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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”


“Know Sooner, Act Faster”

“What I hear at every conference : data/systems, structure, goal alignment, external”


LCP ASPC

INVENTORY

OPTIMIZATION

DEMANTRA

S&OP SUPPLIER

COLLABORATION

APO-DM

SCP

D&F

APO-PS


“Plan” – Multi-Tier, X- Functional Visibility

Raw Materials

Internal/External MFG

Inbound/Outbound Logistics

Distribution

Consumer Vertical

Horizontal

Dif

fere

nt

BU

’s

Dem

an

d

Sa

les

Mark

eti

ng

Fin

an

ce

Cap

acit

y

Op

era

tio

ns

Su

pp

ly

Ch

ain

Exec

uti

ves

En

gin

eeri

ng

So

urc

ing

Su

pp

ly

BU

’s

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“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?

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…present day condition…


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

Supply

Demand

Reactive

Product

Supply Demand

Projects

Projects

Reactive Reactive

Projects

Projects

Product

Supply Demand

Product

Supply Demand

Product De

ma

nd

Supply Demand

Product

Va

lue

Sense

Shape for Value

Synchronize

Business

Value

Operating

Efficiency

Integrate

X X

Process

Capabilities


Segmentation

Simulation


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


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


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

Le

vel o

f P

lan

nin

g D

eta

il

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


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


I do what the data

allows me to do


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


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


Forward Looking Greatest Concern….

Plan Buy

Make Deliver

Fundamental Shift

1. Online

Customer

2. Customer

Behaviors


Forward Looking Greatest Concern….

Plan Buy

Make Deliver

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


Traditional Supply Chain Model

Consume is now a Node in the Supply Chain

Plan

Make Deliver

Buy

Consume

Consumers are part

of the real time

supply chain

decisions


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


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


LCP ASPC

INVENTORY

OPTIMIZATION

DEMANTRA

S&OP SUPPLIER

COLLABORATION

APO-DM

SCP

D&F

APO-PS

• Limited to Functional Excellence

• Decision Latency

• Incomplete Global Representation


… ENABLED BY A SINGLE CODE BASE CLOUD OFFERING …

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)



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)


Consequence

Evaluation &

Alerting

Responsibility-

based

Collaboration

What-if

Simulation

Dashboards

On the Go

High Speed

Analytics

Scenario

Comparison


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

know sooner. act faster. - kinaxis rapidresponse · pdf fileknow sooner. act faster. ......

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