As noted in our previous commentary, Supply Chain Matters has featured a number of blog commentaries highlighting the various supply chain management accomplishments and challenges related to the commercial aircraft industry. Current unprecedented, multi-year customer order backlogs for new aircraft are having an effect on the entire aerospace industry supply chain ecosystem. The need for commercial aircraft manufacturers to ramp-up their supply chains to support unprecedented levels of production volumes continue to provide unique challenges for this industry.
This week, this Editor attended the Council of Supply Chain Management Professionals (CSCMP) annual conference. Besides having the opportunity to moderate a highly informative and industry focused panel discussion co-sponsored by The Washington Post and Ryder (more background and commentary forthcoming in a future posting), we did manage to take in some rather noteworthy educational sessions.
One session that stood out for this author was: Digital Control Room for Supply Chain Management, which described the development and ongoing operation of Airbus’s Supply Chain Control Room. Having featured so many prior commentaries related to Airbus’s ongoing product development, manufacturing and supply chain activities, this presentation, delivered by James Snow, Director of Supplier Management and HO Supplier Development, provided us one of the key tenets that helps Airbus to successfully scale-up its manufacturing and supply chain activities.
Snow described the Airbus Digital Control Room as the heartbeat of the Airbus supply chain, providing a singular information and resolution control hub to manage any issues occurring across the multitude of multi-tier suppliers that support Airbus’s production volumes.
Airbus currently delivers a new aircraft, on average, every 7 hours among 11 owned production facilities and 8 final assembly lines, and the need for a singular control mechanism to coordinate, resolve and communicate status information across a truly global based supply chain is clearly evident. The effort kicked into high gear when Airbus began program preparations for the new A350 aircraft introduction and ramp-up. Last year Airbus completed delivery of 14 A350’s, while 29 are planned for completion this year. Airbus has plans to eventually ramp A350 production to 13 per month.
The control center is described as a combination supplier mapping and a singular control mechanism where multi-functional teams come together to ensure that Airbus’s supplier and other management teams are focused on the same set of issues. Its evolution was a visual paper “war room” concept which many of our production management readers can well relate to. In 2014, Airbus’s top 80 suppliers were monitored for performance and capacity risks. During 2015-2016, the effort was expanded to include the entire supply chain, along with the need to enable and control activities in a digitally supported environment. Today, the supply chain control center serves as the overall focal point of the supply and production demand network, a singular control point for supplier issues managements, and a mechanism available for Airbus senior management to monitor, resource and report on current production performance.
From our lens, one of the more fascinating learning’s derived from Airbus’s efforts in this area was the application of technology. The overall technology scope was described as not one of a big-bang program deployment of the most sophisticated technology but rather one of continuous, agile rapid development utilizing standardized software applications.
The process calls for every Airbus supplier to have a common identifier supported by the capturing of rapid scan health checks for each supplier. Suppliers tracked are multi-tiered, extending to the level of tier four suppliers, as one cited example, including bathroom counter tops. These rapid scans include overall capacity status, known supplier issues as well as issues that may be caused by Airbus itself as a customer. Eight core supplier skills are monitored on a continuous basis. Any supplier issues are managed with clear action plans that are recorded, monitored and made visible.
More importantly, a process is enforced where the supply chain control center serves as the single source for Airbus management teams to coordinate and report supplier capabilities and maturity, industrial capacity and any supplier risks. Color coding is utilized to rank various supplier and/or Airbus issues and to focus Airbus’s supplier management teams on the most critical or rear-term issues needing resolution. Supplier management teams are described as now spending more of their time directly at supplier sites working on these key issues as opposed to internal management reporting and update meetings.
Articulated major benefits are teams focused on real problems and assisting suppliers with resolving their challenges. Further described is global transparency and trust among internal and external teams with early warning to issues that can impact Airbus. Once more, every level of management has identified levels of responsibility related to certain supplier issues.
An unexpected benefit was described as this tool serving as an archive of prior product design or component engineering issues and as a foundational data store to be able to more reliably predict degradation of key performance indicators. That will likely serve as a future basis for mining supply chain intelligence and more predictive analytics capabilities than can better anticipate supplier challenges down the road.
The more we heard, the more this supply chain control center sounded as a mechanism to support and serve the executive level sales and operations planning process that exists among many manufacturers.
Moving forward, Airbus has plans to enhance supply chain control center functions with mobile-based user enhancements along with making this tool available to other functions such as manufacturing engineering, product development, contracts management and customer support.
Key learning and success factors experienced by Airbus in the use of this tool is that transparency builds trust. Initially, the fear of yet another reporting mechanism hindered initial broad deployment efforts but as the control center began to remove duplicate reporting, acceptance was gained. The Airbus supplier management team placed the development focus on process and people first, with technology serving as the adapting or best enabling support tool. Strong management endorsement and use of the tool was important as well. Another key learning articulated was that low cost and low tech approaches can work when coupled with continuous, incremental phased development.
Airbus’s Supply Chain Digital Control Room development was sponsored by CSCMP as one of six selected finalists in the organization’s 2016 Supply Chain Innovations of the Year recognition award. Judging from what we observed, Airbus has implemented unique innovation in the management and control of supply-chain wide visibility and to supplier management ramp-up and issue resolution needs without the need for a elongated big-bang technology-driven deployment. We thank Airbus for allowing this capability to be shared at this year’s CSCMP event.
© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.
Earlier this month, JDA Software announced availability of JDA Manufacturing Planning, described as an innovative in-memory based supply chain planning platform to support an always-on supply chain. Supply Chain Matters via this author, had the opportunity to be briefed regarding this newly announced functionality, and we were impressed with the progress that JDA has made in providing what appears to be comprehensive supply chain planning support built on a more advanced in-memory platform architecture. The platform will no doubt enhance the competitiveness of JDA in the supply chain planning technology area and help to correct perceptions that JDA has strayed away from supply chain planning needs other than Retail and Omni-channel based.
JDA Manufacturing Planning®, Releases 2016 and 2016A, provides a broad series of supply chain planning applications which customers can adopt in an overall transformation or upgrade plan. Applications themselves are broad, spanning supply chain network design, demand, supply and inventory planning, order promising as well as sales and operations planning process support needs. Included are abilities to support contingency, landed cost and margin aware scenario planning as well as predictive or prescriptive analytics techniques. A lot of effort has been obviously focused on improvement of persona-based user interfaces and added user productivity features that will be familiar to experienced users of Microsoft Excel®. Dashboards are less fixed and now provide more flexibility for user-defined options.
JDA has additionally added a pre-packaged Fast Track Implementation process, targeting a 3-6-month timeframe in assisting customers in quicker time-to-benefit related to this platform
Perhaps the most compelling feature of the platform is JDA’s efforts to leverage always-on, advanced in-memory distributed computing framework and grid fabric technologies built over an Oracle RDBMS data persistence foundation that supports advanced optimization and heavy data lifting, combining data and business logic as one routine. The net result for users is the ability to view, assess and address the impacts of either or both product demand or product supply changes in a more real-time environment.
From our lens, SAP ERP and SAP SCM users attempting to implement SAP HANA based in-memory capabilities for supply chain planning now have another alternative. Also by our lens, this platform provides a potential challenging alternative to Kinaxis’s Rapid Planning suite, depending on how both vendors compete on price and services.
There are some shortcomings. JDA missed an opportunity to leverage this platform to also include supply chain execution and deeper customer fulfillment data, making this closer to a true supply chain control tower support capability. Further missing was the ability to take greater advantage of JDA’s new development collaboration with Google for inherent Cloud-based platform capabilities. Having now moved on from the prior reported Honeywell acquistion to now a white knight with a renewed level of business funding, the opportunity still remains to include supply chain execution elements provided from the elements of RedPrairie and to augment this platform in an overall Google Cloud offering.
None the less, the landscape of supply chain planning technology has become much more competitive and customers now have more compelling options in which to consider. The other interesting twist is that of Oracle which from behind the scenes is providing other alternatives to supply chain and integrated business planning migration paths not predicated solely of the adoption of SAP HANA.
© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.
JDA Software announced today that its latest product release, version 9.0 is now available. Supply Chain Matters previously provided some hints to this new release in our coverage of the JDA FOCUS 2015 customer conference in April.
This version 9 release is significant from three perspectives:
- It marks a major stepping-stone in JDA’s plans for providing customers added support in connecting supply chain physical and digital planning as well as customer fulfillment execution processes. Release 9.0 further provides demonstration of JDA’s efforts to reorient the technology provider’s vertical industry support to provide continued support for Omni-channel and online focused retail industry needs as well as core discrete and process based manufacturing industries support. This strategy was re-iterated at FOCUS in April.
- Release 9.0 features the initial introduction and utilization of new JDA FLEX integration platform, designed to connect applications and information sources across heterogeneous systems. It further provides new opportunities for integrating supply chain planning and execution applications including the integration of the RedPrairie warehouse management and supply chain execution applications which were acquired in 2012. The JDA FLEX technology is further being utilized in the support of Omni-channel end-to-end Retail Omni-channel fulfillment processes, including the awaited connections to IBM’s Retail Commerce and Order Management (former Sterling Commerce) platform that was initially jointly announced in November of last year.
- The Release introduces what JDA describes as: “Risk Aware, Agile Supply Chain Planning.” Included in new enhancements are:
- Automated parameter and level optimization in product demand forecasting, allowing the system to analyze available historical data and recommend most appropriate forecast parameters.
- The addition of a termed Replenishment Interval Workbench that allows planners to analyze and factor risk mitigation and more effective vendor or supplier negotiations.
- In-memory, constrained aware S&OP planning with significantly added system scalability and performance, along with enhanced in-memory scenario planning allowing comparison of multiple scenarios utilizing a form of scenario scorecard functionality.
- An enhanced Agile Control Tower that adds guided-response forms of descriptive, prescriptive diagnostic and predictive analytical capabilities.
- Enhanced scenario and task planning within Factory Planning and Scheduling.
Another noteworthy aspect for this product release is additional enhanced functionality added to JDA Intelligent Fulfillment for support of Click and Collect online fulfillment needs that include pick-up at designated retail store, destination-driven demand categorization to match the actual physical presence of demand such as a retail store or online channel with inventory placement needs. Supply Chain Matters has previously shared our positive impressions with the current and planned functionality of Intelligent Fulfillment and we continue to believe that this application will be a strategic underpinning for JDA’s efforts in supporting online Omni-channel and multi-channel order fulfillment process needs.
More for more detailed information, readers can view an upcoming JDA Software webinar being held on July 23.
In the coming weeks, Supply Chain Matters will provide further, more detailed commentaries related to specific functionality and business process support aspects of this new JDA release.
Disclosure: JDA Software is one of other sponsors of the Supply Chain Matters© blog.
This author recently had the opportunity to interview Kinaxis senior executive Trevor Miles where we explored some important topics related to multi-industry supply chain challenges and the Kinaxis efforts in supporting these challenges. In our conversation, we covered a number of topics related to supply chain business processes and enabling software technology, as well as the current state of predictive analytics.
The following summarizes our questions and dialogue.
Q: Would you describe for our readers, your current role with Kinaxis?
My role at Kinaxis is Vice President, Product Innovation and Thought Leadership, and my activities are focused in three areas. They include overseeing long-term strategic direction for products, working with key customers and prospects on future product direction, and providing an external voice for Kinaxis in areas of brand awareness, social-media dialogue and speaking at major conferences.
Q: What in your view have been some of the major accomplishments for Kinaxis during the past year?
We at Kinaxis are very pleased to see strong demand and continued traction among our key targeted industry verticals. The success of any SaaS company is obviously reflected in customer adoption and we are pleased with our broad market traction and customer adoption rates, highlighted in particularly by record quarterly growth in subscription revenue in Q1 of 2015.
From a product perspective, continued expansion of the Kinaxis RapidResponse functionality with the addition of multi-tiered inventory optimization, attribute-based planning and supply chain segmentation support continues to generate lots of customer interest.
A key business accomplishment was our very successful initial public offering last June on the Toronto Stock Exchange.
Q: In your travels, speaking at conferences and talking with prospects and customers, what do you sense as being the most dominant business process challenge described by cross-industry supply chain or Sales and Operations teams? In that same vein, what is described as the most significant technology challenge?
A frequent business process challenge often reflected by multi-industry sales and operations planning (S&OP) teams is the need to attack the various cross- functional information and decision-making silos involved in the process. I often hear needs related to having a more detailed understanding of the various tradeoffs of decision-making, especially related to various competing metrics. Today, many S&OP processes are supported by IT architecture that was largely functionally-focused which perpetuated islands of information. Whereas some of our competitors capture and synthesize data between organizations, our focus is to capture all pertinent information related to planning the entire supply chain.
Regarding the most significant technology focused challenge, it often relates to data. Many of our larger customers average upwards of 19 instances of an ERP application running across the supply chain network, some even higher. When considering today’s needs reflected in S&OP and more frequent new product introduction cycles, some information is not even in the existing ERP system but resides elsewhere. The challenge is making sense of the data and providing proper context in making data actionable.
Industry analyst firm Gartner recently modified its technology maturity model to include five stages, instead of the prior four. Stage 3 equates to integration of all data sources, and I find that repeated over and over again. The challenge is making sense of information.
While we are on the topic of technology, we should include elements of talent management. Today, there is a clear need for a more horizontal focus and understanding of the supply chain. Some organizations have a talent pool that remains too focused on vertical functional requirements without full consideration of the various tradeoffs and impacts related to supply chain-wide decision making.
Q: How is Kinaxis preparing to address the challenges described above?
Customers are looking for a solution to two fundamental challenges. They include the constant need for IT resources to mine ERP data in the desired format and the ability to support larger planning models. The Kinaxis Data Integration Server is directed at these data harmonization needs. By feeding raw data into a separate server we can facilitate significant reduction in the memory requirements for the planning server, allowing greater and more responsive performance in planning process needs along with more flexibility in data integration needs.
Kinaxis RapidResponse is architected as a single data model for planning and it associates data to specific people responsible for decision-making. With the introduction of both an integration server for housing and categorizing raw data, the planning server can be even more responsive in generating supply chain wide planning models. If a demand planner changes the future forecast, there is feedback as to how-much of the plan is likely to be met on-time. Planners can be more proactively alerted to unplanned events, as well as the consequences of the event. Additional what-if scenarios can be generated to ascertain most feasible approaches and/or tradeoffs in accomplishing a certain plan.
Q: Kinaxis and its teams have spoken previously about the notions of Supply Chain Control Tower capabilities. What’s your assessment of where this type of capability stands today? In your view, how long would it be before we begin to observe wider deployments of such capability?
There are two distinct approaches to control towers, one being a logistics execution approach, the other being an operations and planning resource approach. Kinaxis has advocated and supports the latter, but there is a role and value for both capabilities. The need to bring together planning and execution in a near real-time control tower perspective remains an important and differentiated capability.
The logistics approach is focused on day-to-day execution, namely “where’s my stuff?” and “Is it on-time?” From a change management lens, many organizations are not ready to get their hands around both execution and planning and there is currently more internal support right now for an execution focus. However, Kinaxis remains committed in support of the planning and operations focused supply chain control tower.
Q: Supply Chain Matters describes how more predictive analytics capabilities will be widely incorporated within supply chain planning, S&OP and response management capabilities? In your view, what’s the reasonable timetable for teams to expect to be able to leverage these capabilities across multi-industry supply chains?
Supply chain planning, in all its forms, has been predictive since its inception, demand forecasting being the perfect example. However we find that the notion of predictive analytics is a squishy term, and not clearly understood by industry supply chain teams. And the value of prescriptive analytics – for example, the ability to determine likely demand satisfaction issues based upon supplier decommits – has not been exploited fully by organizations. Supply chain communities are still trying to absorb the potential impacts of Internet of things and data lakes. These can be exploited by supply chain organizations to know sooner and act faster using prescriptive analytics. For predictive analytics it is more about knowing about the specifics of data being collected, the relevancy and context of the data before making the leap towards more predictive analytics. We do not see the supply chain organization leading the charge for predictive analytics, at least not now.
This concludes this executive interview with Kinaxis executive Trevor Miles. For further information, please click on the Kinaxis logo located in our Supply Chain Matters sponsorship panel.
Bob Ferrari, Executive Editor
Disclosure: Kinaxis is one of other current sponsors of the Supply Chain Matters blog.
The synchronization and management of the Omni-channel customer fulfillment experience has fast become a complex problem for retail industry business management and supply chain teams. The added dimensions of taking orders online or from physical stores and fulfilling from multiple channels adds complexity and needs for smarter and more-informed decision-making. Cost to serve and determining impact to profitability become ever more a challenge.
Yesterday, in conjunction with the Focus Connect 2014 event being held in Barcelona, JDA Software and IBM made a joint announcement that Supply Chain Matters believes demonstrates the ongoing importance and continued evolution of Supply Chain Control Tower (SCCT) support capabilities in the supply chain technology market. This announcement could also portray a possible broader relationship among these two technology providers in the months to come.
The specific announcement involves a joint collaboration among JDA and IBM development teams to address the need to process and fulfill retail industry Omni-channel orders in a more efficient and more intelligent manner. The approach calls for combining the elements of JDA’s warehouse management, demand planning and workforce planning business support capabilities (JDA Intelligent Fulfillment and Labor Productivity) with IBM’s Sterling Distributed Order Management network platform capabilities. In essence, this approach marries elements of supply chain planning and execution with an end-to-end order management and fulfillment platform that connects all channel participants. The combined capability is expected to be offered in either an on premise or cloud deployment option, the latter being supported by IBM’s SoftLayer business arm. The joint development effort is currently underway and according to the announcement, is expected to be available in late spring of 2015.
This author had the opportunity to speak with IBM regarding the joint announcement. Discussions among these two technology providers began in January of this year at the National Retail Federation (NRF) conference. Both companies have a rather strong market presence among global retailers and each was hearing customers speak to the increasingly complex challenges currently manifested in Omni-channel customer fulfillment, including the dynamic aspects of having to manage the tradeoffs of inventory, appropriate fulfillment location, transportation and labor requirement needs. In May of this year, our Supply Chain Matters commentary associated with attendance at IBM’s Smarter Commerce Summit highlighted the evolving dimensions of Omni-channel and the needs to provide more predictive and prescriptive decision-making capabilities into the process.
The joint press release includes a quote from joint customer Lowe’s Home Improvement, and we were informed that both firms have identified interest from other unnamed retailers as well. Apparently, the original timetable called for announcement of joint product integrating JDA and IBM elements later in 2015, but it was obviously pushed-up to coincide with this week’s JDA customer event.
Our supply chain and B2B business community education series regarding SCCT has articulated that the concepts of control towers involve efforts to bring together supply chain planning and execution business process elements with enhanced intelligence and more predictive decision-making that can be provided in near real-time dimensions. There have been a number of strategic movements underway among multiple supply chain, enterprise and ERP technology vendors to build, broaden or position SCCT capabilities. We view this JDA-IBM joint announcement as yet another dimension of such efforts. JDA has the potential to leverage a broader more feature-rich distributed order network platform that supports more dynamic process parameters while IBM garners access to deeper retail-specific supply chain planning and execution support functionality. We have been informed that JDA is building and architectural framework that supports plug-in capabilities from other vendors, similar to what we have heard from supply chain planning providers such as Steelwedge and its connection to the Salesforce.com platform. Similarly, supply chain business network provider E2open augmented supply chain planning and product management support capabilities with the acquisition of Icon-SCM and Serus Corporation respectively.
As noted in our previous commentaries, IBM has been integrating elements of Sterling order management and B2B messaging capabilities with its IBM Emptoris sourcing and procurement business suite, and has communicated efforts to bring the predictive elements of Watson decision-making to online fulfillment and supply chain synchronization challenges. Thus, the SCCT business process support elements continue to broaden from many dimensions and are a sign of what will transpire from SCCT support technology down the road.
In the meantime, readers and joint JDA and IBM customers should watch the ongoing joint efforts among both providers for further signs of what is to come. Just like the prior announcement of the partnership among IBM and Apple, both parties provide the potential to remove the information integration burden for today’s highly complex supply chains.
Disclosure: IBM, E2open and Steelwedge have current or prior business relationships with the Ferrari Consulting and Research Group, parent of the Supply Chain Matters blog.