Heating up supply chain analysis.

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Venturing out on the morning of the coldest day on record this year in Ottawa to play hockey may not have been the smartest thing I’ve ever done, but I did it anyway. The last word you would use to describe my movements on the ice would be “flexible.” Everything was frozen and I bet they had to turn on the heat in the hockey arena just to get back to a temperature between freezing and bone chilling. When frost bite is the result, you tend to learn your lesson. This led me to wonder why there is a continued use of tools for supply chain analysis that are “frozen.” Even after being “frost bitten” by the lack of flexibility when it comes to analyzing and responding to both planned and unplanned events, the heat does not seemed to get turned up on the existing tools. Let’s take the SCOR Upside Supply Chain Flexibility measure. This measure is described as, “the amount of time it takes a supply chain to respond to an unplanned 20 percent increase in demand without service or cost penalty.” This begins with knowing about the change, understanding the risk associated with the change, and then determining how best to respond to the change. Knowing sooner means having all of the right data along with the analytics that will not only highlight the risks, but also provide insight into your response alternatives. Your ERP system may give you most of the data, but some customer and supplier data may still exist outside ERP. Getting all the data and then applying the analytics, can be difficult, especially if you want to run multiple what-if planning scenarios. Of course, the other popular option is Excel. It may be easier to get data into Excel but it is unlikely you would have all of it. The analytic piece of the equation is the most difficult to replicate in Excel. The one advantage of Excel over ERP is that it tends to be easier to use. However the challenge becomes similar to using a heating pad to warm up at the rink, it is only good for one. As soon as the Excel file gets passed around, changes are made and then the “right data” question comes back into play. This is important because in most cases any response to the change, for example the unplanned 20 percent increase is not going to happen in isolation. In order to increase the analytic side of your “Upside Supply Chain Flexibility” measure, the wish list begins to look like this;

  • All of the right data in one place.
  • Supply chain analytics in the same place as the data.
  • Easy access to the data and the analytical tools for all required participants.

Look for these attributes to heat up your supply chain analytics capabilities. I guess only a frozen hockey player would come up with this analogy. Keeping on the lighter and warmer side of flexibility, be sure to check out this week’s New Kinexions video on flexibility. Poor Ari Cole can’t bend like he needs to! Click here to watch Episode 2 and don't forget to enter our "New Kinexions" contest! To learn how you can win an Xbox 360 with Kinect, visit https://community.kinaxis.com/thread/7369

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- January 26, 2011 at 1:18pm
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