how his first month with Kinaxis was going. Here’s what he shared: Last week I met up with an old friend, a supply chain executive in the Valley and we caught up on the last 20 years. I shared my journey with several large companies: Apple, EMC, Bose, AMR Research, Sony and now Kinaxis. As we were chatting he asked, “what’s been the coolest place to work?” I thought a good bit about it. Was it the Friday afternoon beer-bashes at Apple? Was it the walks over to Dunkin for coffee with the AMR analysts and talking best-in-class supply chain research? After some thought, I told him the coolest place was where I learned something every day, where the environment is not only open to learning new concepts, but also executes them. That’s the definition of innovation (…The free products & company logo shirts were pretty cool too…). That’s the reason I joined Kinaxis. The product is innovative, implemented, and delivering on the promised benefits. In these past 30 days, I’ve watched > 20 videos of Kinaxis presentations, met with > 15 clients & analysts, and read > 30 case studies of Kinaxis success stories. The one theme that resonates is that customers love using Kinaxis. Why? Best answer I’ve received, “I’ve got a lot to deal with, and not a whole lot of time to solve it”.
A lot to deal with = complexity
Not a whole lot of time = speed
It reaffirms my belief in the equation: complexity is the inverse function of agility (or speed). In my 23 years of supply chain business, a constant has always been “complexity”. I’ve seen, and probably can be blamed, for high tech supply chain outsourcing. China, Mexico, Eastern Europe, 3rd Party providers, Multi-Sourcing Suppliers, you name it, High Tech supply chain footprint is complex. Removing a SKU off the price book – never saw it in 23 years – product is complex. My favorite complexity story was at the AMR conference, Cisco’s Angel Mendez presentation:
“On its first night of continuous operations in 1973, Federal Express delivered 186 packages to 25 US cities…”
Pause... plays some Enya “Orinoco Flow” music.
“FedEx delivered 9 million packages to 220 countries …last night.”
To put it bluntly, speed cures the ills of complexity. Don’t like your monthly S&OP cadence? Try doing S&OP weekly, at the SKU level – Samsung does… and their market share results show why. Why is speed so important? For obvious reasons, speed enables better margins & profits, improves cash flow, lowers COGS, and addresses quality issues faster, better cost-to-serve and a greater shot at improved market share. Case in point: one very complex situation that most supply chain’s run into is EOQ (End of Quarter) or the fun term: Hockey Stick effect. Speed can make or break the EOQ profit. At EMC, we’d get 40% of the quarter’s orders in the last week (or some would say, the last day). We would need to align various sales geographies, factory & distribution personnel, finance, and supply chain around the single goal of most profitable orders. The traditional thinking of improving speed of transactions between systems was usurped by improving speed of knowledge between people. The end benefit was amidst all the EOQ complexity and limited time, everyone was focused on just the most profitable orders. Inventory movement was optimized, premium freight was minimized, and overall COGS was controlled. We even got a side benefit where inventory was prepped for the next quarter – and commits (on time delivery) were maintained. The other reason, one which is not so obvious, is that speed enables innovation. I love asking supply chain executives how they innovate their supply chain. Here’s how the conversation typically plays out:
Q. “How do you innovate your supply chain?”
A. “We simulate new strategies and supply chain models, and test them against business outcomes”
Q. “When and how often does your team do this?”
A. “Well, after we complete the plan, share it with Sales & Marketing, align it with Finance, finalize it with our suppliers, communicate it out to our customers, expedite critical orders, resolve inventory stock outs, adjust the BOM’s impacted by ECO’s, and true up the NPI/E&O plans, we then have the time to focus on innovation.”
I’ve seen so many supply chains get caught in the cycle of managing the day to day complexity. Speed, applied the right way, doesn’t get rid of complexity. Rather, it allows your organization to rise above complexity, and have the time to ask what if questions, and execute what if scenarios. When you get to this stage, your supply chain will be “not only learning new concepts, but also executing them”. And, that will be a cool place to work…