Author Archives: Tim Gray

Supply Chain Insights – Lora Cecere

I have always been impressed with Lora’s foresight. Her initiative to bring together a group of industry experts to test the impact of new smart technology is not something that anyone can easily pull off. And her willingness to share her learning openly is truly a rare find. Supply Chain Insights has moved beyond their competition. Lora is not just an Analyst content to observe, she and her company are being active in shaping the future of supply chain.

The next Global Supply Chain Insight Summit 2018 will be held in Philadelphia, PA on September 4-7, 2018. You can find out more at:

2018 Summit Agenda

Tim Gray

I have always been impressed with Lora's foresight. Her initiative to bring together a group of industry experts to test the impact of new smart technology is not something that anyone can easily pull off. And her willingness to share her learning openly is truly a rare find. Supply Chain [...] Read More...

Interoperability: Achilles Heel or the Special Sauce

Everyone from supply chain to healthcare is talking about Interoperability, or the ability of information systems to work together within and across organizational boundaries, by enabling different information technology systems, and software applications to communicate, exchange data, and use the information that has been exchanged.

“The dream is to have interoperability between networks. Why is it needed? Business leaders now manage a value chain, not a simple supply chain within their four walls. They need interoperability between networks and technology applications. They know that a traditional focus on standards and integration does not work.

The elephant in the room is interoperability. There is friction in the process of data exchange. Investments in ERP are not the answer.” ~ Lora Cecere, Founder of Supply Chain Insights

Interoperability, one of the most difficult and pressing challenges and opportunities as Lora Cecere pointed out. It can be the Achilles heel that prevents progress or can be the special sauce that will enable the hype to deliver value digital revolution / Industry 4.0

“But because data is arriving from many different sources — suppliers, transporters, warehouses, distributors — quality and interoperability of the data is critical, and still a significant technological barrier that a wide range of companies are working on.” ~ PwC

Our industry’s traditional culture is competition, not collaboration. There exist a host of reasons why implementing network interoperability successfully is considered difficult.  Lack of consistent data standards, system incompatibility, to the cost perspective, designing the network architecture for interoperability implies the willingness to accept the complex set of benefits and associated liabilities. And the market and regulators are far from starting any work on it. Although significant strides have been made to support interoperability, the widespread adoption of standards to date has been slow, due to the challenging complexity and the fact that many of the legacy business models are based on closed systems and data capture rather than open digital ecosystems.

“Adding to the challenge is the disincentive today’s technology “giants” (e.g. Google, Apple, Microsoft, IBM, etc.) have to create interoperability, in which open standards undermine the competitive advantage(s) they are each trying to create. Each of these companies has big dollars and big plans supporting their individual, proprietary operating systems, equipment, and protocols. To build bridges (standards) with other systems inherently lessens their differentiation.”

This challenge is underscored because those companies in whom consumers are already invested are likely to maintain their walled gardens. “We have an Apple Internet of Things and a Google Internet of Things,” explains Rachel Kalmar, Data Scientist at Misfit Wearables. Instead of opening infrastructure horizontally, the giants are only contributing to its fragmentation by creating vertical stacks of integrated products.

“The vision is that connectivity between people, processes, and things works no matter what screen type, browser, or hardware is used. The reality, however, is that the IoT is fragmented and lacks interoperability; disparate or overlapping solutions can’t easily “talk” (connect) to each other.”

“Visibility as a topic is confusing. Technology vendors have conflicting definitions. The current state is pretty Powerpoints with hollow words bandied about in sales cycles. It is messy. As shown in Figure 1, currently there are large gaps for the line-of-business user. Despite the advancements in B:C processes, we have made little progress in the advancement of B:B processes. Most hang on the back of 40-year old Electronic Data Interchange (EDI) processes.”

For the industry, the larger elephant is “What is the Return on Investment?” While companies know that they need to conquer this hurdle, they are hamstrung. Process innovation with new technologies is hamstrung by the need to show a definitive ROI.” Lora Cecere, Founder of Supply Chain Insights

Take the healthcare industry’s interoperability challenge as an example. “You’ve got Fitbit, Apple Watch, all of this consumer tech collecting data on your blood pressure, heart rate, etc,” said Forde. “Then you go to the hospital or your doctor and they have their own system. You see the allergist and they’ve got their own system, and none of it is connected. If there’s no interoperability between any of these systems, how are you going to get the best possible care?”

Reducing barriers to information flow would benefit not only consumers but also other actors in the supply chain, such as producers, retailers, distributors, and certifiers. Well-known benefits include, for example, reductions of costs of coordination and increased flexibility (Clemons & Row, 1993).

Everyone is talking about how to realize Industry 4.0. We have got blockchain, IoT, cloud computing, all of these very promising smart technologies, yet we have the challenge with interoperability and it will only grow as the latest smart technologies generate significantly more data from a wider variety of sources.  How can we begin on the path towards interoperability? As Brian Tessier mentioned at the conference, the good news is that more and more companies and products are beginning to emerge that enable interoperability through open-source development.

“Overcoming the challenge of interoperability may be the single most important hurdle for Industry 4.0, as it is what enables the boundless connections of a connected world. More and more companies and products are beginning to emerge that enable interoperability through open-source development.”

As the challenges of interoperability finally seem to be fully understood, the huge gap between plans and reality in this field is also recognized. A major shift in organization practice and structure will require. I think we should stop talking about it and actually start achieving it.

What are your thoughts on interoperability ? Any comments gladly appreciated.

Tim Gray

Everyone from supply chain to healthcare is talking about Interoperability, or the ability of information systems to work together within and across organizational boundaries, by enabling different information technology systems, and software applications to communicate, exchange data, and use the information that has been exchanged. “The dream is to have [...] Read More...

Blockchain: The Great Paradigm Shift

During The 2017 Supply Chain Insights “Imagine Supply Chain 2030 Global Summit”

I found myself surprised and confused by a topic I felt I had a strong handle on. Having sponsored my own company’s R&D efforts in blockchain I thought I have a deep and clear understanding of how this technology would mature and become demanded by our client’s clients.

I nearly fell over when Brian Tessier (Schneider Electric) began explaining their pilot to use blockchain to manage the process of onboarding new business partners.

I began mental flailing … “Why would you do that” … “Surely that’s the wrong tool for the job” … “What do they know that I don’t?”… By the end of the summit, it was clear to me that I needed to reframe my expectations around blockchain.

Blockchain, we have all heard about it, so what are its use cases, and what it means for you?

When people describe blockchain as open ledgers, or distributed ledgers, it reminds me of when people used to refer to the internet as the world wide web or information super highway, but in relation to blockchain. Blockchain is the underlying technology behind all cryptocurrencies like bitcoin and ethereum, but it’s much broader than that. It has a potential of changing the way we work and communicate, making it more secure, efficient, and trustworthy.

 

 

“Why the future is blockchain? So what are blockchain’s main advantages? By performing the functions of record keepers and managers it would enhance decentralisation, reduce the amount of intermediaries involved and provide an alternative to how value can be stored. Physical as well as digital assets could be uniquely verified online to prove ownership.

As transactions stored on the blockchain could be independently verified and traced, it would be easier to fight crime, counterfeiting and fraud, reducing systemic risk in the financial system. A distributed digital ledger would make it near impossible to change or falsify data, because data would have to be altered across all the related “blocks” in the digital chain, so any tampering would be exposed. Consequently associated costs would fall, enhancing economic growth and prosperity.“ ~ The Conversation

 

 

“Although there are multiple competing standards, the good news is for the most part the distribution of the blockchain mechanism, as far as the individual packages, most of them are underpin by open source code that lived against relatively similar frameworks. They are going to be crossed compatible. This technology is so fluid, everybody could get started developing in this platform tomorrow….. You can shape the future of this platform, we stand right now for what can potentially be the next internet, so I strongly recommend you and your businesses to grab the wheel and get in…..” ~ Brian Tessier, VP of Innovation, Schneider Electric

 

 

Where are we now? In 2016, Lora Cecera facilitated a workgroup to design and test new approaches, including testing of new technologies like cognitive computing, blockchain, open source analytics, and the Internet of Things. She shared her learning summarized in four main points 1) Hard to Get the Right People to the Table, 2) Detours/Potholes and Spiraled Learning, 3) Trust Coupled with Big and Hairy Data, and 4) Need for Ongoing Education. I couldn’t agree more with the fourth point as we need to adapt to the paradigm shift.

“One of the biggest benefits for the members of this group is learning and ideation on next-generation supply chain processes. It has been fun to facilitate this learning. To spice up the discussion, I brought the smartest technologists to the table to share insights on Open Source analytics, blockchain, IOT and cognitive computing. All of these technologies are moving at fast speeds with overhyped promises. To grasp the potential impact requires a paradigm shift in thinking. Supply chain teams used to thinking in batch processes, with fixed hierarchical representations using relational database models, need to change. The world of schema on read, blockchain, cryptocurrency, rules-based ontologies, streaming data architectures and cognitive computing is all new.” ~ Lora Cecere, Founder of Supply Chain Insights

 

Shift in Paradigms: Lora Cecere, Founder of Supply Chain Insights

 

At Prophit Systems, our research with blockchains and pilot work with the Australian Government, CSIRO’s Data61 has been valuable and tangible. We have been trialing using blockchains to provide proof of sourced materials. As materials are consumed and converted we are providing metadata around the usage, yield and process conditions that were applied during processing to associate the consumed material with the converted product and its new blockchain. The blockchain ledger can then confirm the origin of materials that were consumed in the transformed material.

Being immutable this ledger system offers a positive method to confirm the origin of materials, processes, and services that have been used in the provision of products.

What are your thoughts on blockchain? Any comments gladly appreciated.

Tim Gray

Prophit Systems

During The 2017 Supply Chain Insights “Imagine Supply Chain 2030 Global Summit” I found myself surprised and confused by a topic I felt I had a strong handle on. Having sponsored my own company’s R&D efforts in blockchain I thought I have a deep and clear understanding of how this [...] Read More...

Impact of Additive Manufacturing

At the Lora Cecere’s Supply Chain Global Submit 2017, the session on Additive Manufacturing had particularly grasped my attention. I don’t think anybody questions the fact that 3D printing has done and continues to do amazing things. The questions being asked now are about how we can continue to push the possibilities forward. Additive Manufacturing and Material Science are maturing very rapidly, and will transform the manufacturing industry.

“Additive manufacturing is a rapidly-expanding field and a national strategic priority in many countries in Europe and North America. “As an emerging manufacturing process, it is a disruptive technology that will both complement many traditional manufacturing techniques, and become a major technique in the future, enabling new business models, products and supply chains to flourish,” Dr Xiaopeng Li, Lecturer, UNSW

 

 

Technology companies can provide an array of options to help manufacturers explore broader use beyond rapid prototyping and invest in the next generation of AM technologies, such as hybrid printing, multi-material, multicolored fabrication techniques and touch based user interfaces. Options range from the scanning of physical objects to modeling, designing and slicing software to the materials and printers themselves.

“adidas and Carbon are creating the next breakthrough in athletic footwear, leveraging Carbon’s Digital Light Synthesis technology to bring a new product and platform to life: Futurecraft 4D. Together, we are developing the first mass production process that makes previously impossible midsole geometries with revolutionary 3D printable materials, paving the way for custom, high performance shoes that meet the unique needs of each customer.” ~ carbon3d.com/stories/adidas

 

 

According to Carbon, Digital Light Synthesis is a breakthrough process that uses digital light projection, oxygen-permeable optics, and programmable liquid resins to generate durable products, and the Futurecraft 4D is adidas’ first application of that technology onto a shoe. By the end of 2018, adidas plans on producing more than 100,000 pairs of of shoes using Digital Light Synthesis technology, a technology pioneered by Carbon.

“Carbon’s programmable liquid resin platform uses light to create the shape of the sole, then uses heat to set it, allowing the team to create a print from scratch. In addition to saving on cost, the method also significantly reduced manual post-processing steps of traditional manufacturing. Carbon was able to develop an elastic material for the Futurecraft 4D midsole, which is stiff but resilient, creating a high-performance midsole with optimum energy return.”

 

 

“The Carbon-adidas collaboration made ten times as many iterations possible! Further, each iteration was produced with the same process and material as the ultimate product. These were not just prototypes for assessing a design’s visual appeal: We could actually test midsole performance in the design stage. In other words, Carbon’s technology makes prototyping obsolete. Gone are the days when it was necessary to prototype a product using a technology that does not allow for scale-up.” ~ Carbon

 

 

“Fully-automated 3D printing will revolutionize industrial manufacturing over the next five years. This is also reflected in figures. By the year 2030, an annual growth rate of about 20 percent is predicted for the market. This represents an increase from currently 4.1 to about 40 billion US dollars – but the biggest growth comes from production, not prototyping. Looking at the trend curve for a new technology according to the Gartner Inc. model, industrial AM will have reached its production plateau in about two to five years.”~ RENÉ GURKA, bigrep

 

 

Additive manufacturing means a greatly simplified, highly responsive, and infinitely flexible supply chain fulfills the order. The demand economy is disrupting every sector and when paired with the advent of additive manufacturing, is a true game changer for the manufacturing industry. It should be a warning sign for companies that if they don’t innovates their supply chains, they may become irrelevant as consumers will have more control of the production of their own products.

 

Source: Strategy & Analysis

 

Prophit Systems’ Multi-Echelon Inventory optimization tool “Prophit AutoStock” includes automated predictive algorithms to forecast your future requirements. Our expert algorithms identify products that should be re-categorized, allowing quick and intuitive management of all products at all warehouses, and on demand. All inventories are visible by location, cost, days cover, selling units and storage units for current and future periods. We are all prepared for the future of additive manufacturing.

What are your thoughts on Additive Manufacturing? Any comments gladly appreciated.

Tim Gray Prophit Systems

At the Lora Cecere's Supply Chain Global Submit 2017, the session on Additive Manufacturing had particularly grasped my attention. I don’t think anybody questions the fact that 3D printing has done and continues to do amazing things. The questions being asked now are about how we can continue to push [...] Read More...

Impact of New Generation Robots

I was stunned when I first met the collaborative Robot Sawyer at the Imagine 2030 Supply Chain Insights Summit in September this year.  All I could think was how many jobs will these guys take.  The list of features is awesome but for me the three pivotal features were

  1. Sawyer doesn’t need to be programmed to do a task, you show it.
  2. Sawyer can safely operate alongside human workers, without light curtains or guard rails
  3. I was expecting Sawyer to cost $300K.  I was shocked to find that he starts at $29K

Together with Sawyer’s big brother Baxter, these bad boys are set to make a real difference in production, giving manufacturing companies a very competitive advantage.

 

 

Tractica anticipates the global robotics industry is expected to surpass US 151 billion by 2020, annual robot unit shipments will increase from 8.8 million in 2015 to 61.4 million by 2020, with more than half the volume in that year coming from consumer robots.

 

 

In 1961, General Motors unveiled Unimate, a robot that was designed to ease the production process; this was a 4000-pound robot and harbingered the use of robotics in manufacturing (Pugh, 2013). However, technological advancements and evolution of artificial intelligence and its use in embedded systems have enabled organizations to adopt and use robots in various stages of the manufacturing process (Sachs, Benzell, & LaGarda, 2015). Robots are now faster, cheaper, and moreintelligent because of the amalgamation of nanotechnology and artificial intelligence.

In its report, PricewaterhouseCoopers observed that in the last decade or so, the orders for robots globally has increased by more than 200 percent, with one of the key markets being the United States and Canada. The report also indicates that the number of registered patents for robotics related patents grew past the 5000 mark in 2013 from 1000 patents in 2001. This trend demonstrates an increased uptake and use of robots in the manufacturing process. Consequently, it is important to establish the effect that this increased focus on the use of robotics in the manufacturing process has had in the industry.

 

 

With the emergence of more intelligent and cheaper robots, manufacturers have diversified their application of robots in the manufacturing process. Whereas in the past robots were limited to the most basic and menial tasks, the new robots are being increasingly used in more specialized manufacturing processes (Pugh, 2013). The amalgamation of nanotechnology, robotics, and artificial intelligence has seen the application of robots in tasks that require precision which in some instances even a human being cannot handle. For example, Carlsson (2012) observed that robots are increasingly being used in pharmaceuticals and biomedical technological manufacturing firms, where the manufacturing process requires precision and the automation of the processes has enabled firms in the industry to achieve the same. In addition, the emergence of more intelligent and dexterous robots has fostered human-robots collaboration in the manufacturing process, where robots and human being work together in the production process; robots are now socially sensitive, have near human capabilities, and can, therefore, interact with human beings (Baily, Manyika, & Gupta, 2013).

Further, the emergence of the new generation robots has resulted in cost savings in the manufacturing sector. The new generation robots are cheap to maintain and will work shifts that would have normally been handled by multiple employees, resulting in the cost of labor savings. In addition, whereas human beings are likely to miss work because of various reasons, there is no likelihood of absenteeism where robots are concerned, unless when undergoing maintenance (Pugh, 2013). Other proponents of automation or uses of robots argue that coupled with their low maintenance cost, robots present an opportunity to manage costs of doing business for manufacturers who otherwise, would have had to incur expenses such as health insurance cover, salaries and remuneration, and other personnel related costs (Carlsson, 2012).

 

 

On the other hand, robotics presents an opportunity for further growth of a previously declining manufacturing sector. Baily et al. (2013) observed that the current resurgence of the United States manufacturing sector is attributable to technological advancements such as the developments in robotics. The primary reason as to why companies outsourced manufacturing jobs to other parts of the World such as China was that labor was cheaper in those countries. Yet China is investing heavily in robotics firms around the world, while also developing and manufacturing its own robots in a government-backed, robot-driven industrial revolution. Chinese companies are going through enormous efforts and invest large amounts of capital to automate their production and shed the dependence on “cheap labor,” which is getting increasingly expensive and uncompetitive with other “cheap labor” economies. (Wolf Richter, 2016).

The sharp falls in the price of industrial robots and a steady increase in their capabilities each year, robotic automation is equalizing manufacture costs anywhere in the world against the cost of human labor. With the calling for bringing back the jobs, this could pretty much be the key. Robotic automation can, however, give the necessary leverage to high-cost countries to bring back their outsourced manufacturing. Thoughtful and clever implementation will be needed, and the timing is crucially important, and the time is …… NOW!

So what are your thoughts on robotic automation and bringing the jobs back? Any comments gladly appreciated.

Tim Gray

PROPHIT SYSTEMS

~

References

Baily, M. N., Manyika, J., & Gupta, S. (2013). US productivity growth: An optimistic perspective. International Productivity Monitor, (25), 3.

Carlsson, B. (Ed.). (2012). Technological systems and economic performance: the case of factory automation (Vol. 5). Springer Science & Business Media.

PricewaterhouseCoopers. (2014, September 9). The rise of robots. Retrieved November 17, 2016, from http://www.pwc.com/us/en/industrial-products/next-manufacturing/robotics-rise-of-robots.html

Pugh, A. (Ed.). (2013). Robot vision. Springer Science & Business Media.

Sachs, J. D., Benzell, S. G., & LaGarda, G. (2015). Robots: Curse or blessing? A basic framework (No. w21091). National Bureau of Economic Research.

Wolf Richter (2016) Why China’s Multi-Decade Manufacturing Miracle is Over

I was stunned when I first met the collaborative Robot Sawyer at the Imagine 2030 Supply Chain Insights Summit in September this year.  All I could think was how many jobs will these guys take.  The list of features is awesome but for me the three pivotal features were Sawyer […]

Read More...

Please Fasten Your Seat Belts! Ladies, Gentlemen, and Hal.

I was snapped into awareness, as I digested the following numbers

 

Let me interpret this in a different way, you could take a driver-less taxi to and from work all week for what it costs you in a single trip today.

 

Do I think driver-less vehicles are set to disrupt and reshape the way we live?  You bet I do.

The Impact of Driver-Less Vehicles in the Logistic Industry

The supply chain industry is advancing at tremendously high speed, are you able to adapt to new changes fast enough, and adopt the contemporary trends should you want to stay afloat.

At the Imagine the Supply Chain of 2030 Global Summit, the keynote address on “Embracing the Autonomous Supply Chain and Rethinking Innovation” resonates with my view about the future. The Age of Autonomous vehicle is emerging, and it is disruptive. The economic and social impact is huge, and beyond the scope of this article. Industries are affected or will be affected. Whether it will be good or bad is yet to be seen.

 

In recent news, “Tesla to enter the semi truck business, starting with ‘Tesla Semi’ set to be unveiled next year”

“Uber acquired self-driving lorry startup Otto this summer in a deal worth up to $680 million and it plans to put the company to work next year.”

“Otto’s technology allows existing trucks to be ‘retrofitted’ with self-driving technology which can handle driving on U.S. highways. It doesn’t entirely automate the process since human drivers are needed to negotiating coming on and off highways, but the technology may enable drivers to rest more and make their deliveries faster in the future.”

Although the technology remains under development, the first attempts already being tested out. It might not be long before we start getting our deliveries from a vehicle without a driver. Are you prepared to adapt to new changes fast enough, and has the ability to adopt the contemporary trends should you want to stay afloat. Is it time to start thinking about a new business model?

Key Benefits of Driver-Less Vehicles

In 2014, DHL Trend Research has launched a report on “Self-Driving Vehicles in Logistics”, which provides DHL’s perspective on implications, highlighting the key elements and the potential of autonomous technologies.

A few key benefits from autonomous driving outlined by the report:

Improved Safety: Minimize human error to reduce road traffic accident.

Higher Efficiency: Traffic flows faster with vehicle to vehicle communication. Freight trucks will be able to travel 24/7 without requiring driver rest time.

Lower Environmental Impact: With fewer vehicles on the road and more efficient fuel consumption, autonomous systems are programmed to minimize environmental impact.

Greater comfort: The driver becomes a passenger. He or she doesn’t have to watch the road ahead but can rest and enjoy other activities.

 

According to the report, “It’s the next evolutionary step to start applying this technology to outside premises and on public streets. Beyond warehousing operations, analysts expect many more applications in future along the entire supply chain, particularly in outdoor logistics operations, line haul transportation, and last-mile delivery (DHL Trend Research, 2014)”.

 

However, as the report explains, autonomous technologies still have some way to go before reaching full maturity. Considerable catching up is also required regarding regulations, public acceptance, and issues of liability. Despite these barriers, some compelling use cases have already emerged, clearly indicating that many organizations are willing to develop and deploy self-driving technologies.

OK, SO what does this mean for us?

As far as I can see the immediate impact for many of my clients will be the need to reassess their network design. I wouldn’t be advocating taking long term leases on Distribution centers (DCs) or setting up chains of highway diners. As driverless trucks come on line, the cost balance will shift to more frequent deliveries and less double handling. This may well trigger a revitalization of manufacturing hubs, with individual plants being able to economically service much larger catchments, without a complex and costly distributed warehouse network.

What’s Next?

Supply chain leaders should always embrace innovation and be prepared. We all understand the importance of having robust and evolvable systems that can be easily adapted to accommodate any future disruptions. The question is what you are planning to do about it today.

What are your thoughts on this? Any comments gladly appreciated.

Tim Gray

Prophit Systems

Reference

Self-Driving Vehicles – The road to the future? (2014, DHL Trend Research): http://www.dhl.com/en/about_us/logistics_insights/dhl_trend_research/self_driving_vehicles.html
Uber Wants Your Long Haul Trucking Business (2016, September):http://www.supplychain247.com/article/uber_wants_your_long_haul_trucking_business/Autonomous_Vehicles
Proudly Brewed. Self-Driven (2016, October):https://blog.ot.to/proudly-brewed-self-driven-95268c520ba4#.jlia9f2s8

I was snapped into awareness, as I digested the following numbers   Let me interpret this in a different way, you could take a driver-less taxi to and from work all week for what it costs you in a single trip today.   Do I think driver-less vehicles are set […]

Read More...

Finding SCM Talents in 2017 and Beyond

In September 2016, I was lucky enough to attend Lora Cecere’s (founder of Supply Chain Insights) Imagine the Supply Chain of 2030 Global Summit. I found the conference extremely insightful and wanted to share with you some of my key takeaways from the event. This is the first article in a four part series to be published in the coming weeks, “Incubate your own talents”.

Talent shortage in the supply chain industry is a known issue, especially with the demand for middle management positions. The rapid expansion and increasing complexity of the industry, the qualifications needed for supply chain professionals are expanding.   The industry does not have enough qualified people making invaluable decisions.

 

talent_shortage

 

Great talent lies within every company waiting to be discovered and developed. But most of us tend to ignore this fact, or perhaps lack the sheer knowledge of it. We look outside whenever there is a need for specific skills in the organization.  As a proactive business in the supply chain management industry, you should identify and cultivate talent within the existing talent pool. Sourcing internally is better than looking outside for several reasons.

 

talent_problems

 

Improved employee morale and engagement

Employee engagement plays a major role in the success of an organization. Employees who are involved in development opportunities feel a sense of belonging and appreciation.  It’s a sign that you care about their personal and career development goals, and this, in turn, creates morale, motivation and greater job satisfaction in your workforce (Gill, 2014).

Boosts employee performance

Employees with opportunities for career advancement strive to achieve something more valuable and meaningful than their day-to-day work. Developing talents internally enables employees to have a more well-rounded skill set, which help enhances their performance. They become motivated, inspired and equipped to train other people around them.

Decreased employee turnover

Many companies in the supply chain management industry may see internal talent development as a gamble. If an employee resigns, the investment is watered down, and he could potentially move to a competitor. This is a mere misconception. The truth of the matter is that talent development is essential in the retention of employees. In fact, it’s a proven retention strategy that is adapted by successful companies in the industry. Employees who are appreciated and inspired are more likely to stay loyal to your company, reducing turnover as well as the direct and indirect costs that come along with it (Wilson, 2016).

Reduced hustle and cost of hiring new employees

Internal recruitment is obviously less expensive and less time consuming compared to external recruitment. It is not unusual for an external hiring process to take two months or more from the time you advertise the job to the first day at work. And the processes in between this period – interviewing and short listing candidates – are mind-numbing. Finding a candidate internally, whether to fill a new position or to backfill a position, does not require such extensive amount of effort and time.

Guaranteed success

Employees who are progressively trained and promoted into new roles are likely to achieve greater success than their external counterparts. Of course, the internal recruits will have better knowledge of internal systems and company values enabling him to take less time in settling in the new position.

Adopting a culture of developing talent within your company, rather than outside, is a great way to leverage the output of your employees, boost their morale and amplifies their loyalty. You skip you the rigorous process of recruitment and are rest assured of success in the new role assumed. It’s an investment with a definite ROI.

 

 

References

Supply Chain Insights LLC, Supply Chain Talent (2014, June – October)

Supply Chain Insights LLC, Global Summit Survey 2016 (2014, August)

Gill, A. (2014, November 3). Human Resources. Retrieved November 14, 2016, from The top 10 Benefits of Ongoing Staff Traiing and Development: http://www.saxonsgroup.com.au/blog/human-resources/top-10-benefits-of-ongoing-staff-training-development/

Wilson, T. (2016, May 18). Talent Space. Retrieved November 14, 2016, from The Benefits of Cost Effective Talent Development: http://www.halogensoftware.com/blog/the-benefits-of-cost-effective-talent-development

In September 2016, I was lucky enough to attend Lora Cecere’s (founder of Supply Chain Insights) Imagine the Supply Chain of 2030 Global Summit. I found the conference extremely insightful and wanted to share with you some of my key takeaways from the event. This is the first article in […]

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PROPHIT SYSTEMS ANNOUNCES U.S. LAUNCH

PRESS RELEASE

APAC Supply Chain Solutions Leader PROPHIT SYSTEMS ANNOUNCES U.S. LAUNCH

Prophit® Systems Pty Ltd the innovative leader of Supply Chain Software that makes complex supply chains simple, officially opens for business in the United States. First stop Atlanta.

 

 

 

Prophit® Systems – Atlanta

3333 Piedmont Road,
Suite 2050
Atlanta, GA 30305

PROPHIT SYSTEMS to help SMBs Simplify, Automate and Optimize Supply Chains

Prophit® Systems is thrilled to bring its proven solutions that help manufacturers improve supply chain visibility, streamline the S&OP process and ultimately increase profits to the U.S. market.
“Our success through APAC has been founded on our belief that our systems must simplify and amplify our customers planning process. The speed with which we implement our skin in the game approach and the profound, tangible business value each of our projects deliver has redefined the Supply Chain planning space in APAC.
We are delighted at the demand for our products and services here in the U.S. We are seeing deep interest from the mid-market manufacturers whom have been looking for a solution provider that they can trust to work with them to deliver outstanding results immediately. “ Tim Gray, Managing Director, Prophit Systems.
Prophit® Systems has been actively working behind the scenes for some time, with U.S. subsidiaries and their APAC suppliers, talking to market participants and collaborating with international partners. The company’s exceptional reputation has already gained the attention of the U.S. market, particularly within specific industries such as the Packaging Manufacturing, Dairy Processing and CPG manufacturing.
Leading manufacturers such as Amcor, Visy / Pratt Industries and Browns Dairy (formerly Fonterra) use Prophit® Systems for Forecasting, Capacity Planning, network optimization, inventory optimization, Scheduling, Sequencing, replenishment optimization and shop floor control.
Our commitment to the U.S. market is steadfast and further expansion plans are already underway with more Prophit® Systems locations within the next year.
The launch of the Prophit® Systems Atlanta branch follows the decisive investment into their global expansion strategy. The China Office was launched in early 2015 and we have established implementation partners to distribute Prophit® in Europe. The growth of Prophit® Systems international operations, particularly within the North American region has gained attention and is already being championed by local clients within the United States with significant strategic partner arrangements being confirmed.

ABOUT PROPHIT SYSTEMS – www.ProphitSystems.com
Prophit® Systems is an international Supply Chain software and consulting company headquartered in Sydney Australia. It provides “best of breed” supply chain software to manufacturers with highly complicated supply chain processes. With over two decades experience in the Supply Chain and manufacturing industry, Prophit® Systems consistently delivers a 100% ROI in under 12 months from implementation. The product range is designed to optimize all aspects of an organization’s supply chain and to allow them to fully capitalize on their ERP investment. Prophit® Systems is already the largest supply chain software provider within the APAC region and plans to also become one of the top providers within the North American market.

PRESS RELEASE APAC Supply Chain Solutions Leader PROPHIT SYSTEMS ANNOUNCES U.S. LAUNCH Prophit® Systems Pty Ltd the innovative leader of Supply Chain Software that makes complex supply chains simple, officially opens for business in the United States. First stop Atlanta.       Prophit® Systems – Atlanta 3333 Piedmont Road, […]

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Supply Chain Forecasting “Playbook”

The New Year brings a time of reflection.
Dominos
It’s a common time to review how you are tracking to budget and how you see the next twelve months are panning out. Professional sports teams develop set plays that detail. When A happens we respond with B. These teams assembly all their set plays into “playbooks”. These playbooks are learned by all members of the team so that in a split second all players in the team can respond in a coordinated fashion, often with decisive outcomes.

Agile businesses are doing the same. They are using their planning processes to predict what might happen and prepare the set plays specific to their business.

Two recent examples of set plays we’ve been involved in:
1. A customer is running promotions of certain products without giving us the desired notice. They are responding to their competitors promotions. What can we do to support their un-forecast promotional activities?
2. If customer A is successful in acquiring customer B, they will expect improved pricing. How will we respond to their requests. What will be the full impact on our business?

Developing a playbook for the year ahead is not as hard as it seems. In practice this becomes a working document. The exciting outcome of this approach is it can drag your management team’s focus from what happened yesterday, to navigating and side stepping pending issues before they became a crisis.

Step 1.
If you take the time to confirm your best estimate sales forecast, zone in on those products and customers that are performing above forecast and those that are underperforming.
Identify the major risks and the opportunities around these forecasts.
Develop a high and a low range forecast based on a number of these risks and opportunities playing out.
Step 2.
Develop action plans to address the risks and seize the opportunities as they arise.
Step 3.
Phase the action plans according to Go – No Go criteria. These became your set plays.
Empower your staff with these set plays. If these conditions occur, invoke these actions. Then let me know you have done them.
Step 4.
Review monthly, see how your sales are tracking to forecast, review your best estimate, and see how it is tracking. Determine if your corrective actions / set plays are still current and still adequate.

Successful Supply Chain’s require simply but savvy forecasting methodologies with the right collective mind set.

The New Year brings a time of reflection. It’s a common time to review how you are tracking to budget and how you see the next twelve months are panning out. Professional sports teams develop set plays that detail. When A happens we respond with B. These teams assembly all […]

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Statistical modelling and supply chain forecasting

When I was first getting started in this business a good friend and colleague who knows a thing or two about statistical modelling advised me; “you must understand your demand before you try to fit a statistical model to it”. This advice has served our team well over the years.

A number of statistical supply chain forecasting tools advocate that they will automatically forecast your demand for you. This is a very enticing sales pitch; it implies that the software will do all the work for you. But before you turn your back on the task of forecasting and leave the software to do its thing, a word of caution:

  • Statistics are a great tool for summarising and projecting subtle trends in market demand when there is continual sales history;
  • Statistical tools are poor at predicting demand when the demand is lumpy with periods of no sales. (Examples: Project work, promotions etc.); and
  • Statistics will not predict abrupt changes to demand such as a customer changing their artwork, or a customer moving production of a particular range of products offshore. By the time your statistical model is responding, your warehouse could already be full of items that particular customer will no longer take!

Scenario

One of our packaging clients had invested in a supply chain forecasting software solution that ‘automatically’ adjusted its forecast algorithms to seek the best fit. The sales team were delighted. They no longer had to spend their time creating forecasts. They no longer needed to talk to the customer about emerging trends or understanding the reasons for errors in previous forecasts. They now had more time to go out and sell more product.

Upon reviewing the plant performance, we found that there had been a significant increase in obsolete stock and key customer DIFOT was below expected levels.

When we attended the demand review the dynamic was interesting. Corrective actions that were assigned to resolve the stock outs, all focused on improving the statistics. Corrective actions to resolve slow moving and obsolete stock resulted in requests for the statistical algorithms to be tweaked. The business was allocating all responsibility for correct forecasts onto the systems statistical algorithms.

When we reviewed the new business, we found that sales had remained static. Some new customers had come on, but new sales to existing customers had declined. Perhaps lack of communication with existing customers was affecting repeat business.

Quick Fix

We continued the use of statistics, but we passed the ownership back to the key account managers.
Specifically we provided a portal where the account managers could adopt the statistical forecasts, or they could override them where they knew the statics were not correct, either way they had to choose the forecast they wanted. The ownership for slow moving and obsolete stock (SLOB) was again pushed back onto the account managers.

We coached the sales staff in conducting Business Review and Development (BRAD) reviews with their key customers to understand sales trends and prepare for future sales opportunities. These meetings were scheduled regularly for key accounts.

Information about pending artwork changes and promotions and other business changes that were identified from these BRAD reviews were utilised by the key account managers to override or correct the statistical forecasts as required.

SLOB dramatically reduced by adjusting the forecasts for known changes in products and lost work.

With increased customer contact, new business from existing customers increased.

The statistical tools continue to give a source of information to the key account managers , but responsibility is now on the account managers themselves to determine if it is correct.

Top TIPS

  • Forecasting should be owned by those who face the customers;
  • Statistics are of great assistance, if you understand their limitations; and
  • Sales can use forecasts to periodically talk to their customers. This builds market intelligence and seeds customer loyalty.

Tim Gray is a supply chain industry commentator and advises several businesses across APAC on supply chain systems. He is the managing director at Prophit Systems.

When I was first getting started in this business a good friend and colleague who knows a thing or two about statistical modelling advised me; “you must understand your demand before you try to fit a statistical model to it”. This advice has served our team well over the years. A number […]

Read More...