3 True Stories of Supply Chain Management Disasters (And How to Avoid Them)

The fear of a supply chain disaster destroying years, even decades, of hard-earned company growth is enough to keep managers up at night — and for good reason: the smoking ruins of once-thriving companies have littered history, and fatal SCM mistakes have often been the culprit.

But with disaster comes new opportunities and, perhaps most importantly, new lessons that can help us learn from the mistakes of other businesses. These three SCM nightmares from history, though sobering, offer some valuable insights:

  1. The Massive Boeing 787 Delay and Its Painful Supply Chain Birth Pangs

In the mid-2000s, Boeing’s shiny new game-changing commercial airliner, the 787, was sending waves of excitement throughout the transportation industry.

But the planes weren’t getting finished quickly enough.

Initially scheduled to enter service in May of 2008, disastrous SCM problems resulted in a delay of over three years. It finally went into service in October of 2011, as Air Transport World noted with exasperation.

So what went wrong with Boeing’s supply chain management?

To put it simply: Boeing badly wanted to do more than it could handle, and they failed to assess the risks properly as they charged ahead. They attempted to rapidly change the assembly process and the supply chain simultaneously — and too quickly — to disastrous results.

Aerospace-Technology.com made these observations about the debacle:

Changing the supply chain and the assembly process all at once is probably two steps too far too soon. “Boeing probably underestimated the size of the risks involved,” says Robin Jackson, chief executive at ADR International.

In the same report, an analyst cautioned companies to be careful about how quickly you introduce innovations: “If Boeing mismanaged anything, it is that they have tried to introduce an innovation in their supply systems at the same time they have innovated in product and assembly.”

In other words, their supply chain really wasn’t ready yet. But they charged ahead anyways.

  1. Target Canada Ruined by Epic Barbie SUV Traffic Jam

In more recent history, Target announced in January 2015, as reported by USA Today, that they were pulling all their stores out of Canada and leaving the market.

Why?

They had a traffic jam of pink Barbie SUVs — literally. As Reuters reported:

A pink Barbie-branded SUV that seats two toddlers offers a surprising glimpse into the myriad problems that jammed up Target Corp’s supply chain…The toy was one of many products that piled up in bewildering volume at Target’s new distribution centers…Goods were coming into the warehouses faster than they were going out, in part because the barcodes on many items did not match what was in the computer system.

 

Like Boeing, they took on too much too quickly, as Reuters noted: “Instead of a slow province-by-province rollout, the retailer clinched a big real estate deal, locking itself into a rapid, coast-to-coast launch that later magnified supply chain problems.”

The failure cost Target more than $2 billion. Their supply chain traffic jam left shelves empty and shoppers frustrated.

Marc Wulfraat, the president of logistics consulting firm MWPVL International — a man who has analyzed and written about Target’s supply chain extensively — summed up the epic scope of Target’s failure with one sentence: “The Target Canada story will go down in the history books as one of the great supply chain disasters of Canadian history.”

 

As a Target spokeswoman Molly Snyder confessed to USA Today: “We tried to do too much, too fast.”

 

  1. It’s All In the Timing: The Great Hershey’s Chocolate Meltdown of ’99

In 1999, in the months leading up to the over-hyped Y2K doomsday, Hershey’s had a little doomsday of their own: they failed to deliver $100 million of Hershey’s Kisses and Jolly Ranchers to stores in time for Halloween. As a result, the company’s stock lost 8% in one day when the problem was announced.

As CIO.com noted in their coverage of the Hershey incident in the early 2000s: “Hershey’s only real failure was its timing in launching its new order-taking and distribution system: the system went live right about the time when orders were pouring in for Halloween, and they couldn’t be fulfilled.”

What’s the common thread here?

Don’t rush the launch of new systems and supply chain protocols. And get outside help. Every company has blind-spots in their judgment, even behemoths like Boeing and Target. Getting an outsider’s input will diagnose any fatal blind spots. (MaxQ Technologies, for example, offers superb application developmentand business intelligence consulting under one roof to ensure companies transition into new systems with success.)

Tips for Avoiding Disaster

The general principle is clear: don’t try to do too much too quickly. Beneath that generality there are some specific, practical things to remember:

  1. Always operate with a comprehensive visibility throughout every step in the supply chain.

As Chris Kushmaul, the vice president of finance for the American Production and Inventory Control Society’s greater Detroit chapter told Enterprise Apps Today: “If you don’t know where your raw materials originate from, what locations they will have to pass through, where your distributors are located and where your finished goods will travel, that could be costing you in efficiencies today and will hamper your risk management efforts in the future.”

  1. Always be prepared for disruptions in the supply chain.

Jeff Karrenbaur, president of Insight, Inc., told Enterpise Apps Today how to be prepared: “Companies must be prepared for business disruptions by having in place an overall risk management and resilience plan. They must perform rigorous analysis of their supply chain network to uncover its vulnerabilities and manage risk.”

  1. Avoid launching a new product with multiple suppliers (unless you have enough resources to pull it off).

Akhil Oltikar, vice president of supply chain solutions at Riverwood Solutions, explains it this way: “…With a multiple contract manufacturer launch, the brand owner is faced with managing two of everything – a process that is far more complex than simply doing the same things twice. Managing the complexities introduced by launching a new product at multiple contract manufacturers almost always slow things down and causes more problems than it solves.”

  1. Bridge the disconnect between the planning stage and the delivering stage.

This is a more tragic example of what poor supply chain management can do. Lithium-ion batteries — the little packets of power in our mobile devices, laptops, and other daily tech devices — explode when overheated, and such incidents have caused damages, injuries, even fatalities. Some of these explosions occurred while being shipped. Air carriers even refused to ship the batteries for that reason.

Toby Gooley, the editor of Supply Chain Quarterly, analyzed the exploding battery problem and came to this conclusion in a recent June 2015 article: “…it seems likely that the product planning phase did not take into account all of the activities and conditions that would occur at each subsequent stage in the supply chain.”

A Fresh Perspective

Often times, these supply chain problems — whether it’s a company rushing into something or it’s a disconnect between critical nodes in the supply chain — can be remedied by bringing in the right kind of outside help.

In a February 2015 article about supply chain management in health care, Jean Skora, materials manager at The Surgery Center of Pinehurst (N.C.), explained the value of getting help from outside consultants — whether it’s implementing powerful new distribution software carefully tailored to your needs or it’s getting fresh advice: “They can provide your supply chain staff with a new point of view. A fresh perspective can re-energize an overwhelmed staff.”

MaxQ Technologies has that fresh perspective you need. Contact us to learn about our highly effective distribution software solutions and consulting services that will help you avoid supply chain management disasters.

 


Choosing the Right Subscription Software

Offering subscription services to your customers has many advantages. Your business and your customers will benefit from these services. Setting up subscriptions is not as difficult as it may seem. It is simply a matter of finding the right subscription software to fit your needs. There are a few things to consider when deciding which software to use.

The first thing to keep in mind is the customer. The customer interface is extremely important. It needs to be user-friendly from both the customer’s and users perspective. Ask yourself, “How easy is it for my customers to sign up and cancel subscriptions?” Your customers should be able to manage their subscription easily. If your customers have trouble accessing their subscription options, you will certainly lose the,

Access to statistics and KPIs are other features that is an important aspect of subscription software. In order to make decisions about your business, you need to see the numbers. How many people are subscribed? What is your current and predicted ARR (Annual Recurring Revenue). When did you gain or lose subscribers (churn)? How much did you upsells and downsells. Knowing when your subscription numbers fluctuate can point you to crucial information. You can determine what you did during that time to cause the fluctuation. It is also helpful to have access to billing and revenue forecasting  so you know when and how much billing is going out to predicate all important cash flow and the revenue impact on your financial statements.

Automation is a key in making subscription services work efficiently. Look at how well the software deals with automation. Once you have set up and implemented the software, how much time will you need to devote to manage the subscriptions? Good software should handle most of the work for you. It should be fairly effortless on your part. It should also allow you to make changes to the workflow to better fit your needs. If you have concerns about setting up software, make sure the software company   reliable implementation methodology and good consulting and technical support.

Now you simply need to find the best software for the most reasonable price. Once you have determined exactly what features you need, then you look into the cost involved. This is an investment in your business. The goal is for a reasonable ROI while reducing risk. When executed properly, a subscription service is a great way to generate revenue.

 

Take your time and do your research. Having the right software will make or break your ability to profit from subscriptions. Contact us for more information.


Changing Acumatica Grid Column Headings at Runtime

Changing Acumatica Grid Column Headings at Runtime

Acumatica allows developers to dynamically change the headings of grid columns when the user changes the values of fields that are not in the grid.

For this to work, there are three things that the developer must do.  First, the controls that the non-grid fields are bound to must have their CommitChanges property set to True.  This is to ensure that changes to their values will cause a postback and that the RowSelected event of the associated cache will be fired.

Next, within the RowSelected event handler of the non-grid cache, the developer must call the PXUIFieldAttribute.SetDisplayName method to specify what the new column heading will be.

Finally, the Grid’s RepaintColumns must be set to True in order to ensure that the grid gets repainted when the postback completes.

Below is an example implementation of the RowSelected event that changes the heading of the Sales Orders screen’s Free Item column. This will change the column heading from “Free Item” to “Ext Free” or “Free” based on the value of the CustomerRefNbr field.

 


 

 

protected void SOOrder_RowSelected(PXCache cache, PXRowSelectedEventArgs e)

{

    if (e.Row == null) return;

        SOOrder data = (SOOrder)e.Row;

 

    PXUIFieldAttribute.SetDisplayName<SOLine.isFree>(Base.Transactions.Cache, (data.CustomerRefNbr == “A1”) ? “Ext Free” : “Free”);

 

}

 

 

 


Demand Planning-Sensing and Shaping Forecast

Demand Planning-Sensing and Shaping Forecast

Demand planning requires a lot of coordination, and even the most coordinated of us has a difficult time keeping everything going smoothly constantly.

Yet, that is what demand planning is designed to do for us and the best we can do is wring out the best information we have and create a plan.

There are there are several steps that companies need to use demand orders for planning capabilities. Several steps are critical in order to avoid issues further down the supply chain.

In an article in Industry Week, the top three best practices in demand planning, according to Gartner’s research, are:

 

  1. Define the balance between collective forecasting and statistical modeling. This helps improve accountability for the forecast, and enables continuous improvement across the enterprise.
  2. Utilize demand shaping and sensing capabilities. “Demand Sensing” is a new form of forecasting. It is a method that leverages new techniques and near real-time information. The format is used to create a more accurate forecast of demand, using current design of the supply chain.

Companies that utilize these processes as part of their demand planning greatly improve their forecast accuracy.

Organizations need to recognize that the plan is not a sales or marketing forecast. Planning is a mix of items that could be sold, balanced by constraints and demand risks. Demand sensing points to leveraging and collecting downstream data in the supply chain decisions.

Demand shaping influences customer demand and moves it toward more profitable categories or specific products.

  1. Measure the forecast accuracy at the item level, customer and location level. Sales forecast accuracy should be measured for accountability and continuous improvement.  The place to measure is in the sales and operations planning review process.

As in life, not everything we plan goes as expected. The best possible forecast can still fail. This is why we have backup and alternatives plans. It’s what UPS likes to call a flexible and responsive supply chain.

It’s important to:

  • Investigate time-definite transportation alternatives for shortening lead times.
  • Be sure you have the flexibility to obtain alternate supplies and a time-sensitive service capability to deliver them.
  • Confirm that you are working with vendors/partners/carriers that are flexible.
  • Plan ahead for contingencies.

If you would like more information about designing your demand planning forecast, please contact us