Our very last IndustryWeek Business Challenge is up. It discusses the challenge of an industrial vehicle manufacturer in managing a volatile supply chain on a daily basis to ensure customer satisfaction. Management and staff are asking all the right "what-if" questions, the problem lies in delivering sound answers, quick. "Best guess" answers are inadequate. What do they do? Trevor Miles, director of industry and applications marketing for Kinaxis provided his commentary, as did Bob Ferrari of the Ferrari Consulting Group and founder of the well-read Supply Chain Matters blog. (Btw, we've also recently published a white paper on this topic: Evolving from Business Intelligence to Business Value.) The full challenge is found below. I'm sure it will resonate with many.... Like most manufacturers in our industry (landscape and building-maintenance vehicles), and probably every industry, Vrashtt
Vehicles deals with many suppliers. Our supply base is always changing as vendors emerge and others go away (or are sent away). And the day-to-day details of our supply chain are always in flux as we develop new products, suppliers sell new components, parts and part numbers change, and the marketplace changes. I get all that, and Vrashtt does a decent job of managing a fluid supply chain to ensure customer satisfaction (i.e., good quality, on-time delivery). But here's what keeps me up at night. Are we — day in and day out — satisfying customers in the most efficient manner given circumstances at that moment? For example, could we ship product early to clear inventory without burdening our distribution centers or retail and wholesale customers? If a supplier offers lower pricing, higher volumes, and longer lead times, will that affect our cash flow, timely delivery of products, and storeroom of outdated parts? If we're strapped for capacity and tap an outsourcing opportunity, will that impact our product costs, quality, and customer satisfaction? I doubt my staff can give me the answer, because, at the moment, they can't tell me what order will be late or what is causing them to be late, without spending a lot of time extracting data from our ERP and pouring over a ton of Excel worksheets (which may or may not have the data they need). By the time they have finished the analysis, other issues have come up (and some original issues have turned into a fire storm). I also wonder if we could be giving our customers more value and winning more of their business. For example, if we offered extended warranties on products and components, will that boost sales but not affect what we pay out in warranties (i.e., can our products and components withstand longer warranty periods)? If we offered service agreements, will the up-sell be worth the effort (and what products could we service)? I could ask such "what if" questions all day, and my staff will tell you that I do. We're constantly facing such options, and so my staff makes their best guess based upon limited information. I'd like more than a best guess. I'd like more than a good guess. I'd like to know sound answers to these scenarios and see alternatives on the fly. Am I expecting too much?
Are you in this situation? What are you missing?