In numerous Supply Chain Matters commentary, I’ve been noting the magnitudes and complexity of change that are impacting industry supply chains today. Global outsourcing and business changes continue to extend the complexity and scope of supply chain business processes. Previous successful efforts in implementing postponement and lean processes, coupled with the forces of a cumulative 18 months of global recession have made many supply chains time constrained in their ability to respond to changes in product demand. Relentless cost pressures have squeezed inventory, safety stock and capacity resources. We have called attention to recent industry articles that are pointing out that spot material shortages are beginning to show-up in a wide range of components within high-tech and other supply chains.
As firms reflect on 2009 events, and begin business planning for 2010, they should come to the conclusion that traditional planning processes are not going to suffice in this “new normal” of post-recovery. The situation has changed so dramatically that in our Supply Chain Matters 2010 Predictions, we include a prediction that states that more responsive, event-driven planning capabilities will become a more important capability in 2010. I believe that supply chain planning in 2010 and beyond will be more event and scenario driven vs. traditional ERP plan driven.
I had the opportunity in December to participate in the latest product briefing of the Kinaxis RapidResponse Enterprise application. What has always impressed me with RapidResponse are its broader capabilities and abilities to be much more than a supply chain planning application.
Overall functionality has come a long way. A one multi-site data model can provide supply chain wide visibility to more than just supply chain planning teams, accommodating plan information to key supplier and other cross-functional teams. Some current RapidResponse implementations accommodate users in the thousands. True event-and scenario driven planning capabilities provide teams with a much more dynamic event-driven planning tool. These have been the design principles of RapidReponse from its genesis within the original Webplan, to fill a void in latent and time-consuming planning cycles, and to be able to emulate and transfer planning analytics across multiple ERP and supply chain planning applications.
One of the most impressive features brought out in a RapidResponse demo is the ability for analyzing various sales and operations planning (S&OP) scenarios. These might include optimistic or pessimistic plans created for what-if analysis, reservation of inventory for key customers, or production or other event-driven responses to a business opportunity. All of these are key resource planning competencies in the “new normal”. The overall speed and response time of the application is also an important differentiation. Kinaxis has documented RapidResponse computational speed of 29 seconds to extract over seven million records across 32 SAP sites, whereas ERP planning runtime would have been in excess of 8 hours.
Another consideration is that RapidResponse has been implemented in many industry settings beyond its original core high tech electronics vertical presence, where extended and complex supply chain are the norm. Kinaxis has now added successful implementations in consumer electronics, pharmaceutical and other industry settings among many impressive customer names. A recent Kinaxis / APICS sponsored webcast featured the recent implementation at global biotech Amgen, where the single most important benefit was described as a 50 percent reduction in overall planning cycles, coupled with inventory cost savings.
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Disclosure: Kinaxis is one of other sponsors of the Supply Chain Matters blog, and as such provides financial consideration for having its product logo and product information linked to this blog.