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Virtual Supply Networks Heighten Need for Supply Chain Visibility
The pervasive trend of outsourcing and the global nature of manufacturing in many industries have led to the creation of complex, virtual supply networks that heighten the need for supply chain visibility. The primary focus has shifted from direct control over all aspects of manufacturing and supply chain management to one of coordination of the supply chain across several tiers.
Supply management is particularly challenging in such an environment. In a static world, demand plans are handed off to supply chain management professionals who develop a corresponding supply plan that meets the demand plan in the most cost effective way. But in today's extremely dynamic world, where demand is volatile, supply disruptions are commonplace and engineering changes are coming at an accelerated pace, supply management is anything but simple.
Many supply chain management professionals lack visibility across their multi-tier, multi-enterprise supply chains, hindering their ability to manage inventory costs and effectively utilize all of their assets in response to unplanned events. Without the required supply chain visibility, supply management is helpless in today's dynamic environment. Many have also found that the supply chain visibility they are able to achieve tends to be historical in nature or insufficient to deal with the complexity of today's issues.
Bringing Supply Management into the 21st Century
Optimization-based supply chain planning systems can provide direction but not the ultimate answer. Without accurate representation of the business, it is not possible to generate an optimum. One may get close, but a small change in the assumptions or model can have a big effect on the results, especially at the detail level. The level of information required to model the business accurately is massive. More importantly, it also changes constantly. Not only does the physical structure of the supply chain — suppliers, items, locations, customers — but so do the business rules and objectives.
The answer lies in providing "enough" detail in the model that an optimization engine can get one into the region of the optimum and then have people evaluate the results in a collaborative manner in order to provide the human insight and compromise necessary to adapt to the latest business conditions and considerations.
The speed of business has increased dramatically over the past two decades when the supply chain planning solutions were first developed. At that time it was sufficient to run them once a month or once a week. The need for more frequent updates, coupled with the knowledge that the optimization does not provide an exact answer (nor is the forecast 100% accurate), leads to the requirement for a system in which people can create scenarios as and when needed to evaluate the organizations response to reality. Human judgment and compromise is used to select the "best" option amongst the scenarios.
Kinaxis™ RapidResponse™ uniquely meets the needs of today's supply management process — both in terms of developing the plan and developing rapid and profitable responses to plan deviations as they occur. RapidResponse supports supply management with solutions for
- sales and operations planning (S&OP) support,
- new product introductions,
- capacity and constraint planning,
- operations performance monitoring and alerting,
- multi-enterprise supply chain visibility,
- inventory reduction and rationalization,
- MPS planning,
- engineering change management,
- supplier collaboration,
- clear-to-build,
- lead time analysis,
- cost roll-up and
- line of balance.
Follow the link to learn more about the business value that RapidResponse delivers to your manufacturing and supply chain teams and the value to IT.
