Supply chain planning technology provider ToolsGroup conducted its annual TG/20 customer conference this week. Like many businesses across the globe amid the ongoing COVID-19 coronavirus outbreak, the conference had to be converted from a live event to be held in Boston to a completely online format in a matter of a few weeks.
We would state up-front that from an online technology perspective, this conference was executed flawlessly for the over 240 participants, with little technical glitches. That indeed is an achievement since from this author’s perspective, some online sharing platforms have had their challenges.
For readers that may not be familiar, ToolsGroup provides a Cloud-based supply chain planning software suite for companies that must guarantee high service levels despite increasing demand volatility and distribution complexity. Its SO99+ branded software is especially targeted to distribution-centric customer-facing supply chains in multi-industry settings, especially when item-level planning is required. Typically, this involves retail-facing industry settings that would include consumer goods, apparel, equipment, online retail, repair parts, among others.
This supply chain technology industry analyst has been following this provider for the past 20 years and has observed a lot in business and technology transformation.
This year’s conference theme, developed prior to the COVID-19 global outbreak, was deemed: Be Ready for Anything.
What great timing.
In the opening keynote, CEO Joseph Shamir observed that COVID-19 provides supply chains with huge uncertainties and the ultimate of unknowns. There are no past references that can be applied other than the constant: “Meet your target service levels and business goals, no matter what happens.” He then transitioned into the company’s new messaging: “The real world doesn’t always follows the rules.” Whether that equates to sharp drops in the global economy, panic buying on the part of consumers or the implications of COVID-19 outbreak itself, few businesses have observed what has now upon them.
Shamir unveiled this provider’s stated three capabilities for overcoming high uncertainty markets:
Predict More Behaviors: translated to understanding the uniqueness of demand associated with each item-level product, among locations, timeframes and market conditions, including promotions or external events. Shamir terms this as granular planning with the highest levels of control.
Protect Against Surprises: modeled and predicted against prior uncertainties and by leveraging automation of planning tasks to anticipate uncertainty and unplanned events while continuing to plan service levels that customers expect.
Perform More Efficiently: with optimized product inventory, distribution and replenishment cycles from point of supply to point of consumption.
Regarding the ongoing COVID-19 environment, Shamir observed that businesses are now facing a much wider outlook of future uncertainty. The ToolsGroup approach to such an environment is to context the bigger problem and divide into smaller problems through multiple planning scenarios of defined outcomes, likely best, worst or intermediate case simulations contrasted to business metric impacts including target service levels and cost to serve. The conversion of selected scenario then needs to be supported by higher frequencies of planning, added data and collaboration frequency, supported by higher levels of automation focused on operational plan generation.
To plan uncertainties related to COVID-19, Shamir suggested two separate planning teams with different goals- one generating likely scenarios and the other operational demand and supply planning based and assessing the level and frequency of planning data that determine the feasibility of the scenario.
For this provider’s SO99+ product suite, the latter actions involve the use of what is termed as Demand Collaboration Hub. This application is a web-based consensus forecasting platform that brings together demand and forecast data from multiple sources, supporting both internal sources (such as marketing and sales) and external sources (such as partners, retailers, distributors or suppliers).
Customer Session Highlights
A further highlight of this week’s conference was a customer session that featured three of ToolsGroup’s existing customers and specifically their ongoing challenges relative to the ongoing COVID-19 outbreak on either supply chain or sales and operations planning (S&OP).
This was from this analyst’s view, very timely, one that other supply chain management tech providers should consider in the current environment.
The panelists included Mark Chandler, Senior Vice President for American Tire Distributors (ATD), who’s further role is executive sponsor of ATD’s S&OP process.
Most tires purchased among North American tire retailers were described as being supplied from ATD’s globally based supply network.
Chandler provided a first-hand account how the impact of the coronavirus was first sensed on the supply side in January, with disruption of supply from China based factories. By early March, suppliers originating in Vietnam and Sri Lanka became disrupted, and now with the outbreak spreading in Europe and the United States, the retail demand side is being disrupted since retailers have either been forced to close their businesses, restrict hours or deal with unpredictable demand.
Chandler’s first-hand account of the S&OP process reinforced the reality of a normally month-long process now forced to near daily meetings. Multiple planning scenarios are being worked on with information that changes daily. His observation was that most of the impact assessment has occurred over the last eight days with the discovery of on the ground conditions. Noted was that the forecast today is a lot different than two week prior, and the importance of all functional teams to be focused on the same set of scenarios. Collaboration further extends to retailers, suppliers and transportation providers.
Chandler attributed the flexibility of SO99 in the ability of ATD to generate a series of planning scenarios that the S&OP team can focus on and assess with each meeting. The focus at this point is how the retail market will respond post COVID-19, and with that, establish demand guidance into the supply chain planning system at the SKU/store/customer level.
A second panelist was Rafael Labbe, a Supply Chain Manager at Suministros Alimentos, a distributor to McDonalds Mesoamerica, which represents the hamburger chain’s Central America based restaurant outlets. Labbe also addressed the ongoing impacts on the virus to that region’s restaurants.
With need for supply network support for 135 restaurants among four countries, with more than 5000 SKU’s there is a requirement to make upwards of 748,000 inventory decisions per month. Planning is performed via a sales out (POS driven) demand sensing process. Major portions of franchise supply originate from the U.S. which is obviously dealing with its own COVID related challenges.
Regarding the ongoing outbreak, the two main challenges were noted as volume reduction among restaurants due to certain closings as well as forecast uncertainty as to when shelter restrictions will lift among individual countries. Transit times of vehicles is a further challenge because of added border checks and/or travel restrictions within certain countries.
Labbe attributed the flexibility and ease of use of SO99, which was implemented two years ago, as being of great assistance toward ongoing inventory and forecasting assessments for McDonald’s outlets.
Another customer session featured Christine Peters, Lean Material Coach at Ingersoll Rand’s Trane Technologies who spoke to the change and program management aspects of a global-wide rollout of SO99.
Other sessions were dedicated to highlights of the upcoming Release 8.3 of SO99+ which is scheduled for June of this year, some additional new product announcements and in conjunction with the ongoing virus outbreak, some newly announced complimentary services offerings which are detailed in the blow last section.
Bob Bryant, Vice President of Customer Success for ToolsGroup outlined areas of added customer support including a newly announced ToolsGroup Academy, and a subscription-based Premium Care Services offerings for customers who desire supplementary super user resource training and assistance.
COVID-19 Complimentary Offer of Technology
To assist businesses during the ongoing COVID-19 situation, ToolsGroup announced that North American customers and or prospective customers, will be able to obtain a subscription to Demand Collaboration Hub with no subscription fee for up to 6 months. The stipulation is that a one-time fee of $20,000 will be charged for technology set-up and implementation training. According to this provider, this technology can be usually deployed over a 2-3-week timeframe.
A second complimentary offer that was announced involves what was termed as COVID-19 Simulation Assistance, in the form of several hours of complimentary ToolsGroup technical consulting dedicated to assisting customers with their ongoing planning configuration of SO99+. This service reportedly will be made available based on technical resource availability.
From our lens, this was a meaningful online customer event.
What added to knowledge sharing and audience takeaways was the timely discussion shared by customers of their use of this type of technology in the current unprecedented business environment. Three individual interactive real-time online audience polling questions provided a true quantification of what challenges customers are actually dealing with today. An agenda that might have taken multiple days was condensed to a little over three hours yet provided value.
Granted, the personal social interaction of dinners and networking breaks were missing, but these are the times we have right now.
Other providers should consider such agendas for online event planning and knowledge sharing over the coming weeks which is greatly needed in the current COVID-19 environment.
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