A
Supplier B
Supplier C
Portal
Demand
Collaboration
Quality
Collaboration
Supplier
Management
Inventory Visibility
and Control
Procurement
Collaboration
AP Automation
Drop Ship
Sales Order
Package Tracking
and Shipment
Confirmation
ERP 1
ERP 2
24. Forecast Visibility through sharing of schedules and
longer term plans (pre-PO) typically replacing spreadsheets
and e-mail based manual processes
Supplier commitments and lead-time are provided via a
supplier portal (or b2b connection) with automated feedback
to backend systems, including creation of order releases
Exception-based notification to planners and suppliers
Control the “bullwhip” effect – leads to increased inventory
turns (i.e. reduction of inventory), increased customer service
levels and efficient supply chain processes
Demand Collaboration Overview
25. Supplier Adoption is a Key!
Target critical component suppliers as a starting point
Communicate the benefits to your suppliers to gain adoption
Minimize the barrier of entry for suppliers
26. Challenges
Needed to publish demand and forecast material requirements for
18 months to selected suppliers. Supplier can plan capacity,
commit to BHI and update lead-time.
Solution
OneSCM Forecast Visibility
Demand and forecast requirements are published to Suppliers.
View Forecast by Material (6-weekly / 18-monthly buckets)
View by Period
Summary View of Material with 18-Monthly buckets.
Supplier can plan capacity, update commit quantity and lead time.
Listing of Purchase Orders created from Forecast Data is available in
all views.
Results
Improved On-Time Delivery
Optimized Days Inventory Outstanding
Improved Cash Conversion Cycle
Improved Capacity planning
Update of Lead Time by supplier and approved by buyer to
systematically update SAP
World's third-largest oilfield services
company with operations in over 90
countries. They provide advanced
products and services to help
customers drill, evaluate, complete
and produce oil and gas wells.
2011 Stats
Revenues: $19.8B
Income: $1.7B
Employees: >57,700
Customer Success: Baker Hughes
27. Challenges
Order fulfillment is predicated on short lead times
Final assemblies have an average BOM of more than 2,000
components (75% of BOM parts are directly sourced)
Required improved accuracy of inbound deliveries in key areas
of time, quality and quantity, while reducing inventory levels
and direct spend costs.
Solution
OneSCM PO Collaboration and Demand Collaboration
Over 400 OEM and Contract Manufacturers worldwide
Increased visibility to purchasing data, acknowledgements and
use of rule-based MRP changes to open orders
Shipping controls to collaborate on delivery dates
12-month forecast visibility and collaboration
Results
$22 million in savings with an ROI of nearly 500% and $2.5
million in recurring annualized savings
33% reduction in warehouse space
20-40% reduction in inventory
25-30% reduction in receiving discrepancies
30% reduction in premium freight costs
For more than 40 years, Applied
Materials has provided innovative
equipment, services and software to
enable the manufacture of advanced
semiconductor, flat panel display and
solar photovoltaic products. Applied’s
technologies help make innovations
like smartphones, flat screen TVs and
solar panels more affordable and
accessible to consumers and businesses
around the world.
Customer Success: Applied Materials
28. About TAKE Supply Chain Solutions
Division of TAKE Solutions, Inc.
In business since 1994 ~ 400 customers
>150 Fortune-1000 customers
> 900 employees
CMMI Level 5, PCMM Level 3 & ISO27001
Headquartered in Austin, TX.
Offices in North America, Europe, Middle East and South East Asia
Solutions deployed globally at thousands of locations
serving tens of thousands of users
Technologies that leverage the ERP platform
Oracle Gold Partner, SAP Certified, ERP-agnostic
Saas, On-premise or Hybrid deployment
Solutions focused in:
Supplier collaboration and management
Mobile data collection applications
RF & barcode printing applications
Returns management
Industry Awards
29. Thank you
We’d be happy to answer any questions you have
right now.
Or, please contact
TAKE Solutions: 800-324-5143
dudley.lance@takesolutions.com
donna.fritz@takesolutions.com