Supply Chain Matters recently had the opportunity to speak with contract manufacturing services (CMS) firm Jabil’s, specifically Vice President of Supply Chain Solutions and Global Logistics, Fred Hartung. If readers had any perceptions that certain CMS firms were laggards in advanced technology adoption, our interview led to quite the contrary perception.
Jabil has been featured in supply chain industry headlines these past two weeks. At the recent Gartner SCM Executive Conference, Jabil’s intelligent supply chain capabilities in real-time visualization and advanced analytics resulted in receiving an award as a “Supply Chaininnovator.” Hewlett Packard unveiled what it termed as the first production-ready commercial 3D printing system and Jabil participated in the press conference. At last week’s SAP Sapphire customer conference, SAP and UPS announced a partnership for services related to an on-demand 3D printing network which involves this CMS as well.
Hartung oversees multiple roles including responsibility for advanced supply chain technology, digital supply chain, advanced planning and trade compliance. He additionally heads a team overseeing Jabil’s supply chain global network.
Our discussion touched on a number of business and technology areas.
Regarding the current CMS industry landscape, Hartung described changing global transportation costs, foreign exchange rate volatility and changes in the “value density” of products as all dynamic industry forces.
More manufacturing focused OEM’s now see themselves as incorporating more and more software and technology as major parts of product design and functionality features and that impact spills over to contract manufacturers. OEM customers were further described as increasingly practicing near-shoring manufacturing sourcing practices aligned to major geographic product demand regions with Mexico and Vietnam really taking off along with resurgence towards manufacturing in Malaysia. Hartung indicated Jabil’s belief that 3-D printing will make a big difference in localized manufacturing tied to customer fulfillment. OEM’s are still experimenting with incorporating 3D printing concepts into product strategy and Jabil is assisting by maintaining various labs across Silicon Valley.
We discussed what is often described as the number one multi-industry supply chain decision-support challenge, that being gaining and enabling end-to-end planning and customer fulfillment visibility. Hartung described this challenge in the context of “actionable visibility”, a focus on the most pertinent information supporting business processes along with “in-control” digitized streaming information flow that is anchored in analytics-driven decision-making capabilities. Another Jabil consideration in its use of advanced analytics is directed at managing and mitigating supply chain risk. Nine separate categories of risk are continually tracked ranging from low to higher supply chain disruption and risk factors.
In the area of addressing Internet of Things, machine learning and cognitive computing opportunities, Hartung acknowledged that information security has got to be an area to be taken very seriously, and prominent in the early design process. Jabil views IoT as an enabler of new business models for customers and for Jabil, and here again, leveraging analytics, either prescriptive or predictive, is the important area of concentration. Responding to the question of whether customers ready for these types of initiatives, Hartung indicated that while Jabil is way ahead on the learning curve, customers indicate that they want to hear more.
Besides incorporating advanced supply chain technology and multi-tenancy practices across Jabil’s own extended supply chain, the CMS is increasingly being called upon to assist OEM customers themselves in deployment of such technologies across their extended supply chains as-well. This has been a new area of technology services for some CMS providers.
As a key supply chain partner in many more multi-industry settings, a contract manufacturer must be knowledgeable of the business process and enabling technology competences that make a difference in meeting both customer and internal business and supply chain outcomes. This is an industry that moves in lock-step with its customers, and is constantly challenged with narrow margins to work with.
As a recognized supply chain industry analyst, this author has had the opportunity to view a number of Jabil industry presentations over past years as well as to speak with the firm’s executives. This CMS has consistently demonstrated a willingness to leverage and collaborate with customers on advanced technology use cases across its supply chain management processes. After my recent interview, I am further impressed with the firm’s understanding and practice of leveraging areas where technology enablement can indeed be a facilitator of a more adaptive and resilient supply chain.
© Copyright 2016. The Ferrari Consulting and Research Group LLC and Supply Chain Matters® blog. All rights reserved.
River Logic Launches Cloud-Based Supply Chain Decision Support Capability Based on New Prescriptive Planning Platform
Last week, River Logic, a technology firm with a mission to establish prescriptive analytics and optimization capabilities in business planning and decision support needs announced a new Cloud based platform, Prescriptive Planning and Performance Management. In addition to the platform, a flagship application built on the platform was also released to help support decision making for S&OP/Integrated Business Planning. Supply Chain Matters had the opportunity to participate in a pre-briefing related to this application and this author was somewhat impressed with the functionality and potential business benefits for customers.
As noted in a Supply Chain Matters market education commentary published in January, while the term integrated business planning is sometimes depicted as a specific technology or application, it is really about the need for enterprise functions of a firm to be aligned towards a single set of financial, line-of-business, product and operational outcomes. The Sales and Operations Planning (S&OP) process is often the most likely mechanism for consideration of enterprise-wide integrated business planning because it consist of multi-functional representation and supports executive-level decision-support. Where the S&OP processes can often stumble, especially with today’s faster cycles of business decisions is when a lack of enterprise level information integration such as financial and product planning data occurs or when support teams constantly struggle to gather, classify and continually align such information.
River Logic’s corporate roots stem from building holistic optimization models including supply, demand and financial capabilities supporting cash management for banks as well as price, procurement and trade promotion optimization. The key implementers of such tools were corporate strategy consultants with deep financial knowledge who helped drive the connectivity between operational and financial data models needed to perform forward looking prescriptive analytics.
River Logic teams recognized that many supply chain organizations often encounter difficulties with the ability to implement full optimization based planning capabilities. Instead, most, especially those in complex ERP support environments such as SAP, opt on a less-complex, heuristics based approach which limits the benefits of end-to-end supply chain analytics that can address detailed order line-item demand, splitting of resource requirements or identifying or optimizing total supply chain throughput constraints. A natural evolution for River Logic has been to augment its financial modeling and operations knowledge into abilities for S&OP teams to optimize on cross-functionally defined operational, tactical or financial constraint criteria such as cash balances, gross margin, service level, inventory or net income, to name a few.
The architecture of this application consists of two components. The first is the River Logic platform developed on components of Microsoft Azure platform-as-a-service technology, designed to support end-to-end prescriptive analytics focused planning and performance management via a three-part planning technique consisting of Plan, Optimize and Track. The second component is configurable and scalable applications that are built either by River Logic, its partners or customers. The platform and applications are built from OLAP data cubes supported by in-memory based technology.
River Logic Plan supports the ability of the S&OP process to create and support a product demand and supply plan, the ability to organize and update master data related to business profiles, and support for overall end-to-end planning workflow management. Key capabilities consist of a relatively user-friendly executive dashboard, product demand analytics including a full-blown product demand planning capability, scenario comparison, factory analytics and a self-service report generator. The tool further allows support for workflow management.
River Logic Optimize supports the ability to model required decisions that relate to strategic objectives of the organization, policies associated to the end-to-end supply chain such as inventory, service-levels or cost, the financial costs and key assumptions associated with individual business processes and end-to-end supply chain.
Once the base scenario supply chain plan information is created for the S&OP process, an organization can assess the plan generation in the context of performance, profitability, added opportunities or risk considerations. Base scenario results can be routed to other functions within the organization. The application design assumes that the financial organization is a key participant in this process thus supporting a more inclusionary and collaborative scenario or what-if management process that involves financial and sales management.
What impressed this supply chain industry analyst were the River Logic visual modeling capabilities that allow for a singular, integrated model of the enterprise business that includes physical/logical processes and financial flows. The constraints that are present within the model are referred to as levers.
The River Logic Optimize tool allows the key levers associated with the models to be exposed to business users through a compelling user experience driven tool that is built on Microsoft Azure PaaS.
Once the plan has been published to existing systems of record such as a backbone ERP system, River Logic Track provides ongoing performance management and monitoring support to assist the S&OP organization in taking any corrective actions needed to meet integrated business planning objectives. River Logic’s stated Go-to-Market is through both direct as well as partner channels. Overall this is an impressive technology, but at the same time, Implementation and adoption of this technology will require some assistance from a qualified partner to assure ultimate benefits can be garnered by the application. That is a positive message because organizations need to avoid the traps encountered by previous attempts to implement sophisticated optimization technology. To that end, River Logic has indicated plans to augment its internal training and partner focused community with the capabilities and skills required to assure successful phased implementations of respective components.
The benefits of prescriptive analytics are now closer at-hand and River Logic is one of a select few packaged software vendors that supports augmenting S&OP processes with integrated business planning capabilities.
Readers desiring further information regarding this innovative new prescriptive planning platform can visit this River Logic planning platform web site.
© 2016 The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All Rights Reserved.
Disclosure: River Logic is one of other sponsors of the Supply Chain matters blog.
This week, this Editor attended and spoke at QAD Explore 2016, the annual customer conference for ERP technology provider QAD. Candidly, this was my first experience attending this conference and I was impressed from a number of perspectives. This posting is one of subsequent commentaries that will explore such impressions and insights.
From an ERP technology support perspective, QAD is primarily serving tier one and other mid-market manufacturers and services providers as well as divisions or lines-of-business needs of major global manufacturers. Regarding the latter, one positive impression were the names and affiliations of certain corporate attendees present and interactive at this conference, corporate names often associated with a very large global German based ERP provider.
Since 2012, QAD has been investing a hefty R&D budget directed at a major revamp of the firm’s ERP applications and technology deployment strategy. The effort is termed “Connected Enterprise” and it includes emphasis on enabling what this technology provider terms a more effective organization with more connected business processes. The emphasis is on providing more standardized solutions, a more flexible platform, suite-wide analytics with product enhancements supporting program/project management, manufacturing automation and customer engagement needs. Anther major emphasis is directed in enhancing the user experience and in providing both Cloud ERP and Cloud EDI deployment options. During the conference, executives announced that 30 percent of QAD’s existing customers are now utilizing the Cloud platform.
Regarding Cloud, since March of last year, the ERP technology provider has embarked on what it terms as its “Channel Islands” development strategy, a series of twice annual releases further enhancing Cloud ERP. The effort began with the Santa Cruz Release in March of 2015. Other releases are “Channel Island” planned for 2017 and “Santa Rosa”, planned for 2018. Each release, the result of joint-development efforts with existing customers among different industry sectors, addresses added Cloud based functionality needs.
What impressed this analyst was the flexibility of options that QAD is providing its customers. Instead of a forced march approach compelling customers to move to the Cloud, QAD has fostered options to both maintain existing behind-the-firewall applications and supplementally deploy Cloud based applications within an overall cohesive systems architecture framework. Cloud modules are provided in process areas termed Customer, Manufacturing, Supply Chain and Finance. Overall, QAD’s emphasis is in helping its customers overcome any major disruptions related to advanced technology deployment via a strategy of continuous, manageable extensions and/or release upgrades. That is quite refreshing from an ERP provider.
A final impression relates to two prior acquisitions that QAD made related to supply chain support needs which are now incorporated both as add-ons to QAD’s ERP support capabilities and as separate operating divisions.
In June of 2012, QAD acquired European based supply chain planning technology provider DynaSys S.A., a specialized planning vendor catering to specific mid-market industry players within France and Europe. Since that time, the supply chain planning capabilities of DynaSys have been incorporated in what is termed Demand and Supply Chain Planning (DynaSys Cloud DSCP) within QAD. As noted, also as an operating division of QAD with an independent branding, DynaSys provides supply chain planning support for non-QAD customers, including those with other ERP backbone systems. This has fostered experience that supports the demand and supply chain planning needs of broader industry verticals and integration experience with other ERP and legacy systems.
Another operating division is Precision, a Cloud based transportation management and international trade compliance technology provider that operates in a similar manner. QAD and non-QAD customers can adopt Precision’s trade management support capabilities.
I had the opportunity to conduct introductory briefings with executives from both of these operating divisions, and candidly, was very impressed with technology and support efforts undertaken by both. So much so that I will be conducting more in-depth briefings upon which highlights and insights will be shared in a later Supply Chain Matters posting.
In a subsequent postings related to QAD Explore, we will share more impressions and insights related to QAD customers and their needs, as well as discuss the session that this author served as a guest panelist. Our panel session addressed the ongoing challenges and root causes of skill and training gaps related to today’s manufacturing and supply chain industry environments.
© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All Rights Reserved.
Supply Chain Matters is very pleased to announce and welcome as our newest Named sponsor, LLamasoft Inc.
LLamasoft’s is a supply chain technology innovator focused on hard-core predictive and prescriptive analytics, and their software is used across the globe in every major industry to enable continuous supply chain design. This Editor and independent supply chain industry analyst has been following the stellar growth of this software provider since its founding, and LLamasoft’s market prominence remains impressive. In fact, in each of the last four years LLamasoft has been recognized on the Deloitte Fast 500 as the fastest-growing supply chain software company in North America.
After the initial release of its flagship product Supply Chain Guru in 2002, LLamasoft has substantially increased its market presence. It was the first company to offer supply chain simulation technology alongside numerous optimization approaches (network, multi-echelon inventory, production, capacity, product flow-path, cost-to-serve, etc.) to enable better analysis of time, variability, and risk. LLamasoft was also an early leader in the “green” supply chain movement by offering a fully integrated greenhouse gas emission modeling capability. In 2012 LLamasoft launched its transportation optimization tool, and numerous other product developments and innovations led to its 2014 launch of SupplyChainGuru.com, the first cloud-based supply chain design platform and DataGuru, a first of its kind data blending and connectivity application.
In 2015 LLamasoft announced the acquisition of the IBM LogicTools suite, as well as the Barloworld supply chain software division which included the CAST and Optimiza network design and planning products. In that same year the company received a $50 million capital investment from Goldman Sachs for accelerated development and growth initiatives.
Headquartered in Ann Arbor, Michigan, and with offices across the globe, LLamasoft remains an active leader and innovator in supply chain excellence and innovation, advancing technology focused on continuous improvement of enterprise supply chains involving a variety of well recognized enterprises. Today, over 50 percent of Fortune 100 member supply chains are designed with LLamasoft technology.
In conjunction with LLamasoft’s sponsorship, Supply Chain Matters will be featuring over the next 6 months an updated market education series of commentaries related to supply chain wide visibility. This is an area consistently cited by many supply chain leaders as a continued perplexing challenge. It is an area that includes the need for a unified source of supply chain planning and fulfillment information with data that is accurate, consistent and cleansed. It requires a data streaming effort that can be leveraged by supplemental applications that support data visualization, analytics and enhanced and more-timely decision-making.
In our forthcoming market education series Supply Chain Matters will address the foundational aspects and business process foundations of extended supply chain visibility. We will further address information technology considerations as well as critical success factors, change management and key learning derived from various industry initiatives in this area.
Join me in welcoming LLamasoft as our new sponsor of supply chain wide visibility thought leadership. For more information regarding this innovative technology provider, readers are encouraged to visit the LLamasoft web site.
Founder and Executive Editor
April brings about the kickoff of spring industry and technology focused conferences and briefing sessions for industry analysts including this independent supply chain industry analyst. Over the coming weeks I will be attending and sharing impressions a number of venues and events.
This week, I was invited to attend the Open Text 2016 Industry Analyst Event held in a Boston. Some of our readers that may not be directly familiar with Open Text which categories itself as an Enterprise Information Management (EIM) technology support provider. However, they may be supporting their supply chain messaging and transactional needs from this vendor’s technology network.
Readers who have been following our Supply Chain Matters commentaries focused on end-to-end supply chain network technology platforms may recall GXS. In a 2012 commentary, this Editor declared GXS as a hidden gem in B2B information services. This company’s heritage stemmed from the late sixties with its initial founding as General Electric Information Services (GEIS) providing computer time-sharing to general users, migrating to support value-added network (VAN) services such as EDI for both GE and external clients. By 1998, GEIS’s global electronic trading community exceeded 100,000 trading partners, and in 2002, the renamed GXS was spun out as an independent technology services provider purchased by venture capital firms Francisco Partners and Norwest Venture Partners.
In 2005, GXS was provided the opportunity to acquire the former IBM EDI and Business Exchange Services network. In 2010, GXS also acquired a company called Inovis, which we later highlighted for its innovative B2B collaborative process support potential.
By 2011, this B2B services provider had garnered over 40,000 network clients including 75 percent of Fortune 500 customers. At the time, GXS direct materials and associated services networks were reportedly processing over 12 billion transactions representing a highly significant dollar volume of electronic commerce. In 2013, its network was renamed the GXS Trading Grid. Yet in all this time, GXS struggled to deliver robust profitability growth.
In November of 2013, GXS was acquired by Open Text for an estimated $1.2 billion, roughly 2.4 times GXS Fiscal 2012 revenues. The stated goal of the acquisition was to combine OpenText’s Information Exchange capabilities with GXS’s portfolio of B2B managed and integration services.
Since that time, we have monitored ongoing progress from a B2B supply chain network lens.
In June of 2014, this author scribed his impressions from the Open Text Industry Analyst briefing event. In summary, I had walked away with many open questions regarding the broad scope the strategy, and specifically, more concentrated strategy and emphasis on further leveraging B2B supply chain and specific manufacturing and retail industry and emerging online commerce support.
I purposely stayed away from the 2015 briefing event, but elected to attend this year’s event to ascertain progress in B2B supply chain network focused areas.
Because of current time constraints, I will refrain from a detailed commentary as to specifics. I can however share that the strategy is finally showing promise, one that brings together the tenets of EIM in the dimensions of supply chain messaging, managed services, business process management and deeper network-focused analytics.
In conjunction with this week’s Analyst event, Open Text formally announced OpenText Release 16, what the vendor describes as the most comprehensive, integrated digital information platform. OpenText Release 16 consists of two separate offerings, Open Text Suite 16 and Open Text Cloud 16, combined within a single platform that manages and analyzes the entire flow of information. In addition, OpenText Release 16 can be deployed on-premises, in the cloud or in hybrid cloud environments.
We learned that with Cloud 16, the GXS Trading Grid is renamed the Release 16 Business Network, and moves beyond information exchange will include support in process areas related to:
- Procure-to-pay information and transactional management
- Logistics track and trace
- Trading partner digitization and analytics
- Electronic invoicing and Ecommerce needs
- Supply chain analytics
Of further interest is planned introduction of what is termed as Supply Chain Activity Index, an analytical based aggregate view of the B2B network, and forms of Business Process Management (BPM) support for processes that span the supply and value chain network. These two areas should really peak interest, depending on eventual design and functionality.
As for now, this analyst is modifying his prior impressions. Open Text may indeed be on the road towards addressing the various complex and fast-changing requirements for supporting today’s globally extended B2B business process networks. It is far more than messaging and EDI support.
Open Text may well have capabilities of interest from the perspective of a B2B network as a Digital Platform that exchanges various forms of mission critical transactional or regulatory information. While this development remains somewhat a continued work-in-progress, Open Text Suite 16 provides some promising opportunities for certain industry sectors, especially business networks supporting regulated business process requirements or those struggling with expanding needs to support unique content for various online customer fulfillment channels.
This analyst will provide added details at a later date along with continued assessment commentaries related to Open Text Suite 16 and its B2B supply chain business network development and product release efforts. In the meantime, if readers have specific questions, send us an email or call.
© 2016 The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.