Last week, this supply chain management technology industry analyst had the opportunity to attend the annual customer conference of supply chain planning and response management technology provider Kinaxis. Readers should note that Kinaxis has been a long-time sponsor of this blog.
In our previously published Supply Chain Matters Part One posting, we provided specific highlights of the first day’s significant product related announcements, along with the market implications. In this Part Two blog, we highlight our observations and takeaways from the various Kinaxis customer keynotes presented on the second day.
Second day customer keynotes were delivered from executives representing global consumer and beauty goods provider Procter & Gamble (P&G) , fast moving mid-sized global bio-pharmaceutical company Ipsen Group, semiconductor fabrication manufacturer Global Foundries, and plasma therapeutics company CSL Behring.
Digital Transformation Journeys
For most of the customer focused talks, the notions of either business or supply chain focused digital transformation involved a combination of business, physical process, people and other dimensions, as well leveraged use of advanced technology. Each stressed top-level management support and the need for continual alignment.
Procter and Gamble
P&G executives shared three primary elements of this manufacturer’s overall transformation.
One was physical work processes related to enabling manufacturing product postponement processes to be located closer to regional product fulfillment centers. For North America, six rather large flow-through product mixing centers were strategically deployed to be within one day’s driving distance to major customer fulfillment locations. In the case of certain online providers, fulfillment was initiated by movement to a different part of the building for customer shipment.
The notions of planning were to transform from individual facility to network focused planning, and from reactive to proactive, end-to-end supply chain planning and response management. Planning job descriptions were described from transitioning from supply chain planner to that of value stream analyst.
Controlling the various moving elements of orders, inventory and physical resources was the implementation of supply chain control towers supported by Kinaxis RapidResponse technology. A highlight of this capability was describing a before state where planners were forced to dedicate upwards a more than half of their day sorting thru prior day’s data to ascertain what exceptions needed to be addressed, to an after state of planners initially logging-in and being provided a visualization based summary of exceptions generated from the prior day. Shared were screenshots of nine essential dashboards that have since been developed which directly relate to quantified impacts to either line-of-business or geographic regional outcomes related to customer service, working capital or operating strategy success factors.
From our lens, one of the more insightful takeaways for the audience was P&G’s supply chain organizational empowerment of what was described as “democratizing all relevant data.” Another empowerment factor was the creation of termed ‘Citizen Developers’ whose skill profile is described as 50 percent supply chain planning and 50 percent IT software technology knowledge. Citizen Developers foster communities of supply chain-wide shared knowledge and are described as instrumental in fostering overall transformation of planning processes.
Presenters were further quick to note that for P&G, transformation is not solely about automation of planning tasks and driving reduced need for planners, but rather addressing non-value-added tasks that free-up planners for broader end-to-end supply chain tactical and strategic decision-support needs. Technology further addresses faster processing and broader visualization of data that can enable more proactive, data-relevant and business context decision making.
At Ipsen Group, transformation implied sustaining double-digit growth rates with a growing portfolio of fast-moving consumer healthcare products as well as oncology and other rare disease treatment medicines. Far reaching change was imminent and a Supply Chain 2021 promise initiative was adopted with an end-goal of product demand-driven, profitable supply response addressing three objectives:
- The ability to sustain required faster clock speed cycles of new product introduction and distribution with the goal for having product available at time of regulatory approval.
- The supply chain’s mission of “patients cannot wait” implied never stock out and had to be manifested across different product supply business segments without undue impact on working capital. Adding to the challenge was a threefold increase in external supply chain partners.
- The third goal was the ability of the supply chain to ‘fuel the future’ by generating added opportunity cash savings.
Knowing the magnitude of the challenge- teams adopted a non-biased determination of what was required in Process, People and Advanced Technology capabilities. Process involved tackling the need for added manufacturing flexibilities thru late-stage product differentiation strategies. Process required connecting sales and operations planning (S&OP) with customer fulfillment synchronization.
The People aspect equated to fostering added supply chain skills and talent needs on a worldwide basis. A supply chain center of excellence was conceived addressing needs for specific process, subject matter and eventually, application technology train the trainer experts.
According to the presenter’s, not until the latter two were addressed did the transformation team began shift focus on added technology selection, and the eventual partnership with Kinaxis.
Privately held semiconductor fabrication manufacturer Global Foundries had to respond to an overall industry shift of semiconductor chip manufacturing consolidated among five global players. That required quicker responses to customer needs along with alignment of data, process and overall supply chain management roles and skills. Important, sometimes difficult learning was garnered in determining what data is most appropriate, who owns the accuracy of that data, and what matters most for lines of business. Supply chain initiatives are scrubbed by structured value analysis and reviewed constantly for proof of value to expected business outcomes.
Plasma therapeutics company CSL Behring executives described an existing “vein to vein” supply chain model where humans donate plasma which is then processed in production labs to mine different proteins, which are then distributed for treatment of sick patients.
This production process involves the creation of coproducts, in-essence, a reverse bill-of-material MRP where a single batch produces a number of plasma products. Most of the prior planning was conducted on customized spreadsheets which prompted the need for a standardized, global-wide planning process.
Executives utilized a sports analogies (Cricket, Baseball, Hockey) for acquired learning, essentially how important is to get the basics of process right, to make simple things and overall consistency a habit in overall supply chain planning and response management. Constantly knowing what the next move should be assists planners in being more responsive to solving exceptions before they incur a negative business impact.
Conference Wrap Up Session
The final session of this year’s Kinexions was a post-conference wrap-up panel consisting of select Kinaxis customers, joined by Duncan Klett, Fellow and Co-Founder of Kinaxis over 35 years ago. The panel moderator was Jay Muelhoefer, Chief Marketing Officer at Kinaxis.
Two important takeaways for this Editor, was Klett’s perspective that supply chain management can essentially be viewed as a Control System, with various inputs and outputs, along with various parameters of process investment, tuning and support resources. Indeed, such a control system must constantly adapt to changes in operating conditions that involve process, people and supporting technology dimensions. Klett’s observation was that Kinaxis has always maintained this control system perspective with particular emphasis on the ability to manage large volumes of data and in continually simplifying user productivity and use experiences.
Executives representing Raytheon Missile Systems and Lippert Components expressed positive reaction to Kinaxis’ announcement of extending the Rapid Response platform for partner-based customization.
The comment that likely resonated the most with the Kinexions audience came from Alena Jenkins of Raytheon, namely that this year’s event was once again a session of “group therapy among supply chain professionals,” where ideas and successes can be shared along with hindrances and roadblocks.
As with prior Kinexions, attendees can share humor, new associations and friends and good time held by all and.
Amen to all of that.
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