cscmp 2014: visibility powered planning

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In this presentation, Fab Brasca and Tom Kozenski will discuss why there is a need for both downstream and upstream visibility to create a more synergistic and resilient supply chains, and how the visibility-powered planning strategy will impact retail and manufacturing industries. Looking beyond the traditional execution-based view of supply chain visibility, the two global logistics experts will examine scenarios for value realization with a keen focus on enabling upstream proactive decision processes. The key themes included in the session are: • Execution constraint based planning • Intelligent transportation planning • Iterative optimization • Profitable order promising

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  • 1. Visibility Powered Planning Thomas Kozenski, VP Solution Strategy Fabrizio Brasca, VP Solution Strategy

2. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Visibility Powered Planning Dynamic Fulfillment The Visibility Funnel Iterative Planning Constraint Visibility Industry Pressures 3. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Unprecedented Industry Pressure INDUSTRY PRESSURES THE VISIBILITY FUNNEL DYNAMIC FULFILLMENT CONSTRAINT VISIBILITY ITERATIVE PLANNING 4. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL 15 8 INVENTORYTURNS Leaders Average 96% 89% OTIFDELIVERIES Leaders Average 16% 12% EBITDA Leaders Average 70% Companies that run an optimized supply chain achieve higher performance & operational effectiveness Source: PwC Global Supply Chain Survey 2013 Supply Chain as a Strategic Weapon INDUSTRY PRESSURES THE VISIBILITY FUNNEL DYNAMIC FULFILLMENT CONSTRAINT VISIBILITY ITERATIVE PLANNING 5. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Major customers share POS data Major customers share demand forecasts We gather data to understand overall market demand Major customers share inventory Major customers share inventory We gather data to understand overall market supply Major customers share promo plans Major suppliers share order lead time/delivery data Suppliers share advanced shipment notices Systems/partners provide finished good status Leaders have greater total visibility across many dimensions 1 1.2 1.4 1.6 1.8 2 2.2 2.4 2.6 Manufacturers Wholesalers Retailers Retailers and Wholesalers Vertically Integrated as well as superior visibility to both downstream and upstream information Source: Supply Chain Management Review 2013 NumberofVisibilityDimensionsPresent Upstream Downstream Visibility is Vital INDUSTRY PRESSURES THE VISIBILITY FUNNEL DYNAMIC FULFILLMENT CONSTRAINT VISIBILITY ITERATIVE PLANNING 6. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL In Response to Disruptions, Supply Chain Leaders: Are able to quickly change products, processes and organizations Leverage this flexibility to lower inventory, improve customer service and respond quickly 2.5 2.7 2.9 3.1 3.3 3.5 3.7 3.9 4.1 Low Visibility, Low Flexibility Low Visibility, High Flexibility High Visibility, Low Flexibility High Visibility, High Flexibility ProfitabilityIndex Data strongly indicates the combination of visibility and flexibility enables the greatest profitability Source: Supply Chain Management Review 2013 Response with Intelligence INDUSTRY PRESSURES THE VISIBILITY FUNNEL DYNAMIC FULFILLMENT CONSTRAINT VISIBILITY ITERATIVE PLANNING 7. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Networks are Siloed INDUSTRY PRESSURES THE VISIBILITY FUNNEL DYNAMIC FULFILLMENT CONSTRAINT VISIBILITY ITERATIVE PLANNING 8. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL The Visibility Funnel INDUSTRY PRESSURES THE VISIBILITY FUNNEL DYNAMIC FULFILLMENT CONSTRAINT VISIBILITY ITERATIVE PLANNING Retail Distributors Enterprise Direct Consumer Owned Factories ODM/EMS Factories Your Enterprise Suppliers Suppliers Multi-ChannelMulti-ProductMulti-Supply Your CustomersYour Suppliers 9. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Retail Distributors Enterprise Direct Consumer Owned Factories ODM/EMS Factories Your Enterprise Suppliers Suppliers Multi-ChannelMulti-ProductMulti-Supply Your CustomersYour Suppliers The Visibility Funnel INDUSTRY PRESSURES THE VISIBILITY FUNNEL DYNAMIC FULFILLMENT CONSTRAINT VISIBILITY ITERATIVE PLANNING Growing demand variability Lack of internal and external alignment Rising supply chain risks Escalating customer expectations Rapid growth of new products Increasing cost and complexity 10. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Retail Distributors Enterprise Direct Consumer Owned Factories ODM/EMS Factories Your Enterprise Suppliers Suppliers Multi-ChannelMulti-ProductMulti-Supply Your CustomersYour Suppliers The Visibility Funnel INDUSTRY PRESSURES THE VISIBILITY FUNNEL DYNAMIC FULFILLMENT CONSTRAINT VISIBILITY ITERATIVE PLANNING DEMAND AND INVENTORY NETWORK CONSTRAINTS 11. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Multiple Levels of Demand INDUSTRY PRESSURES THE VISIBILITY FUNNEL DYNAMIC FULFILLMENT CONSTRAINT VISIBILITY ITERATIVE PLANNING Harness best statistical level Include intelligence across levels Mid Levels: Trending Some seasonality Higher Levels: Clear seasonality Lowest Level: Rate of sale 12. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL INDUSTRY PRESSURES THE VISIBILITY FUNNEL DYNAMIC FULFILLMENT CONSTRAINT VISIBILITY ITERATIVE PLANNING DC to Store shipments Vendor to DC shipments Time-Phased Projections Consumer Demand Dynamic Fulfillment 13. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Profitable Promising INDUSTRY PRESSURES THE VISIBILITY FUNNEL DYNAMIC FULFILLMENT CONSTRAINT VISIBILITY ITERATIVE PLANNING 13 $25 Identify lanes that can ship any of the items at the requested level of service Evaluate potential profit on each lane Check for item availability on each lane to maximize profit and meet timeliness goals $30 $28 $32 Customer places an order for some home decorating items 14. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Constraint Visibility INDUSTRY PRESSURES THE VISIBILITY FUNNEL DYNAMIC FULFILLMENT CONSTRAINT VISIBILITY ITERATIVE PLANNING Replenishment TransportationWarehouse Time-phased replenishment plans Labor availability Cost impacts Carrier capacity Asset availability Inventory policies Time horizons Item dimensions Dock labor profiles Pallet constraints Trailer pools Dock capacity Carton configuration 15. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Iterative Planning INDUSTRY PRESSURES THE VISIBILITY FUNNEL DYNAMIC FULFILLMENT CONSTRAINT VISIBILITY ITERATIVE PLANNING With Iterative Re-Planning Baseline No Iterative Re-Planning Optimization 1 (New Orders) Time Closer to Execution Cost Savings Potential Optimization 5 (New Orders) Optimization 4 (New Orders) Optimization 3 (New Orders) Optimization 2 (New Orders) 16. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Iterative Planning INDUSTRY PRESSURES THE VISIBILITY FUNNEL DYNAMIC FULFILLMENT CONSTRAINT VISIBILITY ITERATIVE PLANNING Is there a better way? Based upon new business conditions, Open Picked Packed Locked Change Threshold too expensive to change Free to be entirely re-planned Incrementally add stops Incrementally add stops to the end only Backhauls and continuous moves only 17. Copyright 2014 JDA Software Group, Inc. - CONFIDENTIAL Upstream & Downstream Visibility Pays Off Inventory, performance, lead time and financial advancement 18. Visibility Powered Planning Thomas Kozenski, VP Solution Strategy Fabrizio Brasca, VP Solution Strategy