Smart Technology Needs Smart Supply Chains

Is your supply chain keeping up with technological improvements? Do you have a weak link that is impacting your overall delivery?

APICS Milwaukee Chapter serves the supply chain community with education and information needed to compete in today’s world. Supply chain managers need to ensure that their suppliers are able to adapt and adopt new technologies.

Manufacturers have been investing in increased automation and less dependence on human intervention, especially based on the impacts of the global pandemic disrupting production and supply chains.  As stated well by IOTTechNews, “The smart revolution may be happening more rapidly in manufacturing. However, it is important for supply chains to ensure that every moving part also keeps up with digitalization. There is little value in being able to manufacture products efficiently only to fail in the handling and delivery. The whole supply chain must step up.”

What can you do to ensure your supply chain can keep the pace with technology? Gartner shared their top 8 trends supply chain technology trends for 2020 summarized below.

  1. Hyperautomation: A framework to mix and match a vast array of technologies in the best possible way, such as historic legacy platforms with recently deployed tools and planned investments. The term means different things for different organizations, so supply chain leaders must first find their individual definition. If deployed correctly, hyperautomation can encourage broader collaboration across domains and act as an integrator for disparate and siloed functions.
  2. Digital supply chain twin (DSCT): DSCT is a digital representation of the physical supply chain. It is derived from all relevant data across the supply chain and its operating environment. That makes the DSCT the basis for all local and end-to-end decision making.
  3. Continuous intelligence: One of the biggest opportunities for supply chain leaders to accelerate their organizations’ digital transformation. It leverages a computer’s ability to process data at a much faster pace than people can. Supply chain leaders — or other systems — can look at the processed data, understand what is happening and take action immediately.
  4. Supply chain governance and security: This is an increasingly important macro trend, as global risk events are on the rise and security breaches impact companies on both the digital and physical levels. “Gartner anticipates a wave of new solutions to emerge for supply chain security and governance, especially in the fields of privacy as well as cyber and data security,” Titze says. “Think advanced track-and-trace solutions, smart packaging, and next-gen RFID and NFC capabilities.”
  5. Edge computing and analytics: The rise of edge computing, where data is processed and analyzed close to its collection point, coincides with the proliferation of Internet of Things (IoT) devices. It’s the technology needed when there is a demand for low-latency processing and real-time, automated decision making.
  6. Artificial intelligence (AI): AI in supply chain consists of a toolbox of technology options that help companies understand complex content, engage in natural dialogue with people, enhance human performance and take over routine tasks. Currently, AI helps supply chain leaders solve longstanding challenges around data silos and governance. Its capabilities allow for more visibility and integration across networks of stakeholders that were previously remote or disparate.
  7. 5G Networks: Compared to its predecessors, 5G is a massive step forward with regard to data speed and processing capabilities. The ubiquitous nature of 5G boosts its potential for supply chains. For example, running a 5G network in a factory can minimize latency and enhance real-time visibility and IoT capabilities.
  8. Immersive experience: Technology such as virtual, augmented and mixed reality has the potential to radically influence the trajectory of supply chain management. Those new interaction models amplify human capabilities, and companies already see the benefits in use cases like onboarding new workers through immersive on-the-job training in a safe, realistic virtual environment.

While the world around us is always changing, it’s imperative that supply chain managers keep learning and adapting to be successful. At APICS Milwaukee, we are here to help you with the education and information needed to remain competitive.

Looking for more information to improve your supply chain, logistics and distribution efforts? Join us in October for expert led instructor classes for globally recognized certifications in in-person and virtual for CPIM Part II (Starts 10/19), CSCP (Starts 10/7) and CLTD (Starts 10/7). Learn more…

Making Supply Chains Simple – Part 1

Author: Steve Christensen, CEO – North America, b2wise

Have you wasted time and money producing a forecast or trying to optimize your supply chain?

APICS Milwaukee Chapter is excited to share this 2-part article series from Steve Christensen, CEO for b2wise in North America. Steve is a certified trainer in Demand Driven methodology and he shares his thoughts on making supply chains simple in this 2-part article series.

Part 1 – Supply Chains Are Not Linear

Supply Chains are often described in linear terms.  Step 1, then step 2 and so on.  From vendor to plant to distribution to the customer.  Each of these steps are directly observable, measurable, timed and cost.  Just ask a cost accountant.

You can draw a line through each individual step and stop along the way that your vendors and employees take to create products that fulfill your customer's demand.

Simple.  Right?  No.  It is not that simple. 

Supply chains leaders experience first-hand the seemingly infinite number of things that can, and do, go wrong.  Daily.

Rarely, if ever, is a disruption caused by just one thing. Never does that disruption cause just one more problem.  Consequently, three immutable or unchanging laws of supply chain have evolved over the past 50+ years:

  1. Service levels are always too low,
  2. inventory is always too high and
  3. the forecast is always wrong.

Call ‘Em Like You See ‘Em

You’ve been in supply chain long enough to know just how complex it can be.  There are no simple answers when the problems are complex. 

But, did you know you’ve been using a linear solution, the exact opposite of what you require, to try and solve those complex problems?

To help you see why let’s review the differences between Linear and Complex Systems.

  • Linear systems can be understood by studying the individual part; the whole is the sum of its parts.

  • Complex systems can only be understood by mapping the dependencies and interconnections.

A supply chain is more than simply the sum of its parts.  A supply chain is obviously a complex system based upon the number of vendors, employees, steps, processes, SKU's, locations, and immeasurable variables, like your fickle customers, that impact your business every single day.

If you need proof of the fact that your supply chain isn’t linear; look no further than the results you always deliver that created the 3 immutable laws referenced above.

Your Customer, Vendors and Employees are Nuts: Stable v. Dynamic

Okay, probably not nuts; but certainly not stable.  Stable customers order the exact quantity at the exact time as foretold by your super-smart forecast.  Vendors would never deviate their quantity, quality, or timeliness of deliveries to you.  Employees, and even equipment, would never change their quality or rate/throughput.  Heck, even the weather would cooperate.

We know we don’t live in that world.  So, let’s compare the predictability of linear v. complex systems.

Linear systems can achieve a stable state because they are linear and the sum of their parts.

Complex systems are dynamic and no prediction remains valid for very long; our supply chain experience at a single point in time is the existing tension between the multitude of influencing factors. 

Reference the unstable cast of characters involved in your supply chain for a refresher on why your supply chain is clearly a Complex System.  You also probably just realized the amount of time you’ve spent working with and using forecasts to Predict your stable behavior.  Now your 3 immutable results have a little bit better perspective.  Don’t they?

Pinballs and Teeter Totters

When you solve a problem, you know that a relatively small change can make a huge difference.  That’s because you are operating in a Complex System.  The output of Linear v. Complex systems is like comparing Pinball machines to Teeter Totters.

The output of a linear system is proportional to its inputs.  The harder you pull the lever back and let it spring forward the faster you are going to propel the pinball into play.

The output of nonlinear system is governed by a few critical points – the lever point phenomena.  Thanks to 3rd Century BC scientist Archimedes we have the Law of the Lever.  Here, the longer the lever the lower amount of effort required to lift the same weight.

Therefore, your supply chain is neither a chain nor a linear system and the first step in making your supply chain simpler is to align your tools and process to realize your supply chain is a Complex System.  With the proper perspective and tools you will reverse the first two laws about Service and Inventory by replacing the law that relies upon a forecast.

In part two next week, we will examine how you can know the unknowable since although you can’t predict a complex system, you can focus on actual customer demand to synchronize the behavior of your supply chain. 

Looking to learn more about supply chains and developing a simpler Demand Driven approach? Join us on September 24th for a FREE webinar on the Basics on Demand Driven Adaptive Enterprises. For additional information, contact us via our website at: http://apicsmilw.org or via email at: [email protected].

Making Supply Chains Simple – Part 2

Author: Steve Christensen, CEO – North America, b2wise

Have you struggled to optimize your supply chain due to global uncertainties and challenges due to the pandemic?

APICS Milwaukee Chapter is excited to share this 2-part article series from Steve Christensen, CEO for b2wise in North America. Steve is a certified trainer in Demand Driven methodology and he shares his thoughts on making supply chains simple in this 2-part article series. You can read Part 1 - Supply Chains are Not Linear here.


Part 2 - Knowing the Unknowable

In part one of this series, we looked at why supply chains are not linear, but are instead complex systems that can be made simpler by better alignment of your tools and processes.

This week we will look at how you can focus on actual customer demand to synchronize the behavior of your supply chain. 

In your career you have doubtlessly spent days or years engrossed in a forecast.  Either arguing for its consensus, exploring its impenetrable logic or simply reacting to its devastating effects on your service and inventory levels.  The first two immutable laws, that are in fact not immutable, rest solely on the use of a forecast to trigger your supply chains behavior. 

And amongst other reasons that a forecast is wrong is how the two types of systems attempt to predict the future or react to reality.

One example is the Gaussian statistical models that produce the normal bell-shaped distribution curve we learned about in school.  This is also how a Linear System works: the sum of the averages is a predictable model of the system and the tails of the statistical distribution are ignored as anomalies.

Paretian statistical models, the kind used in a Complex System, realize that the tails of the distribution curve are where opportunities hide.  They help identify the few critical points, or leverage, that define the relevant information/connections that predict and manage nonlinear complex systems. 

Synchronization Instead of Optimization

Just as you’ve spent/wasted days/weeks of your career in the frustrating world of a forecast, you might have also invested a lot of time and perhaps even money optimizing your supply chain.  If you thought the math behind a forecast was unknowable; try understanding how optimization math works.  It will make your mind melt.

How you improve a Linear System is completely different than how you improve a Complex System.

A linear system can be optimized.  It is a series of known steps, with a cost/time at each point, and there is ‘math’ that will tell you the optimal stocking policies you’ll need.  Ignore that it is based upon the same forecast we discussed earlier.

A nonlinear system cannot be optimized but it can continually learn and improve.  Your supply chain has been receiving constant improvement in a complex environment even though you didn’t have the tools.  You knew how to get results that were not supported or defined in any of the systems.  That’s what has made you so successful.  Your ability to think and act outside of the system.  A Complex System seeks to remain Synchronized

Conclusion

They told you your supply chain was linear and equipped you with precisely the wrong tools.  Your supply chain is neither a chain nor a linear system.

The 3 Immutable Laws of Supply Chain are not immutable; you have the power to change them. 

First, align your tools and process to realize your supply chain is a Complex System.  With the proper perspective and tools, you will reverse the first two laws about Service and Inventory by replacing the law that relies upon a forecast.

Since you can’t predict a Complex System, by focusing on actual customer demand you will Synchronize the behavior of your supply chain.  Service levels will achieve virtually 100% OTIF.  Inventory levels will plummet by 30%.  Planning will become stable for everyone in your supply chain. 

You, and your entire supply chain team and stakeholders, will suddenly reduce their stress.  By a lot.  You and your people may even report, as others have, that they can sleep better at night.

All you have to do is challenge the status quo, explore alternatives that align with the reality of your business and find a space on your desk for some company and industry awards.

Looking to learn more about supply chains and developing a simpler Demand Driven approach? Join us THIS WEEK September 24th for a FREE webinar on the Basics on Demand Driven Adaptive Enterprises. For additional information, contact us via our website at: http://apicsmilw.org or via email at: [email protected].

What is Demand Driven Material Requirements Planning?

Could you use help improving the flow of your operations and planning for needed materials at the right times? Ensuring strong connection between operations and planning is an important concern for most manufacturers. So what is Demand Driven Material Requirements Planning and how can it help?

What is Demand Driven MRP?

Invented in 2011, and supported by APICS, Demand Driven MRP is the paradigm shift.  Built upon Lean, Six Sigma and the Theory of Constraints, a Demand Driven Adaptive Enterprise no longer relies upon a forecast (always wrong!) to push inventory and cost into your supply chain anticipating demand.  Instead it aligns your actions to pull product through your supply chain driven by actual orders from customers.        

Per the Demand Driven Institute, Demand Driven Material Requirements Planning is a formal multi-echelon planning and execution method to protect and promote the flow of relevant information through the establishment and management of strategically placed decoupling point stock buffers.  DDMRP combines some of the still relevant aspects of Material Requirements Planning (MRP) and Distribution Requirements Planning (DRP) with the pull and visibility emphases found in Lean and the Theory of Constraints and the variability reduction emphasis of Six Sigma. These elements are successfully blended through key points of innovation in the DDMRP method. DDMRP is the supply order generation and management engine of a Demand Driven Operating Model (DDOM). 

Demand Driven Material Requirements Planning (DDMRP) is NOT a silver bullet.  DDMRP is based on sound flow-based principles to provide planning and execution performance improvements in variable environments where customer tolerance times are dramatically shorter than cumulative lead times (a situation that is very common today).  It is really that simple.  DDMRP is a methodology that gives people a step by step blueprint that is transparent, easy to interpret, intuitive, consistent, and sustainable. 

The FIVE COMPONENTS of DDMRP

Demand Driven Material Requirements Planning has five sequential components.  The figure below illustrates these components, their sequence and how they relate to the mantra, “position, protect and pull.”  The first three components essentially define the initial and evolving configuration of a demand driven material requirements planning model.  The final two elements define the day-to-day operation of the method.  DDMRP is most common the start of an organization's transformation to a Demand Driven Adaptive Enterprise.

How can DDMRP help?

DDMRP is a proven method across a wide array of industries. The Demand Driven Institute shares case studies across industries where companies have seen the following benefits:

  • Improved Customer Service: Users consistently achieve 97-100% on time fill rate performance

  • Lead Time Compression: Lead time reductions in excess of 80% have been achieved in several industry segments

  • Right-sizes Inventory: Typical inventory reductions of 30-45% are achieved while improving customer service

  • Lowest total supply chain cost: Costs related to expedite activity and false signals are largely eliminated (fast freight, partial ships, cross-ships, schedule break-ins)

  • Easy and Intuitive: Planners see priorities instead of constantly fighting the conflicting messages of MRP

Looking for more information on Demand Driven? Join us on September 24th for a FREE webinar on the Basics on Demand Driven Adaptive Enterprises. For additional information, contact us via our website at: http://apicsmilw.org or via email at: [email protected].

Top 10 Value Drivers for APICS & Certification

At APICS Milwaukee our mission is to serve local supply chain professionals at all levels in their careers. Recently, Tim Wild, a global supply chain executive, shared his top 10 value drivers listed below for APICS and certification. 

  1. The APICS experience makes you a better leader.

  2. The company achieves a greater ROI on your salary and function.

  3. Job experience plus and APICS certification can be as valuable as an $80,000 MBA.

  4. Makes a resume stronger. Tim always looks for APICS certifications when he’s considering resumes.

  5. Provides an opportunity to update your business card with CSCP, CPIM or CLTD acronyms.

  6. Demonstrates initiative and a person’s willingness to sacrifice personal time to differentiate themselves from others.

  7. APICS certification indicates a strong understanding of the science of supply chain.  A strong supply chain manager needs to know how things should be done to improve things that aren’t running as well as they should.

  8. APICS academics, classroom or cohort networking and getting “out of the office” provide good balance against the organization dynamics and stresses at work. APICS curriculum and content provide context and perspective for the things we do in supply chain and why we do them.

  9. An APICS certification demonstrates you have bandwidth and potential beyond what folks see in meetings or while you are working at your desk.

  10. In terms of a Power Base, an APICS certification provides “a legitimate power base” because you are viewed as a subject matter expert.  This can strengthen your influencing skills and ability to drive change and get things done.

Hear from Tim directly in the recent webinar recording below on the value of APICS education and membership. You'll also hear from our chapter leaders and APICS instructors. 

Looking to advance your supply chain career in 2020! Time is running out to sign up for our Fall classes starting next week with expert instructor-led support to help you earn an APICS certification in 2020. Milwaukee area classes are available for in-person and VIRTUAL for CPIM (starts 9/10), CSCP (Starts 10/7) and CLTD (Starts 10/7).  LEARN MORE…