Precise means being exact, accurate and careful about details. The difference between good and great. As we discussed in our recent Supply Chain webinar, this is not an easy task if you have a lot of fluctuating demand and uncertainty in your production process. During the webinar, Paul Coombe (Supply Chain Director at Nampak Glass) shared his insights on making the best possible use of your production facilities and optimizing the way you respond to changes in demand. This is particularly difficult at Nampak, a business that aims to produce 350 tons of glass per day while managing different production processes for different bottle types and maintaining customer service at a profitable level. The interview below summarizes how Nampak tackled this challenge.
Optimization is a form of advanced analytics that helps you solve complex decision problems, enabling you to make the best use of your business’ limited resources.* When applied to S&OP and IBP, modeling and optimization enable you to balance out scenarios and perform what-if analyses so you can analyze how these different scenarios will affect your inventory and/or cost. You can gradually enrich your planning process with financial figures, add basic analytics to it, and build your organization with scenario optimization embedded in the core business planning process.
I recently had the pleasure of speaking with Norm Jerome, a longtime AIMMS customer. It was great to learn about how AIMMS is used in the BP Petrochemical businesses and how it has been adopted by more and more end-users across the business. Here is a summary of that interview.
Hi Norm, Tell me a little about your background.
My formal training was in Chemical Engineering with emphasis on Process Control, and for the first 10 years of my career I worked as a Process Control Engineer, initially at Eastman Kodak, and then at Amoco. In the mid-90’s I moved over to Amoco Oil’s planning & scheduling department, and started working on refinery LP’s and scheduling systems. It was in that role that I first started working with AIMMS. At the end of the 90’s Amoco was acquired by BP, and around the same time I transferred over to what was now BP-Amoco’s Aromatics department within Petrochemicals, where I have been ever since.
Papyrus, a leading European paper wholesaler, started using AIMMS in May 2014 to implement radical changes in its supply chain network and re-envision its forecasting, replenishment & supplier management workflow. The company’s supply chain supports more than 68,000 customers in 20 countries from warehouses and cross-dock platforms strategically located across Europe. Historically, every region was served by a warehouse that stocked an estimated amount of paper to meet local demand. Suppliers delivered to approximately every warehouse, with long lead times of four to five weeks. Due to high MOQs and fragmented demand spread out across a large number of warehouses, deliveries were infrequent. This was a high stock solution which the company could no longer afford due to a secular decline in the demand for paper and the global economic crisis. To overcome this challenge, the company would need to embark in a supply chain transformation journey to reduce cost and inventory while improving availability.
‘‘I want highly automated systems, a value chain network that optimizes my service and costs, the best talent available and the necessary predictability so that I can smartly invest in physical infrastructure.’’
It’s becoming clear that supply chain executives aren’t going to get all that they want. Traditionally it takes at the very least 2 years to realize investments in technology and physical infrastructure. Consider that 2 years ago oil was trading at more than twice the current rate, China wage rates were 20% less than today and 40% of supply chain talent with deep analytical expertise was paid by a different employer.
For most enterprise companies, ERP has become a foundational infrastructure technology and a cost of doing business. However, many are finding that it is not the optimal technology for Supply Chain Planning and Optimization. This has led to usage of spreadsheets to help fill in the gaps. But spreadsheets come with new challenges. Leading companies are overcoming these obstacles and finding success with an alternative that is quickly gaining adoption.
A recent report by the ACE European Group identifies supply chains as of the biggest sources of concern for European businesses today. On the one hand, companies are facing growing uncertainty due to volatile exchange rates, rising oil prices and economic and geopolitical events, such as Greece’s financial crisis and the conflict in Ukraine. On the other hand, there is a rising need for smarter and more flexible tools as well as more staff with analytical capabilities. This post will explore these and other challenges as well as the key innovations defining European supply chains.
An Interview with Christian Olsen, Head of Business Development at Höegh Autoliners
I recently had the pleasure of meeting Christian Olsen, Head of Business Development at Höegh, a leading global shipping company specializing in vehicle transportation services. Christian and his team were in our offices taking part in a new 2 day “hackathon” workshop that involved collaborative app development with AIMMS, Höegh and Ab Ovo, an AIMMS IT implementation partner.
The European Supply Chain and Logistics Summit has established itself as one of the largest conferences in the industry. This year, lots of leading companies shared best practices and learnings from their supply chain projects and innovations. The summit offered an impressive speaker lineup, featuring Nestle, Ikea, Samsung, AIMMS clients like Merck, BP, Nampak, BASF, and Philips and our partner Oliver Wight. It was a pleasure to meet several of our customers and share our insights on supply chain analytics at the event.
This month, I had the pleasure of attending Gartner’s Supply Chain Executive Conference in Phoenix. The theme of the event was “The Art of Supply Chain: Creative Solutions for the Next Generation.” Its agenda included over 60 sessions covering the full spectrum of supply chain—from strategy and planning to distribution and logistics. In almost every way this is a large and very professionally run conference with over 1500 attendees, everything you would expect from a Gartner event. In this post, I will summarize some of my favorite takeaways from the conference.