Category archives: Optimization
Sales and Operations Planning has become a standard process to improve business performance, collaboration and predictability. In fact, it’s become internalized to a degree that companies often have several (competing) S&OP processes in different geographies & business units. Why is it that despite its popularity, only 42% of companies rate their S&OP process as effective?
The food supply chain is complex and challenging. Changing consumer preferences, rising competition and new technologies are compelling food companies to rethink their approach to supply chain management. AIMMS formed a partnership with CAT Squared and UniSoma to help companies in the food industry tackle these challenges. The first product of this partnership is TacticalOps, a Planning & Optimization solution for Food Manufacturers. I spoke with Luis Pinto, Partner at UniSoma, to understand the need for new planning and optimization solutions in the global food supply chain.
KFC, a fast food favorite, made headlines last month for suffering a chicken shortage that brought 900 restaurants in the UK to a halt. Recently, the chain announced it was suffering from a gravy shortage as well. Not ideal for a chicken restaurant. No chicken and no gravy mean no customers. The whole debacle could have cost Yum! Brands Inc., KFC’s Parent company, up to £1m in losses per day. Not to mention a PR crisis that, despite a cheeky apology, will follow the company for years to come. What went wrong?
For three decades now I have been helping my clients with their Supply Chain questions….I have seen a lot of change along my journey. Some of my early projects included initiatives like helping large retailers transform from a pure paper-based operation inside their 4 walls to a first-generation Warehouse Management System (WMS). I also helped my clients with Sales & Operations Planning and with Distribution Network Design and Transportation Optimization Projects, to name just a few. In the past, all of these projects shared a few common traits including long, tedious and expensive implementations involving small armies of consultants. It would take a long time and a lot of money before businesses could see improvement. That is not the case any longer. Today, I am happy to say that I am still helping clients make better decisions. The big difference is AIMMS. Today, with our Agile approach and extremely cost-effective cloud native technology, my clients are using our software in a matter of days to improve their business.
The chemical industry is facing some powerful changes that are directly impacting revenues and margins. It’s also highly competitive. Everyone is trying to dominate their niche. This means chemical companies need to be adept at managing costs and profitability. But doing this ad hoc is too difficult. Having the right technology is key.
Spreadsheets and legacy tools are no longer enough
There’s a lot of flux in the chemical industry. Raw material prices fluctuate constantly. Selling prices vary depending on international markets and what’s happening in certain countries. That margin between selling prices and raw material prices needs to be carefully managed.
At the same time, the industry is consolidating and changing rapidly. As mergers and acquisitions increase, managing demand in large geographies becomes even more complex. Companies that spin off due to M&A activity need to find ways to manage their own destiny. Many chemical companies are using S&OP (Sales & Operations Planning) as a tool to tie up operational planning and activity with financial goals and strategy. Many are still using spreadsheets and legacy tools to support this process. These tools may provide a good starting point for S&OP, but do not always provide the sustainability or flexibility that companies require to be agile during times of rapid change.
In today’s business environment, you can’t remain competitive without mastering analytics. Still, most companies are “not very far” when it comes to implementing analytics and garnering benefits from data, as a recent survey from CSCMP suggests. In many cases, organizations haven’t succeeded in making the organizational changes required to become data-driven. Not enough managers are fluent in the language of analytics. Leveraging analytics at scale is hard. As the graph below shows, lack of talent, investment in hardware/software and siloed data are among the most common challenges.
AIMMS has been active in the supply chain space for over 28 years. We’ve seen the evolution of the industry and its ongoing transformation, and have embarked on a transformation ourselves. The skills of the past are no longer sufficient to meet the demands of today’s complex, fast-moving digital environment, or prepare for the future. There is also a talent shortage. As the most experienced supply chain professionals retire, CSCMP estimates that as many as 3.5 million positions may go unfilled by 2020. The competition for talent is tough, as “demand for supply chain professionals is estimated to exceed supply by a ratio of six to one.” Here are three things you can do to attract and leverage talent for the digital supply chain.
The digital age has just begun. We haven’t seen the full force of disruptive business and operating models and there is no doubt that many more will keep emerging. We are only beginning to see the impact that digital transformation will have on our human resources as well. This will demand the creation of new and higher levels of personal development and organizational effectiveness to manage and sustain this culture transformation.
What are companies looking for in supply chain network design technologies? What works well, and what are the challenges? We commissioned Supply Chain Insights to conduct independent research about this topic and discussed the findings in a recent webinar. Today, we’re pleased to share a more extensive report on this topic. The report covers perceptions about supply chain network design (SCND) as a process and outlines the key benefits and barriers experienced by companies when using SCND technology. Let’s take a look at some of the key findings.
The next frontier: supply chain data architecture for your needs, not to feed the needs of numerous supply chain tech vendorsPosted on October 18, 2017 by Chris GordonLeave a reply
Data overload and quality issues are common problems faced by all organizations. This makes it really difficult to start getting value out of data with analytics. Inevitably, when you buy supply chain optimization software, you need to start hunting around for data to make the technology work – it can feel like you work for the technology vendor, not the other way around. That’s why 60% of the time spent in analytical supply chain projects is spent collecting data. The focus is on making the data work for the technology, rather than tackling your business need.
But today’s SC leaders don’t have weeks or months to solve pressing problems and the worse thing is, it doesn’t necessarily get easier once you’ve been through your first solution implementation. You may have deployed an out of the box Network Design solution. Implementing an Inventory Optimization App will take another tedious data integration process. In a supply chain context, that means it will take months before you can actually start improving margins, availability and service levels. To work proactively with analytics and truly embed them in your organization, data needs to be structured smarter and accessed for many needs.