Supply Chain Matters is pleased to once again announce to our readers that supply chain technology provider Kinaxis will continue as one of the Lead sponsors of this blog.   

Kinaxis was the very first sponsor of this blog in 2008, and we look forward to continuing our close relationship that has occurred over the past four years.  Kinaxis recognized early on that supply chain professionals would increasingly turn to social media channels for their educational needs and that blogs such as Supply Chain Matters would play an increasing role in how technology users seek out thought leadership and gather insights on business process and technology needs.

Kinaxis has successfully designed and continues to support a highly successful supply chain focused social-media community. The Supply Chain Expert Community web site garners multiple accolades, including a recent interview and citing conducted by the American Marketing Association.  The Expert Community is now approaching 7000 registered members, a remarkable achievement. This author was honored to be a featured weekly guest contributor during 2012.

Founded in 1995, Kinaxis and its flagship RapidResponse technology has been adopted by global industry leaders such as Casio, Flextronics, Jabil, Raytheon, Qualcomm and others to manage and respond to their supply chain resource planning needs within volatile and rapidly changing business environments. This author’s familiarity with the company’s capabilities began in 1999-2000 when the company was initially named WebPlan, and as an industry analyst I have witnessed an incredible growth path since.  The year 2012 was once again an incredible year for Kinaxis that included double-digit sales growth and sustained profitability. Highlights included expanded industry presence in Agro Sciences with The Dow Chemical Company, mid-market presence with BTI Systems, and continued global geographic customer presence with Schneider Electric in Europe and Konica Minolta in Asia. This provider was also achieved a “Best IT Technology Partner” award from Celestica, as part of that company’s Total Cost of Ownership Supplier category.

Today, the RapidResponse application is often utilized as a decision hub for supply chain planning, sales and operations planning, and collaborative planning processes across an extended, global based supply chain.  The value of the technology is in its ability to allow customers to plan a coordinated response to supply, capacity or demand variances that often occur. In 2011, RapidResponse Control Tower was introduced as a cloud based offering to assist manufacturers and brand owners in securing broader visibility and process control across the extended global supply chain. New enhancements now include Integrated Project Management, to singularly manage projects, Process Orchestration to coordinate and track activities within cross-functional business processes, and Rapid Supply Chain Data Integration, to facilitate data integration among multiple data sources and heterogeneous data environments.

Extended technology ecosystem partnerships include those with GT Nexus, JFE Systems and WNS.

If your organization has needs for extended supply chain visibility, control tower, or sales and operations planning process support capabilities that can be implemented in a very timely manner, I recommend you place Kinaxis on your short list.

Bob Ferrari, Founder and Executive Editor

The World Economic Forum has released a new January 2013 research report, Building Resilience in Supply Chains, (download web link) which provides interesting data on how important supply chain risk mitigation has become on the global stage. This report was aided by contributions Accenture and Zurich Insurance Group.

This World Economic Forum Supply Chain Risk Initiative began in 2011, and has since fostered a series of workshops among industry and governmental leaders throughout 2012.  This latest Phase II report explores government and multi-industry sector views on systemic supply chain risk with recommendations for building a resilience framework to manage such risks. It includes results from an annual survey of over 1000 experts who were asked to review the landscape of 50 global risks. What makes this report of further interest is its inclusion of global-wide viewpoints, including those from Asia based countries which represent many tiers of current global supply chains. It also provides a new quantification as to the global awareness, cost and impact of major supply chain disruption. It cites Accenture research noting that more than 80 percent of companies are now concerned about supply chain resilience and that significant supply chain disruptions can cut the share price of impacted companies by 7 percent on average.

The report concludes that there are three “must have” requirements for building more resilience:

• The need for a common risk vocabulary
• Improved data and information sharing across industry supply chains
• Building greater agility and flexibility into resilience strategies

Further noted was that throughout 2012, systemic risks continued to be a top concern for supply chain managers globally. The report also validates what Supply Chain Matters incorporated in last year’s predictions for global supply chains, namely that the continued high cost of disruptions has led insures to reduce coverage and increase premiums for certain global regions.

The top-five risks highlighted in the report were:

1. Severe income disparity
2. Chronic fiscal imbalance
3. Rising greenhouse emissions
4. Water supply crisis
5. Mismanagement of population aging

Severe income disparity was noted as the risk most likely to manifest over the next 10 years, while major systemic financial failure was a risk having the highest impact. In 2012, extreme weather emerged as a more prevalent concern, no doubt from the realization of severe climatic related disruption across the globe.

An additional 2012 survey among 469 executives and risk experts identified three non-traditional risks:

1. Social contract disintegration
2. Inflexible and uncoordinated (governmental) regulation
3. Cyber-risk

The notions of cyber risk are very much top of mind.  This week, both the New York Times and the Wall Street Journal reported that their internal IT and email sites had been the victim of cyber spying. Bloomberg and Thomson Reuters also confirm that attempts to penetrate each of their systems have previously occurred. Last year many global banks were targeted by cyber threats.  Imagine if your mission critical supply chain systems are penetrated for unwelcomed reasons. As part of its conclusions, the report calls out for: “IT systems to be scalable, secure and re-routable”

Getting back to the World Economic Forum report, noted is that despite fears that building more resilience into the supply chain will create cost, most experts surveyed noted that efficiency and resilience can coexist.  That is an important conclusion that readers might want to dwell upon.  The report acknowledges that it can be challenging to permeate an organization with incentive structures that focus on managing risk.  However, this author would quickly add that a framework of shared risk that is much broader than finance and/or procurement can be something to consider.

In this same vein, the report notes that European and North American respondents emphasize building a culture of risk management across suppliers as a top priority, however this is less valued in Asia, where business growth elicits tolerance for high risk.  That, in our view, is an interesting finding, one that procurement and sourcing executives should dwell upon.

This new report on global supply chain risk is certainly one that you should find some time to review for applicability to your ongoing risk mitigation strategies and investment plans.

If your organization needs outside, objective assistance in synthesizing supply chain risk mitigation plans, do give us a ring.

Bob Ferrari