Deep Dive on 2017 Prediction Seven: Enhanced Supply Chain Intelligence Capabilities Among B2B Network Platform and Managed Services Providers Will Pay Dividends for Industry Supply Chains
The following Supply Chain Matters blog is part of our ongoing series of deep dives into each of our previously unveiled ten 2017 Predictions for Industry and Global Supply Chains.
At the start of the New Year, our parent, the Ferrari Consulting and Research Group along with our Supply Chain Matters blog as a broadcast medium, provide a series of predictions for the coming year. These predictions are shared in the spirit of assisting industry specific and global supply chain cross-functional teams in helping to set management objectives for the year ahead. Our further goal is helping our readers and clients to prepare supply chain management and line-of-business teams in establishing impactful programs, initiatives, and educational agendas.
The context for these predictions includes a broad cross-functional umbrella of supply chain strategy, planning, execution, product lifecycle management, procurement, manufacturing, transportation, logistics and customer service management.
In an earlier Supply Chain Matters blog postings, we provided deep dives related to:
In this deep-dive series posting, we drill down on our next prediction.
2017 Prediction Seven- Enhanced Supply Chain Intelligence Capabilities Among B2B Network Platform and Managed Services Providers Will Pay Dividends for Customers
In 2017 and beyond, there will exist increased industry specific needs for deeper and wider levels of customer, product, physical object and supply network focused information visibility, capture and analysis. This need is coupled to building multi-industry supply chain requirements for more predictive, analytics data-driven decision making competencies that involve outside-in insights. The objective is a literal 360-degree view of supply chain wide data and information, horizontally spanning the end-to-end supply and vertically coupling high level enterprise to shop-floor decision-support needs. Enhanced business intelligence and overall process improvements further enhances the ability of industry supply chains to support new, more innovative business models that can leverage digital technologies in areas of product or customer related services.
A means to achieve such capabilities are analytics and business intelligence engines that are now being embedded across supply chain focused B2B network platforms, edge systems and production shop floor transactional and information transfer flows. B2B business networks and edge platforms are today the prime opportunity for digitizing the horizontal and vertical flow of information and analytics across end-to-end supply chains. Whereas predominantly EDI messaging platforms were viewed as required external messaging utilities to transfer and receive transaction and electronic messaging information across disparate systems, there is now collective movement by network providers to transform these platforms to business intelligence and analytics based information repositories available to support broader supply chain and product focused decision support needs. As noted in Prediction Six, this an area where blockchain technology can have a profound long-term impact, but beyond that, many existing B2B technology platform vendors such as Ariba, an SAP Company, E2Open, GT Nexus, IBM, OpenText are already moving in the direction of blending supply chain wide planning and execution related transactional data with analytics, cognitive and business intelligence capture. Such analytics and trending information can then be moved to and from various existing business application systems related to planning and customer fulfillment.
Similarly, the vertical notions of what is being often described as either Industrial Networks, Industrial Internet and edge systems, are various physical devices communicating via IoT enabled technology, within their respective operational and performance status data streams. Here again, emerging IoT network technology providers are similarly incorporating cognitive and analytics based capabilities to synthesize the streaming levels of data being captured into information and required decision-making alerts.
An Evolving New Challenge
The evolving new challenge for industry supply chains will be the ability to exchange information and insights among various existing Cloud-based B2B networks and resident business software applications focused on either customer, product, supply, production, service or fulfillment process needs. This is a challenge that must be addressed in order to gain the full benefits of the Cloud. Ideally, supply chain teams will seek the ability to have a virtual information utility or data lake, but that could be expensive and many industry supply chain teams are not necessarily ready to manage such capabilities at this point. Today, such challenges fuel an evolving need for managed services providers or systems integrators to tie-together such structured and unstructured information and analytics in virtual streaming information and analytics data pools or zones available to all enterprise and supply chain business applications and systems.
Technology vendors now recognize this problem. For instance, Oracle recently released a Hybrid and Multi-Cloud Services utility as part of its Platform-as-a-Service (PaaS) Cloud infrastructure services. Oracle’s intent with this service is to support the needs of data movement, data transformation, data quality and applications integration among multiple Cloud platforms and applications.
Focus on a Networked Cloud Strategy
All the above stated, industry supply chain and line-of-business teams should strive to prioritize and scope certain business process decision need areas, for example customer fulfillment and logistics, or an initial supply chain control tower capability, and work with an individual platform vendor or focused systems integrator to start the journey towards streaming analytics and insights from external Cloud-based platforms. We view this as a prime process and business support opportunity for supply chain teams in 2017.
B2B or B2B-to-B2C business network platforms related to process needs in areas such as procurement, product management, planning, logistics or customer fulfillment should no longer be viewed as solely messaging or transactional platforms. Over time, they will serve as sources of analytics, insights and alerts related to process, suppliers, and customers. Business, functional and sales and operations planning teams can gain more real-time insights by broadening their perspectives beyond messaging to messaging and trending.
This concludes our Prediction Seven drill-down. In our next posting of this series, we will explore Prediction Eight reflecting on how Alibaba and Amazon will continue to battle for global online platform dominance.
© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.
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.