Last week, Supply Chain Matters sponsor Kinaxis conducted a themed Big Ideas in Supply Chain Online Conference- Planning for the New Normal, an online delivery conference with thankfully, no program accessibility glitches.
The conference featured a rather interesting agenda that included:
- Remarks and supply chain industry observations from company CEO John Sicard
- Customer keynote featuring life sciences and pharmaceutical drug provider Merck
- A customer panel discussion moderated by Kinaxis Chief Strategy Officer Ann Robinson.
- Two brief technical update sessions focused on the provider’s RapidResponse applications suite.
- A final session featuring noted author, global trends expert and futurist Mark Stevenson.
In his remarks, John Sicard described ongoing conversations with dozens of supply chain leaders, many of whom are describing current COVID-19 impacted business and supply chain environments as simultaneous and continuous macro-level disruptions. He noted that supply chain agility and resilience are new imperatives in eliminating misalignments, maximizing intelligence and empowering multiple teams.
A further phrase that is being communicated more often by Kinaxis: “Speed to connect requires speed to detect.”
Merck Customer Presentation
From this Editor’s lens, one of the most insightful presentations was delivered by Brain Thornley who oversees Merck’s digital supply chain strategy including organizational development and enterprise segmentation. Previously, Thornley was Associate Vice President, Supply Chain Operations EMEA & AP, that included planning and strategy for Merck MSD.
Like many other pharmaceutical companies, COVID-19 presented significant disruptions in raw material API and production supply, stockpiling and bullwhip effect of demand. Simultaneously, Simultaneously, Merck has development underway for coronavirus vaccine candidates, which require their own sourcing and production ramp-up planning needs.
Thornley described a state five years ago of silo-driven planning, mostly spreadsheet-driven with zero end-to-end visibility. Since Merck’s investment in Kinaxis RapidResponse, a new integrated planning capability has evolved, with a noted 98 percent of Merck’s business and supply chain data integrated into the application.
What was even more interesting what was described as an ongoing business and supply chain segmentation focused initiative that differentiates sales volatility and customer service levels with working capital inventory, operating cost and product margin needs across product demand and supply networks. These are elements that could likely be defined as integrated business, inventory and service level-based planning. The end goal for Merck supply chain management teams are a virtual supply chain control tower, with SAP technology providing end-to-end visibility of financials, and RapidResponse for end-to-end planning and operations management.
Regarding lessons learned, Thornley stated that a business process digital foundational layer is critical, that challenging traditional boundaries and changes in mindset behaviors toward more cognitive based tools is essential. That particularly applies to segmented supply chain planning.
Various invited customer panelists shared their ongoing experiences with COVID-19’s impact on their businesses.
Gus Shahin, Chief Information Officer for global contract manufacturing services provider Flex, described how supply chain teams scattered across the globe were forced to go virtual overnight. The initial country-wide shutdown of China based manufacturing, then followed by subsequent other country-specific shutdowns and ramp-ups had to be managed by various supply chain planning teams. Shahin indicated that planning was key, including the sharing of various what-if scenarios with key customers. Constant cancellations and/or order pushouts were managed with the help of RapidResponse. Further stated was that: “productivity went through the roof when everyone was virtual.”
Brent Wilson, Senior Vice President, Global Quality Assurance and Supply Chain Operations at ON Semiconductor similarly described the impacts of the first wave of disruption being on the Supply side with the initial production shutdowns across China. Subsequently, the disruption moved to the product demand wave as order cancellations were received. He noted that ON Semiconductor constantly practices business continuity for business disruptive events, yet less-structed tasks brought about by the pandemic have been challenging. For instance, vulnerabilities and actual disruptions that occurred across global logistics and transportation networks never seen before. Supply chain planners also had to practice what was termed “demand-based dispatching” at factory level, essentially determining if outstanding customer orders were still active, and then releasing such order for production.
Kristen LeBaron, Director of Supply Chain, Lippert Components, a manufacturer supporting recreational vehicle manufacturers explained how COVID-19 fundamentally changed business practices. The RV industry was volatile to begin with, and the virus disruption spurred the need to recalculate detailed component supply plans. Noted was that the disruption fundamentally changed communication and collaboration in needs for contingency planning, validating exiting sales orders, or adjusting or cutting back on supply plans.
Josee Loudiadis, Vice-President Product Management at Kinaxis anchored a product vision and overview session that reviewed the current and future technical and functional aspects of the Kinaxis RapidResponse suite to include an increased use of concurrent Digital Twin and Supply Chain Control Tower functionality to support broader planning visibility, what-if scenario and modeling capabilities. Also shared was Kinaxis’ strategy for leveraging machine-learning and AI capabilities in hands-off forecasting factoring internal or external data elements. Loudiadis stressed the Kinaxis approach that focuses on what she described as “explainable AI” the ability to explain planning results vs. a black box, and that regardless of the data, the system creates its own schema automatically, determining which data is the most predictive.
Regarding the above, is the context of Kinaxis’s recent acquisition of Rubikloud Technologies, a disruptive, emerging provider of AI solutions that automate supply chain prescriptive analytics and decision-making in the retail and consumer packaged goods (CPG) industries. The acquisition being just announced is yet to close but will likely add additional leveraging and use of such technologies in more complex and high SKU planning environments.
Futurist author, broadcaster and global trends and innovation commentator Mark Stephenson shared his perspectives on the future, on supply chains and on change, in his unique style. We will let his messages resonate with conference listeners.
However, here are some quotes were jotted down which are worth pondering:
“When the tide goes out, you get to see who has their underwear on.”
“In times of crisis, two organizations remain; survivors and those that did not”
“If you want to change the world, make sure you are having more fun”
Finally: “Supply chains are the most connective tissue that binds economies and businesses together in the modern world.”
Editor’s note: We will take bold license to loosely translate this to ‘Supply Chain Do Matter’.
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Disclosure: Kinaxis is a Named sponsor of this Supply Chain Matters blog as well as a client of the Ferrari Consulting and Research Group.