making the case for collaborative analytics in … · 2018-09-10 · prescriptive supply chain...

CONTENT CREATIONPEERLESS

COLLABORATIVE ANALYTICS IN SUPPLY CHAINS

MAKING THE CASE FOR

2 • LeanDNA: Collaborative Analytics in Supply Chains • leandna.com

THE MODERN-DAY SUPPLY CHAIN is an intricate

animal that relies on many moving parts and pieces

to align and create favorable outcomes. For most

organizations, that means getting the right goods to the

right person at the right time.

Inventory optimization—that delicate balance of

capital investment, service levels, stock-keeping units

(SKUs), and the forces of demand-and-supply—

contributes to a favorable outcome by helping

companies keep pace with customer

demands, manage their suppliers,

stay ahead of shortages, maintain

optimal inventory levels, and drive

continuous improvements.

These are all big tasks in today’s

omni-channel world, where

increasingly-demanding customers

require deliveries in an Amazon-like

fashion—both on the B2C and B2B

sides of the equation. Meeting and

exceeding customer expectations in

a consistent manner requires solid

knowledge of everything from setting

the optimal minimum/maximum reorder points; key

“trigger” points; the correct order quantities; and optimal

order intervals (i.e., 30 or 60 days).

Getting all of these pieces in place requires moving

beyond spreadsheets and manual processes. Using the

same tools that have been around for decades doesn’t

work anymore, never mind that the information is usually

static and out of date by the time it’s ready for use. And

to complicate the situation further, the cross-functional

teams required to optimize inventory

are unable to work together

effectively to implement the required

changes, lagging behind in who is

taking which action, and agreeing

on how to achieve goals.

“Over the last 25 years, I’ve seen

hundreds of different processes

used by manufacturers to maintain

and analyze their data, but most

are labor intensive and involve

complicated spreadsheet systems,”

says Richard Lebovitz, LeanDNA’s

CEO. “Using a collaborative

Optimizing Inventory while Improving On-time Delivery with Collaborative Analytics

Just how many ERP screens, spreadsheets and emails between colleagues does it take to make good supply chain decisions? For most companies, the answer is “a lot.” Here’s how collaborative analytics bring people and data together to turn that tide.

“Using a collaborative analytics platform,

companies bring their data and people together

to solve challenging inventory optimization

problems and can now make impactful decisions faster and more confidently.”

— Richard Lebovitz, LeanDNA’s CEO

MAKING THE CASECOLLABORATIVE ANALYTICS IN SUPPLY CHAIN

• LeanDNA: It’s More Than Graphs and Charts • leandna.com 3


most impactful inventory

actions to take is

basically impossible,”

Lebovitz says. “Using

our decision support

tool, the same procurement team can connect to its

existing ERP and use the combined intelligence to

provide specific inventory recommendations through

prescriptive supply chain analytics.”

The same intelligence can then be used to

enable multi-site collaboration and, finally, track the

results to make sure the action steps were taken.

This, in turn, can have a significant impact on the

organization’s bottom line. The same approach

used to optimize inventory and enable lower

inventory levels can also be used to drive improved

on-time delivery performance—the Holy Grail for

all manufacturers and distributors operating in the

competitive business environment.

“Collaborative analytics allow the VP of supply

chain who is running 10 or 15 sites to point his

or her finger at the problem, drill right down to a

single part, and understand what actions are being

taken (or that need to be taken), in just a matter of

a few clicks,” Lebovitz explains. “At the same time,

day-to-day users rely on the platform to continually

optimize inventory levels, improve customer service,

and ensure on-time deliveries.”

In this report, we’ll explore the key inventory

optimization challenges facing companies in the

current environment, show how a collaborative

analytics platform can help firms overcome these

hurdles, and hear from one company that has

reduced its global inventory by millions within months

of implementing the LeanDNA solution.

analytics platform, companies bring their data and

people together to solve challenging inventory

optimization problems and can now make

impactful decisions faster and more confidently.”

As you’ll read in this report, the benefits of

inventory optimization enabled by collaborative

analytics don’t end there. In fact, it allows

companies to tackle some of their most pressing

challenges head-on, including:

• The need to reduce working capital

• Getting the right parts at the right time to

improve on-time delivery

• Lack of standard work and best practices for

tactical supply chain management

• Getting stuck in a rut with manual processes

• Inability to be efficient and lean

• Misunderstanding the root cause of

supply chain problems (and what specific

actions need to be taken to improve the outcome)

• The list goes on…

UP AND RUNNING IN ONE WEEK

Leveraging the core principles of Lean, LeanDNA’s

cloud-based predictive and prescriptive analytics

incorporate the physical aspects of Lean (e.g.,

perform root cause analysis, set daily goals, measure

the results) into software that can be up and running

in a week or less. “It drives actions and measures

results,” says Lebovitz. For example, the automotive

supplier that sees its inventory levels and related costs

rising, but that doesn’t understand why, can use the

platform to quickly identify the exact cause of the

problem and determine which specific action will have

the biggest impact on the outcome.

“Procurement teams may see hundreds of ERP

messages a day, but determining the top five or 10

“Collaborative analytics allow the VP of supply chain who is running 10 or 15 sites to point his or her finger at the problem, drill right down to a single part, and understand

what actions are being taken (or that need to be taken), in just a matter of a few clicks.”— Richard Lebovitz, LeanDNA’s CEO



AS THE WORLD’S SUPPLY CHAINS become more

complex and intertwined, effectively leveraging

data, making that data actionable, and then getting it

into the hands of key decision-makers have all become

imperatives for a broad range of companies. Historically,

extracting those advanced analytics from the IT department

and delivering them to actual users was a cumbersome,

time-consuming, expensive process that required an ERP,

multiple spreadsheets, phone calls, emails, and myriad

other tools.

A type of algorithmic decision-making that helps

companies optimize inventory decisions while providing

specific actions that they need to take to improve their

bottom lines, predictive analytics (here’s what will happen)

and prescriptive (here’s what you can do about it with the

goal to changing the outcome) analytics are replacing

the antiquated ways of leveraging analytics. These two

advanced data strategies converge to create a cloud-based

solution that provides all the data and reports supply chain

professionals require to gain visibility into today’s most

complex operations.

The Road from Manual Processes to High-Speed EfficiencyBy replacing antiquated, time-consuming ways of extracting actionable data and working together to solve problems, collaborative analytics help companies empower teams to deliver results.

“As inventory and supply chain systems become more

complex, they actually require more advanced processes

to translate that data and insights to help reduce inventory,

improve performance, and increase efficiency,” says

LeanDNA CEO Richard Lebovitz. “Embedded in our

LeanDNA technology is a prescriptive analytics engine that

is based on 25 years of experience implementing supply

chain and manufacturing best practices.”

DRIVING SUSTAINABLE SUPPLY CHAIN EFFICIENCY

LeanDNA takes the analytics fundamentals and

incorporates collaboration concepts inside the software,

enabling teams to work together to solve inventory

problems, surpassing basic spreadsheets, business

intelligence engines, and ERP databases by incorporating:

• Inventory data maintained and analyzed using supply

chain analytics software with specific features for inventory

optimization.

• Predictive analytics and/or artificial intelligence (AI) to

prioritize the most valuable inventory opportunities

• A high level of cultural accountability for team members



(and the company as a whole). LeanDNA

creates transparency of assigned actions

and results, from individual buyers up to

aggregated site-level views, which drives

accountability across an organization.

• Extract and store data from any ERP

system or other data sources. LeanDNA pulls

information from any ERP system, translating it

and storing it into a common structure based

on manufacturing best practices.

Global companies with many

different ERP systems can view

data across multiple sites with

terms that are consistent and

easy to understand.

• Multiple people, sites, and

disparate ERP systems to pull all

inventory data into one place.

In return, companies can

effectively optimize inventory and

achieve a significant, measurable

increase in annual inventory turns. Other key

benefits include:

• The ability to document, track, visualize,

and understand inventory opportunities

throughout your company.

• A solution designed specifically for

inventory management based on industry

best practices.

• A platform that ties together all of the

important facets of inventory management,

including shortage reduction, supplier

management, and lean principles into a

single tool.

• A focus on standard work and best

practices that gives team members

specific daily tasks to optimize time

spent and value delivered.

• A culture of connectivity across

teams, sites, and ERP systems.

• Automatic root cause analysis to

understand the reason behind the

inventory issue or shortage, and

what specific action to take.

Daniel Taylor, LeanDNA’s Director of

Solutions Engineering, says the “culture of

connectivity” enabled by a cloud-based

prescriptive analytics platform helps

break down age-old silos that exist in

the manufacturing environment. “A lot of

companies are still managing very complex

processes offline,” says Taylor, “and with

siloed information.”

An aerospace manufacturer that utilizes

10,000 different SKUs to make an aircraft

wing over a 2-month span, for instance,

faces challenges every time a supplier

changes a part number or revises how it

makes a certain product. “There are a lot

of manufacturing dynamics that flow down

to the supply chain

group,” says Taylor,

“and that require

some real, tactical

decision-making in

order to optimize

inventory levels.”

The problems

only exacerbate when companies open

new physical sites, add new employees,

and attract new customers. Unfortunately,

ERP data that’s extracted and presented

as Excel spreadsheets just doesn’t cut it

anymore. Instead, the smart companies are

investing in a platform or a “unifying source

of truth” that helps them make good supply

“Our platform ranks those actions and not only empowers buyers, but also rolls right into

the C-suite, where executives can clearly see the impact that their teams are having at each site, and how those sites are performing

(or not). That’s the executives’ dream in a business world where their job is to improve

in as many areas as possible.”— Daniel Taylor, Director of Solutions Engineering, LeanDNA

chain decisions (e.g., it’s time to change

this order policy, place a PO with a different

supplier, or cut a certain order size in half).

“Our platform ranks those actions and

not only empowers buyers, but also rolls

right into the C-suite, where executives can

clearly see the impact that their teams are

having at each site, and how those sites are

performing (or not),” says Taylor. “That’s the

executives’ dream in a business world

where their job is to improve in as

many areas as possible.”

A MAGNIFYING GLASS FOR ERP

Because LeanDNA is prebuilt to

plug-and-play into an existing ERP,

the solution can be used through-

out every level of an organization,

where everyone from the supply

chain manager to the procurement

professional to the general manag-

er at a specific site can fully leverage the

prescriptive analytics it generates. This

data can then be leveraged in a way that

vastly improves and optimizes inventory.

“Our platform is essentially a magnifying

glass for an ERP,” says Taylor, “that auto-

matically generates actions that will have

the most impact on a daily basis.”

LeanDNA is unique in that it drives

value in all levels of the

business. Buyers and

analysts leverage the tool

to make their daily work

easier, and managers use

it to monitor and improve

performance and identify improvement

opportunities. By comparison, many

platforms are driven by executive

decisions, but then struggle to get user

adoption. In other cases, users get

excited about technology, but then that

technology fails to have a measurable

impact on the business.



Using LeanDNA to Shave Millions in Inventory Costs

AS A WORLD LEADER IN AEROSPACE EQUIPMENT and systems for commercial, regional, and

business aircraft, as well as helicopters and space applications, Zodiac Aerospace has a long

history of developing and manufacturing state-of-the-art solutions that improve comfort and facilities on

board aircraft and high-technology systems that increase aircraft performance and flight safety.

Zodiac Aerospace’s procurement department moves from a spreadsheet-based inventory optimization system to a cloud-based platform that helps it prioritize, make good decisions, and improve profitability.

CASE STUDY:

Focused on delivering water and waste systems

for commercial aircraft—including those made

by Boeing and Airbus—Zodiac Aerospace’s Los

Angeles operation ships products to a worldwide

customer base. Up until this year, the procurement

team relied on ad hoc Excel reports comprising

columns, numbers, and dates that buyers used to

make their inventory optimization decisions.

PRIORITIZING INVENTORY

According to Gil Lenhard, VP of procurement, all

of Zodiac Aerospace’s prioritization of inventory

was done on a manual basis. “Trying to figure out

what we should do first was a constant chal-

lenge,” says Lenhard, who learned about LeanD-

NA’s cloud-based prescriptive analytics platform

from his IT department. “Some other business

“With this intelligence at our fingertips, we can figure

out the root causes of problems, try to avoid them, and do an overall better job

of bringing in material to support customer orders.”

— Gil Lenhard, VP of procurement, Zodiac Aerospace



units here were already using LeanD-

NA. I watched a demo and could

see pretty quickly how useful and

powerful the platform was.”

In place for several months,

the prescriptive analytics

platform provides a new level of

visibility over Zodiac Aerospace’s

procurement operations. Lenhard

says he especially likes the

solution’s built-in algorithms,

which allow his team to prioritize

their inventory optimization

activities in the most cost-

effective manner possible. “We

always know what we should

focus on,” he says, “and which

decisions will have the biggest

impact on overall inventory

dollars.”

Because it includes purpose-

built supply chain dashboards and

analytics for Zodiac Aerospace’s

inventory, LeanDNA also gives

Lenhard snapshots of inventory

progression over time—something

he wouldn’t be able to access

using a standard report. “We can

see how we’re trending, which

is really important,” he explains,

“and whether we’re going in the

right or wrong direction.”

LEADING THEM DOWN THE RIGHT PATH

LeanDNA also shows Zodiac

Aerospace’s procurement team

which orders need to be placed

and provides it with a snapshot

into why certain orders need ad-

dressing and/or why they’re past

due. “With this intelligence at our

fingertips,” Lenhard says, “we

can figure out the root causes

of problems, try to avoid them,

and do an overall better job of

bringing in material to support

customer orders.”

Using LeanDNA’s prescriptive

analytics and purpose-built

dashboards, for example, Lenhard

can click on different reports to

view the largest impact-drivers

for a specific performance metric.

This not only tells him where

his team should be focusing its

efforts, but it also allows him to

“cut the data in many different

ways,” and leverage reports that

are easily customized with drag-

and-drop capabilities. “It’s pretty

intuitive,” says Lenhard, whose

team members use the data to

determine which POs need to

be placed first, which ones are

furthest behind and in need of

attention, and which ones need to

be rescheduled.

“If something has changed

and we no longer need a

product,” says Lenhard, “we

can take action quickly and not

wind up sitting on a mountain

of inventory.” Knowing that

those “mountains of inventory”

can quickly add up to major

investments and headaches,

Lenhard says he’s thrilled that

his team now has a modern

inventory optimization tool in its

technology stable.

“In the purchasing world, the

way to avoid problems is to make

sure you place orders on time,”

says Lenhard. “And with inventory,

the key is to be able to quickly

determine which levers to pull that

will have the greatest impact.”

Within three months, the

company has used LeanDNA

to help drive significant

reductions in inventory totaling

several million dollars. Lenhard

acknowledges a good portion of

his of his team’s immediate and

long-term success for inventory

reduction is tied directly to

LeanDNA, and his team

continues to use the tool every

day to find prioritized inventory

reduction opportunities.

“Analytics help us be more

proactive than reactive, respond

faster, and avoid problems

down the road.”

Within three months, Zodiac Aerospace has used LeanDNA to help drive significant reductions

in inventory totaling several million dollars

“If something has changed and we no longer need a product, we can take action quickly and

not wind up sitting on a mountain of inventory.”— Gil Lenhard, VP of procurement, Zodiac Aerospace



Inventory Optimization and On-Time Delivery with Collaborative Analytics

The convergence of data and people inside a cloud-based collaborative analytics platform, built expressly for complex manufacturers, delivers real value to a company’s bottom-line.

FOR THE VP OF SUPPLY CHAIN: Tasked with maintaining a healthy supply chain, the VP of supply chain must be able

to cross-pollinate best practices across the entire organizational ecosystem. He or she also has to recognize problems

and solve them promptly—a mission that isn’t easy to accomplish across an entire group of manufacturing sites.

“When issues occur, it’s extremely difficult for the VP of supply chain to get out to multiple different sites and put his

or her finger on the root cause of the problem,” says Richard Lebovitz, LeanDNA’s

CEO. Key challenges include a lack of consistency in metrics being used, how they

are calculated, and the identification of best practices and rate performance levels

across all sites.

“They see issues with delivery or excess inventory,” says Lebovitz, “but don’t

really know which steps will have the most impact right now.” Using a cloud-based

prescriptive analytics platform, the same professional is suddenly equipped with

relevant intelligence (e.g., the root cause of the problem, the supply/demand profile, etc.) that can be used to make good,

impactful inventory optimization decisions.

These decisions not only solve immediate problems, but they also help to improve the firm’s customer service and

bottom line profits. “The platform knows what all of the common issues are, and it visualizes and displays those issues in

a way that the VP of supply chain can use to take the right actions,” says Lebovitz. “All of that intelligence also gets rolled

up for executives across all of their sites in a way that truly drives clear accountability.”

MAKING THE CASE FOR



FOR THE CFO: Focused on the dollars

and cents of running a streamlined supply

chain, CFOs constantly have their eye on the

cash conversion cycle—or just how quickly

their firms can convert cash on hand into

inventory and accounts payable (through

sales and accounts receivables) and then

back into cash.

The LeanDNA platform makes this

calculation easy by measuring days of

supply/inventory turns and providing

analytics on inventory quantities relative to

demand. A factory that usually maintains

$10 million in inventory, for example, and

then increases that level to $12 million to

accommodate a 100% growth in demand,

has actually improved its inventory turn and

reduced its days of supply. However, if the

same company reduces its inventory to $9

million and then watched its sales drop by

50%, it should send up a red flag.

These indicators are invaluable to the CFO,

who is laser-focused on how such activities

impact the firm’s working capital. “Using the

LeanDNA platform, the CFO can easily assess

these positions and optimize inventory levels

in a way that improves the cash conversation

cycle,” says Lebovitz. The platform also

provides accurate and timely spend analytics

that CFOs are often left to their own devices

to locate and leverage. “They get reports once

a month but can’t really drill down to a root

cause of any specific problem,” says Lebovitz.

“In today’s business world, that’s just not

frequently enough.”

FOR THE CEO: As the highest-ranking

executives in a company, CEOs of

manufacturing organizations face unique

challenges where the supply chain itself

plays a critical role in both meeting demand,

as well as minimizing cash usage. They must

rely on the performance data being provided

and review the top actions from across the

entire company (versus specific sites).

CEOs also need a holistic, end-to-end

view of the supply chain in terms of materials

and movement within the factory. “The CEO

can be faster to react and be aware of pretty

much anything that’s happening in his or her

businesses at any time,” says Daniel Taylor,

LeanDNA’s Director of Solutions Engineering.

“They can also be proactive about fixing

problems and dealing with issues and

reporting on inventory-related issues to their

boards of directors.”

In the past, the same CEO had to ask

someone to create a report for him or

her, wait for that report, and then turn

around and present it via a PowerPoint

presentation or other format. “By the time

those steps are taken, the data is probably

at least a week old,” says Taylor, who adds

that LeanDNA’s quick deployment time of

a week or less also provides a high level

of value for busy CEOs. “We’re fast to

implement; the solution is out-of-the-box

and drives huge levels of value across the

organization,” Taylor says, “thus allowing

CEOs to almost immediately begin driving

bottom-line results.”



Managing the Ever-Expanding, Connected Supply Chain



“It doesn’t make sense to keep working in the past. If you want to be at the forefront of your industry, it’s time to adopt the technology that you need to work through

today’s challenges and prepare for the future.”

THE MANUFACTURING AND DISTRIBUTION ENVIRONMENTS are becoming more complex

every day. Where 20 years ago it was enough for an aerospace manufacturer to build aircraft that flew

efficiently, the same factory is now being asked to accommodate different seat arrangements; a wide variety

of cabin interior options; and myriad different colors, media devices, and other fine details. “The number

of options has proliferated and added a lot of complexity to the supply chain,” says Richard Lebovitz,

LeanDNA’s CEO, “across nearly all manufacturing verticals.”

To accommodate these trends

and their customers’ changing

preferences, manufacturers

are working with larger supplier

bases and outsourcing more

of their activities to their

business partners.

This is creating an

ever-expanding

supply chain that’s

not always easy to

manage or orchestrate

with manual or

spreadsheet-based

systems. “Sub-assemblies

and piece parts are being

outsourced to companies and

factories all over the world,”

says Lebovitz. “Without the

tools to identify and understand

where the problems are—and

then synchronize with internal

customers and business

partners—companies are

— Daniel Taylor, Director of Solutions Engineering, LeanDNA

having a hard time managing

that complexity.”

That complexity isn’t going

to ease up anytime soon, and

in fact is expected to get even

more complicated in the future.

“The manufacturing environment

is speeding up as customers

expect shorter and shorter lead

times,” Daniel Taylor, a LeanDNA

Director of Solutions Engineering,

explains. “Compound this with

the expanding product mix

and supply chain complexity,

companies are finding it very

hard to adapt using just Excel

spreadsheets and manual

inventory optimization

processes.”

And while those manual

processes may have sufficed

20 to 30 years ago, today’s

advanced technologies allow

companies to leverage the cloud

and data analytics in a way that

helps them stand out from their

competitors. “It doesn’t make

sense to keep working in the

past,” says Taylor. “If you want

to be at the forefront of your

industry, it’s time to adopt the

technology that you need to

work through today’s challenges

and prepare for the future.”



To learn more about leanDNA,

[email protected] • leandna.com

making the case for collaborative analytics in … · 2018-09-10 · prescriptive supply chain...

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