4 Ways the Cloud Improves Supply Chain Planning

Supply chain planning used to be more of a guessing game, relying on intuitive managers that, basically, had the inventory and sales data in their heads or on spreadsheets. Advancing technologies have been changing how business processes are: managed, planned, and accomplished – shifting thinking patterns from managing inventory and sales to managing functions and tools within ERP systems. 2017 seems to be the year when a balance will emerge more distinctly; let’s discuss this more by examining 4 ways the cloud improves supply chain planning.

#1. Automation:

Manufacturers and distributors have many working parts to manage within their enterprise systems, including supply chain planning. The real-time functionality of cloud based software brings continuous adjustments, and specified filters determine automated functions to streamline purchasing and order management.

Automatic updates to SaaS, IaaS, PaaS systems also help managers and IT departments focus on strategy, rather than managing systems and tools. Effective supply chain planning depends on real-time numbers from a continuously updated system, including: historical business intelligence, special projects, discounts, engineered to order products, vendor costs, and more.

#2. Enhanced Integration:

Cloud based subscription software is easier to integrate into enterprise systems and gives more functionality with add-ons. This enhanced integration brings more flexibility to businesses with supply chain planning. For instance, if there’s a need for an order management add-on or a custom software solution for a project.

There’s no one size fits all solution for manufacturers and distributors; each business has unique supply chain planning needs according to their: clients, products, systems, and compliance/regulation requirements. Enhanced integration capabilities with cloud based software helps businesses adopt necessary tools and functions with more agility.

#3. Predictive Business Intelligence:

Again, the cloud provides real-time automation, enhancing a business’s ability to predict supply chain patterns and needs. Human intelligence augmented with predictive business intelligence, brings the best of both worlds for supply chain planning.

Planning and strategy have always needed business intelligence from data analysis. User defined formulas combining: past history, present demand, material specifics, and customized options – give managers actionable insights into: inventory, sales, times, costs, and needs, with real-time availability and updates. This streamlines supply chain planning with more precise predictions.

#4. Enhanced Collaboration:

Supply chain planning is a team effort for nearly all manufacturers and distributors, involving: sales teams, warehouse teams, executives, vendors, clients, accounting departments, etc. Cloud based software enhances collaboration between team members anytime, anywhere, and with any digital device. This expands remote capabilities, creates continuous planning development, and gives more tools for collaboration methods.

Modern businesses are using mobile devices to their advantage, at home and at the work place. Remote accessibility is a distinct advantage businesses have when using cloud based software solutions, creating efficiency and flexibility in the supply chain planning process, which is often time sensitive.

Using the expanded capabilities of the Microsoft Dynamics platform, including CRM software, businesses will have multiple methods of collaborating during the supply chain planning process. Cloud capabilities will enhance these tools with remote and real-time functionality, enhancing collaboration methods and planning effectiveness.

Summary

Cloud based subscription software is simplifying business processes and adding functionality with centralized integration. For businesses and organizations with many moving parts and large fluctuating inventories to manage, this is streamlining day-to-day tasks, including supply chain planning.

 

Through automation, integration, BI, and mobile computing, managers now have optimal organizational tools with cloud based software solutions.

Max Q Technologies has certified expertise with Microsoft Dynamics and Acumatics products and can help manufacturers and distributors to: choose, implement, and manage the right software solutions for their unique business’s needs.

We also develop custom software solutions with top developers and industry expertise across all fields. We’re offering to be a comprehensive technology partner with nearly 30 years experience, for businesses that want to take advantage of cloud software for supply chain planning and more. If interested in learning more please contact us today.

 

 


Six Supply Chain Planning Strategies to Maximize Your Company’s Performance

Supply Chain

An efficient supply chain is critical to achieving order accuracy and customer satisfaction. Companies must take the initiative to improve the training of supply chain employees and periodically review their relationships with key vendors and shipping agents. Additionally, they should consider automating their inventory management processes to conserve costs and human resources. Below are six supply chain planning strategies designed to help maximize a company’s overall performance.

Enhance Training Programs for Supply Chain Employees 

Well-trained employees are the foundation of an efficient supply chain. In order for employees and supply chains to operate most effectively, all employees should understand how their individual jobs are critical to the overall functioning of a company. Training programs should be detailed and thorough and should encompass the following points:

  • An overview of the fields of distribution and logistics
  • The order picking and packing process
  • Inventory management strategies
  • Shipping and transportation operations
  • MRP & DRP concepts
  • Communication skills to use during vendor and customer interactions
  • The importance of accuracy and meeting deadlines

 

Whenever possible, supply chain employees should be recognized for mastering key elements of the training process. By providing recognition and incentives, employees remain engaged in the process of mastering the fundamentals of supply chain activities.

Automate the Inventory Management Process 

One of the most effective ways to improve supply chain functioning is to invest in a proven inventory management system. An automated inventory management system increases efficiency through auto-populating inventory fields with default codes for product attributes when appropriate. By automating inventory procedures, companies can save valuable time and money by eliminating the need to manually enter all inventory data. Automated inventory management systems are particularly useful for the apparel industries and others that have an endless number of types of product attributes such as size or pattern.

Consider a New Quality Management System to Monitor Workers

A shortcoming of many manufacturing and production companies is the absence of a quality management system that monitors supply chain employees. While there is usually no shortage of quality management systems that track sales performance, many businesses do not employ any formal type of quality management system to monitor shift workers. A quality management system permits company strategists to identify supply chain inefficiencies, top supply chain employees and effective training strategies. The introduction of a quality management system to monitor supply chain employees will help keep employees engaged and focused on accuracy.

Monitor Vendor Performance 

Purchasing managers and operating officers should regularly evaluate the performance of their vendors and suppliers. Two key performance indicators to monitor are timeliness and order accuracy. A vendor’s repeated errors or failure to adhere to shipping promise dates affects the functionality of a company’s entire supply chain and can be detrimental to customer satisfaction. A long pattern of performance failures should prompt a company to explore the use of another supplier.

Keep Shipping Costs Competitive by Regularly Comparing Rates 

One of the best ways to control costs for your company and your clients is to keep shipping and handling charges to a minimum. As a key member of the supply chain team, a company’s shipping manager should regularly compare shipping quotes from key shippers and freight forwarders. While ensuring a speedy and safe delivery should always be the primary concern for a company, it is also important to keep prices competitive by periodically exploring the rates of new shipping providers.

Choose an Industry Leader to Facilitate Your Supply Chain Planning  

By enlisting the support of an experienced supply chain automation specialist, your company will be another step closer to maximizing profits. With nearly three decades of experience in offering software solutions to companies in the manufacturing and distribution arenas, MaxQ Technologies, Inc. (MaxQ) has established itself as a trusted leader in supply chain planning solutions. Please contact us to learn how we can help your business optimize its supply chain performance. We look forward to hearing from you.

 


8 Ways to improve Supply Chain Planning

The supply chain is an integral part of any business. Without the increased attempts to improve the process we go through to get products from the beginning of the chain to the end, great delays in progress will occur.

It is vital for companies of all sizes to continue their efforts of making improvements to the supply chain and planning for its success. This is where supply chain planning enters the picture. Supply chain planning is the attempt to improve the way products leave the hands of the supplier and enter the hands of customers who purchase them.

There are many ways a business can speed up and improve on this system. By exploring these avenues, you will find that improving supply chain planning is much simpler than one would at first believe. When you are looking to improve your supply chain planning process, be sure to take a look at these eight improvement opportunities.

Communication

No business can succeed without great communication skills. Without it, items will be missed, projects will be delayed and mistakes will be made. This is also true of supply chain planning. Communication among all parts of the company in question is vital to the overall success of the supply chain.

For this reason, it is suggested that a business utilize computer software and equipment that can communicate with different portions of the business. This will allow for communication that is fast and efficient, which cuts down on lag time between when one department finishes a portion of the chain and another begins one. This will also allow leaders to quickly find and eliminate issues that may slow down the progress a product makes through the chain.

Partners

While communication between different portions of the chain is important, it isn’t always possible. In many instances, major portions of the supply chain are controlled by outside companies or individuals who are not directly affiliated with the company in question.

If this is the case, business leaders must determine ways to partner with those who have access to the vital information that will help make their company’s supply chain planning efforts effective. Along with this type of partner, it is also essential to find other companies and individuals to work with that can also enhance the company’s supply chain planning process. Succeeding in this area can help a business save time and money, which can then be spent on key aspects of the business.

Align with External Demand

Understanding the effects your customers have on the supply chain is also an integral part of improving the planning process. When businesses are able to predict when their customers will be making specific purchases, it is much easier to keep down inventory numbers.

Research shows that businesses who align their supply chain planning with external demand are able to cut down on the amount of inventory they need to carry as well as the number of employees needed to care for that inventory. In the end, this can help save time, money and make workers more productive at the same time. Taking advantage of the knowledge of your customers that your sales people, marketing and supply chain operators have will help with this process.

Focus on the need of the Customer

One mistake many manufacturing companies make is believing the only thing they need to be concerned with is getting their products into the hands of retailers. The fact is, along with improving the production of the product, they also must consider the final end customer.

These types of companies should take into consideration which products are being purchased as well as which products are not as popular. This is information that can help you determine how much inventory of one product is needed over another. Plus, it gives you better insight as to when to expect certain products to sell, which can help you manage your supply chain planning even further.

Rely on Accurate Data

Data is a huge part of the supply chain planning process. However, if you aren’t focusing your attention on the right data, you won’t be able to make improvements. For example, many companies make the mistake of pouring through rows and rows of data in a spreadsheet when they could be getting more accurate information elsewhere.

The important thing to remember is that you need the most accurate, up-to-date information possible. It is best for this data to be easy to understand and comprehend at the same time. You should quickly be able to decipher the data so that you are able to move onto the decision-making process. The simpler the information is to go over, the better.

Top Management Cooperation

As the importance of supply chain planning has greatly risen over the years. However, along with then need for it, the challenges have also increased. Today, more and more top management leaders and executives have found themselves focused on this important part of the business.

One of the best ways executives can make improvements to the supply chain planning process is to develop a clear set of goals and strategies. These items should be different than the strategies that are in place for the overall company itself. Instead, your planning goals should be put in place to enhance the company and should enhance the process you already have in place.

Understand Challenges

As with every aspect of the business, there are definite challenges that companies must overcome when it comes to supply chain planning. For starters, finding qualified leadership to manage the planning process is sometimes challenging depending on the specific industry. There are also challenges when it comes to determining the ROI in relation to the technology solutions needed to fully utilize supply chain planning properly.

In addition to these items, there are usually both external and internal challenges to face. For example, sometimes communication between the different moving parts of a company isn’t possible due to outsourcing. It is also sometimes difficult to align portions of the planning process with the specific needs of the different divisions of the chain. Understanding these challenges and looking for unique solutions to them will help any business be more successful with supply chain planning.

Track Results

There are many technologies currently available that allow businesses to track their supply chain planning efforts. When selecting these items, make sure you choose mobile technologies along with traditional options. Employees are now on the go more than ever before, which means they will be away from the office a great amount of time. Having a mobile option that helps them with their supply chain planning attempts will help make sure errors are not made and issues are addressed in a timely manner.

Tracking your efforts is also important. You should develop a system where you can automate the supply chain planning process as much as possible. In the end, this is something that will help you see areas that require improvement faster so that you can gain the most benefit from the system.

Supply chain planning is the best way to make sure your business is able to maximize profits by controlling inventory and correcting shipping delays. By putting these eight items into action, your business will quickly discover the process that makes up the supply chain planning system is greatly improved.

Contact us to learn more about supply chain planning and how to improve your business’s system.


7 Signs you should Upgrade your Distribution Software

With any business, growth is a natural part of the equation. As this growth occurs, it is important that you maintain your software systems and ensure that they are not ready for an upgrade. One of the most important software items that many businesses rely on daily is distribution software. This software manages everything from processing orders to purchasing and everything in between.

Distribution software is an important part of the day-to-day process that many businesses go through. Keeping it up-to-date is something that is a concern for businesses of all sizes. If you are a company that relies on distribution software, it is important that you take some time to determine whether your system is due for an upgrade. Here are seven signs to watch for.

  1. The Speed is not optimal

One of the main areas of focus that software developers spend time with when creating new software is the speed of the software and how it optimizes operations. They understand that businesses are looking for software that moves quickly and that offers little to no delay in use and operations.

If you are finding that the speed of your current software is slower than you would prefer, it may be time for an upgrade. Having real-time data is a must when it comes to distribution and speed is a huge factor in providing this type of data.

With an upgrade, many businesses are able to see the speed of their distribution operation increase because their employees are not spending as much time with the software doing manual processes. Overall, this helps to promote productivity and makes it easier for work to be completed correctly.

  1. The Processes do not work with the rest of your System

If you are like many distribution companies, it has been awhile since you upgraded your distribution software. However, it is likely that other portions of your system have been upgraded over time. This could mean that your distribution software doesn’t mesh well with other parts of your system.

The dangers with this is that employees could be spending a lot of manual time inputting information in one system or the other. This is a huge time waster, especially if a simple upgrade would allow them to avoid this additional work.

The entire point in distribution software is to help businesses manage and process their inventory in a streamline manner. However, when the software that you are currently using doesn’t work alongside others in your system, this is not something that will be possible

  1. Your Competition is outperforming you

Nothing is a better judge of how your system is performing than your competition. If you find that your competitor has a much easier time managing their inventory and controlling costs, this could mean that they have a stronger distribution software than you do.

 

You should always take time to survey what your competition is doing. Occasionally survey their catalog or online inventory to determine if products are out of stock regularly. If you are struggling with this issue and they are not, this probably means that you could use a better management system for your inventory.

  1. New and Worthwhile Features are Available

With each new upgrade, a list of features and additional add-ons become available. If you find that many of the features that are common in distribution software options are favorable for your business, you should strongly consider an upgrade.

Some businesses view additional features as a nice bonus to their software, but they can actually serve a much more important function. Businesses should carefully analyze the items that they are missing in order to determine the ways that they will help to make them more productive.

Being productive is an important part of managing your inventory properly. As software changes and grows, so does the functionality of the items that the software can control. When looking at the additional features, businesses are likely to find many ways that they can be a benefit to their ability to distribute and manage their inventory.

  1. Lack of Technical Support

Learning how to properly work with software is sometimes challenging, especially if you are using it for the first time. Even those who have had the same software for many years may find that they need assistance from time to time. Unfortunately, technical support is not always available for older software.

If your business lacks the technical support that it needs with its software, this is another area that you should consider when looking for software upgrades. Technical support is something that can help to save you time and energy because you will not be expected to troubleshoot your issue alone. Instead, you will have the assistance of experts to help walk you through the issue you are having.

  1. You’re Losing Money

Nothing can cost more money for a company than an improper management of their inventory. Whether you are constantly running out of items or have a surplus of items that are not as profitable as others, it is important that you have software that will help support your distribution needs.

With older software, it is difficult to discover the information that you need to properly manage your inventory. This is because of the many changes that have taken place in recent years regarding customer purchasing habits and trends within the industry. However, with a distribution software upgrade, you will be able to know that you are receiving the most current information, which will help you to maximize the amount of control that you have over your inventory.

  1. Your Version is no longer supported

Finally, you will need to keep an eye on the creator of your software in order to determine if your version is still supported. As time passes and more versions are released, software manufacturers will slowly start phasing out older versions.

This could mean that your company is no longer working with a version of distribution software that is supported. Having a supported software is important because it allows you to remain up-to-date on any changes that take place with the software. This could be important items like regulation changes or simple upgrades to make the system sounder.

Operating any type of software that is no longer supported by the manufacturer is pretty much like operating in the dark. You will no longer be aware of changes and you may be at risk for data breaches. Plus, if support has ended for a particular version, it is likely that a more powerful version is now available that will serve your needs much better.

What are the Benefits of Upgrading?

One of the best things about technology is that it is always advancing in amazing ways. This means that when you upgrade your distribution software, you will be able to see great improvements in your system. Businesses who perform such an upgrade are able to enjoy more productivity because of the advancements that are now available to them.

Deciding which distribution software is sometimes challenging because of the many options that are available. This is an area that we are skilled to work in, so make sure that you contact us when going through this process. We have the ability to assess your company and to help you find a distribution software that best fulfills with your needs.


Why a Proactively Transparent Supply Chain is Smart Business Practice

While it’s true that governmental over-regulation stifles growth and often gives companies the feeling of being under siege, a proactive habit of transparency in the supply chain — initiated by the company, flowing out from within its culture — can be beneficial to both the consumer and the company’s bottom-line.

MIT Supply Chain Researcher Analyzes Proactive Transparency

Alexis Bateman, director of the Responsible Supply Chain Lab at the Center for Transportation & Logistics at the Massachusetts Institute of Technology, sees certain benefits to proactively embracing transparency in the supply chain instead of fighting it.

As quoted in a recent September 2015 article by SCDigest.com, Bateman wrote: “Uncertainty over the trustworthiness of supply chains erodes consumer trust, a trend that should concern any enterprise. Companies should recognize that greater supply-chain transparency can allay consumer fears and capture commercial benefits.”

She outlines three specific benefits that proactive supply chain transparency brings to companies:

  1. It builds the brand.

Proactive, aggressive transparency meets demands for responsible practices. It demonstrates the integrity of their operations with trustworthy data. This keeps consumers informed and benefits the company by building a stronger trust relationship between shoppers and the brand. Bateman explains that this transparency can come in the form of:

  • product ecolabels
  • corporate sustainability reports
  • sending reports to the Global Reporting Initiative or other similar organizations
  • media outreach

 

She cites the “Track a Fishery” program, from the Marine Stewardship Council, as an example. The program makes it possible for companies to investigate and verify the trustworthiness of fisheries and seafood shipments. This also allows companies to put a certified label on their products confirming the company’s participation in this program.

  1. Transparent supply chains reduce risk.

Transparent practices ensure supply, stabilize and improve vendor relationships, and provides greater visibility for those tasked with risk management.

Bateman uses the cocoa business as an example for this second point. She notes that, “poor wages, high costs and low plantation productivity” are the culprits for many farmers exiting the cocoa industry, which causes supply problems. The solution: cocoa buyers are bringing in training programs for farmers and increase prices paid to ensure stable long-term supply.

  1. Efficiencies offset cost.

Yes, the cost of implementing meaningful traceability discourages companies from embracing it. But increases operational efficiencies can offset these costs, Bateman says. Transparency means greater visibility. Greater visibility means that the company has more intelligence. It not only makes decisions to eliminate problematic ethical situations, but the transparency also allows the company to make better decisions in all of its operations, which will certainly boost the bottom-line.

Bateman offers a few specific examples of potential operational efficiency: “eliminating steps and actors in the supply chain, verifying the efficiency of practices upstream and smoothing price volatility by working directly with suppliers instead of using middlemen.”

She cites the improving coffee industry, which has been putting these practices into place, as proof. And, of course, the Internet of Things also gets a mention. Genetic food markers, RFID tags, and mobile phone compatible barcodes are examples of IoT. Such technology can make detailed transparency attainable.

Governments tend to exhale regulations as humans exhale carbon dioxide. Instead of waiting for the inevitable, Bateman urges companies to get ahead of the curve and be proactive. Taking action when no one is yelling at them to do so will also give companies more control over when and how they execute their transparency efforts.

The Example of Nordic Countries

There is one corner of the supply chain planning industry in particular that provides a fascinating example of proactive transparency: the Nordic countries. What makes it especially fascinating is that it is a natural extension of their culture.

A recent SupplyManagement.com article by Nick Martindale described the Nordics as the place

“where it’s cool to be responsible.”

Martindale explained it this way: “Culturally, this is a part of the world where corporate social responsibility (CSR) – including both environmental and ethical aspects – is particularly important to governments, the general population and organizations. Consequently it is a strong area of interest for those working in procurement functions.”

This deeper concern flows directly from Nordic culture into how they execute business deals. As Martindale’s article notes: Finland, for example, still allows handshakes to signify a commitment and conclusion to a business deal.

But just because it’s a part of their culture doesn’t mean the job is easy either. Per Hill, the chief procurement officer at Getinge Group, a medical care company, admits that the auditing of international suppliers can require plenty of burdensome work. But he insists on it: “…we’re looking to buy more from low-cost countries and have to be aware of why they’re low-cost countries, and make sure they are not infringing our supplier code of conduct [i.e. ensuring that there was no child labor involved or other ethical issues].”

In the Finnish timber and plywood business, Jani Riissanen, the chief purchasing officer for Metsä Wood, explained to Martindale that they must ensure that their core material (logs) do not come from illegal sources.

Given the remote locations of these Nordic countries, many materials must be sourced from outside. It’s therefore even remarkable that they proactively embrace a culture of transparency when their geographic location makes such policies less convenient.

However, these companies enjoy strong relationships built on trust — whether it’s with a customer or with a vendor — as a result.

Avoiding a Culture of Non-Transparency; Embracing Visibility

Pursuing a deeply embedded culture of transparency as the Nordics have done not only reaps benefits, it also protects companies from a different culture: the virus-like culture of non-transparency. If such a culture is allowed to fester unchecked, it inevitably leads to blow-ups that eventually find the light of day.

A recent example of such a blow-up can be found in this UK headline: “Sunshine Rule to Force NHS Staff to Disclose Gifts and Hospitality from Drug and Equipment Suppliers.”

England’s Health Secretary Jeremy Hunt used the T-word when he made this statement in wake of the NHS scandal:

As with so many issues in the NHS, the answer is greater transparency. These tough new rules will for the first time expose improper relationships between staff and pharmaceutical companies. Only those serving their own self-interest should have anything to fear, with patients and taxpayers set to benefit.

When the culture of non-transparency takes over, it tends to encourage individuals within the organization to prioritize self-interest above all other values. That kind of me-first culture eventually blows up in the company’s face.

Swimming Against the Current: A Few Parting Tips for Greater Visibility

Human nature, in its default mode, tends to be reactive rather than proactive. This characteristic can certainly become the defining posture of a company as well as we do the minimum and only take action when outside forces cause us to react. However, research suggests that proactive transparency — i.e. measures enacted by a company’s free will to promote a culture of transparency — can bring a tangible boost to the bottom-line.

Stephanie Miles, the Senior Vice President of Commercial Services at Amber Road suggests these three tips for greater supply chain visibility:

  • quick access to global supply chain information
  • proactive supply chain alerts and the ability to manage by exception
  • efficient collaboration with global trading partners

Miles summarizes it well: “This type of visibility is more than tracking and tracing on the transportation leg. It’s following a product concept and subsequent purchase or sales order from design to final delivery, with all the compliance and finance steps along the way.”

Contact us for more helpful, relevant insights about supply chain planning and to learn about our software solutions that will boost your company’s efficiency.


The Worst Advice We’ve Ever Heard About Demand Planning

It is no secret that demand planning is a process that many businesses go through to remain successful. It allows for the creation of forecasts that will help the business manage their inventory levels. This is beneficial because the business can then use this information to align their inventory levels along with the fluctuation of demand that is placed on a particular product.

Because it is so important, there are multiple strategies that businesses can rely on when it comes to demand planning. As with all other types of strategies, some are better than others. There are also those strategies out there that wind up working against the company instead of for them. When you are choosing your strategy, be sure to avoid these instances of bad advice.

You should use one Strategy for all your Products

There are actually several factors that go into deciding the best strategy to use for any given product. Business leaders should examine things like geographical location as well as the industry in general. While this information may be consistent between some products a company offers, there are also times when each product should be treated individually.

Trying to place all your products into a one size fits all kind of model is dangerous and will not provide the right type of information that is truly valuable. Instead, you should always look at your products individually in order to determine what the true demand for the product will be in the near future.

You should think of Demand Planning as if it were a Program

This is a trap that many businesses fall into. Oftentimes, we tend to look towards the future and wish that we could speed to success instead of going through the process. This is the same issue in some companies that are looking to implement demand planning. They are focused on getting it up and running quickly.

Instead of taking this approach, it is always best to focus on creating a demand planning project that is ran well. While we all want to begin being successful quickly, demand planning is something that should take some time to implement. It is not a program that has certain steps that you must follow in order to be completed. Take the necessary time to carefully analyze the information that you are receiving so that you can gain the best amount of quality data. This will allow you to make the best decisions in regard to your inventory.

If you Plan correctly, you won’t have Surprises

Planning is an important part of the entire process. But, no matter how well you do plan, there will always be something that occurs unexpectedly. To help balance this, you should always have a backup or contingency plan. The most important thing to remember is that there will be surprises and that you must plan for every scenario possible.

In order to plan for surprises, always make sure that you are in a position that makes you flexible. For example, you may find that you need to have a plan to find alternate materials than what you normally use to create your products. Having this plan in place and being able to execute it quickly can help you to manage the times when supplies are out of stock or limited from your traditional supplier.

Don’t Put your Faith in Statistics

Statistics aren’t really all that exciting. However, they definitely have their place in the business industry. In fact, most businesses out there aren’t really using statistics to the best of their ability. Instead, they simply glance at the numbers and carrying on with their daily lives.

Statistics are very powerful. Businesses who have the ability to drive the company towards improvement are those that are the most profitable and successful. Also, when you rely on statistics to make changes to your demand planning strategy, you will find that it is extremely easy to measure the value that is added from your changes. So, along with your forecast information, be sure to review statistics that are related to your industry and your products when making changes to your strategy.

Your Plan should be complicated in order to provide the most Value

Some mistakenly believe that in order for something to work the best way that it must be complicated. This couldn’t be further from the truth. In fact, demand planning will work much more efficiently if you are able to keep your processes and strategies simple.

The most important thing with any demand planning process is that the strategy that you choose is geared towards your specific company. Take a look at the amount of support that you will need as well as the amount of information that is already available. You can then choose a strategy that will help work with your company in the best capacity.

Focus on only one Product at a Time

It is true that you should look at each product individually. However, it is also true that you should focus on all your products rather than just one or a handful of your most popular items. You never really know what you are missing with other products when you choose to rely on this method. When a company only focuses on certain products, they may find that their success is not as great as they had expected.

Instead, you should take more of a 360 approach when it comes to demand planning. Look at the various elements of your entire business and look for changes that you can make to improve each of them. Some companies have found that by making some simple changes with some of their lesser performing products that they were able to greatly improve the success of the entire company.

Final Thoughts

Demand planning is critical for companies that are looking to create historical sales information. With this type of information, forecasts can be created that reflect the company’s customers as well as statistical information about the company as a whole. This information can then be used to collaborate with the customers in order to create products that will appeal to them and that will be available when demand is high.

There are plenty of things that a business can do incorrectly when it comes to demand planning. For this reason, it is always best to rely on a specialist to help with the goals that your company has in place. Choosing a partner for this venture is something that you should consider if you are looking to truly gain control over your inventory and the demand for that inventory.

When choosing a company to help you with this mission, be sure to choose one that has experience within your industry. You should also look for a company that takes the time to learn about your company and what is most important to you. This type of company will be the best option when it comes to receiving the value that you deserve to receive.

To learn more about MaxQ and what we have to offer to our customers, be sure to contact us. With our solutions, you will find that your business is able to receive all the information that it needs to rise to the top.

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The Latest Supply Chain Planning Trends: A Round-Up of Recent Industry Changes

Supply Chain Planning

 

Depending on who you ask, the global economy has hit a bottom, and it’s on the way up or it has already peaked and it’s on the way down. No matter which view you have of the macro-picture, one thing is certain in the finer details of supply chain planning: although there’s a striking mix of the very good and the very bad, depending on the industry, everyone is being forced to adapt. As the actions of these adapting companies become clearer, noticeable trends are beginning to develop.

A Trend Toward Urban: Fulfillment Centers Moving to the City

Real estate developers in the logistics arena have seen some good times lately. Demand and imports in the US continue to grow, and e-commerce continues to fuel activity.

What’s interesting, however — and what has been exciting for them — is the growth in urban sectors. While the huge fulfillment centers in the remote locations far from cities are still critical, retailers and distributors are supporting the rural locations with smaller fulfillment centers in urban areas. Research reveals growing demand for locations under 200,000 square feet in dense urban areas.

Amazon has been a textbook example of this new trend. As this September 2015 article from Supply Chain Digest explains: “Amazon and others often find space in old industrial and warehouse areas within a city, and generally need few of the amenities companies look for today in traditional DCs, such as high ceilings and modern layouts. Location is the chief attribute these distributors are seeking to support so-called ‘last mile’ delivery.”

In the case of Amazon, they began this small service center experiment in London in 2013. It worked exceedingly well, and they launched the same strategy in the United States soon after. As noted in the Supply Chain Digest article above, Amazon already has 19 such urban centers as of June 2015 with more on the way.

Crisis in the Publishing Industry and How Publishers Are Switching from In-House to Third-Party Logistics Providers

Publishing has been wading through a crisis ever since the e-book hit the markets and redefined what “book” means. Now that years have passed since the late 2000s when the sea-change began to take form and noticeably affect publishers, what this crisis means for the supply chain has taken a more observable form. The new publishing paradigm has emerged. Publishers have realized that the usual fixed pricing model and the familiar system of publisher owned and operated warehouses is no longer ideal. The use of variable pricing models and, as bound paper inventories diminish, the switch to third-party logistics providers are rewriting the supply chain story.

McGraw-Hill Education is a recent example of this new dynamic as a recent August 2015 white paper from Supply Chain Management Review observed. The publisher worked with a third-party provider (GENCO) to accomplish four major goals:

  1. Mitigate risk
  2. Transfer assets
  3. Establish a variable pricing model
  4. Build a flexible platform

 

  1. Risk

McGraw-Hill’s risk was two-fold: a large supply chain workforce and excess warehouse space for an ever-shrinking inventory.

What was heartening for the employees, however, was that they didn’t lose their jobs. Their positions were transferred to the third-party logistics provider — same job; different boss. The transferred employees were then placed in a consolidated warehouse system that used Lean principles to obtain the highest efficiency.

  1. Assets

McGraw-Hill’s long-term leases were near their end dates. The third-party provider transferred the real estate assets, took over the leases, and made more efficient decisions with the excess space.

  1. Variable Price Model

McGraw-Hill, through the third-party provider GENCO, needed to change to a variable pricing model that could bring in new streams of revenue. GENCO’s solution was surprisingly simple: re-purpose the excess warehouse space by leasing it out to tenants, even if those tenants were competing publishers. Instead of unavoidable losses, the unused space became strengths that helped stabilize McGraw-Hill.

  1. Flexible Platform

The third-party provider had a large network of distribution centers that McGraw-Hill could use. This flexibility and access to large amount of resources without taking the risk was exactly what McGraw-Hill needed.

To summarize all of it in one sentence: today’s publishers must trim the excess weight of fixed, in-house systems and transform themselves into lean, agile operations that can turn on a dime as the industry continues to change rapidly.

How China’s Decline Will Hurt Asian Parts Suppliers

Asian electronic-parts suppliers are nervous, to say the least. And there are three reasons for that: China’s devastating downturn, the evolving smartphone industry, and the frighteningly volatile market.

In a recent September 2015 article from The Wall Street Journal — as quoted by Supply & Demand-Chain Executive — a severe slowdown in China’s smartphone market is sending ripples through the supply chain: “World-wide sales of smartphones grew at their slowest rate since 2013, research firm Gartner said this month, with sales in China falling for the first time in the second quarter.”

Samsung Electronics Co. and SK Hynix Inc. will certainly feel the burn. Many smartphone devices use the memory chips of these companies to store data. And other companies higher up in the supply chain, like Fanuc Corp. and Tokyo Electron Ltd., have already lowered their sales forecasts for the fiscal year that ends next March.

Aerospace and Defense Supply Chains Still Trying to Figure Out Wearables, Analytics, and the Internet of Things

As Supply Chain Quarterly noted recently in a September 2015 article, digital technology is still in its infancy in supply chain planning. It’s ironic, really. As covered in the fascinating new report from Accenture — “Are You Playing Ramp Up Roulette With Your Suppliers?” — industries with incredibly advanced technology (aerospace and defense) are still rookies in their use of digital technology in supply chain planning.

Upon first look, the numbers in the report seem promising, especially in the use of analytics:

Three-fourths of respondents [in aerospace and defense] say they have either implemented or plan to implement analytics for supply chain execution…The use of mobility tools, such as tablets, wearables, and other personal devices, is also increasing, with half of respondents planning to use or already using them for supply chain execution. Cloud-based technology, currently used or planned by 34 percent of respondents, also shows great potential for the aerospace and defense industry.

But the report makes this conclusion: the aerospace and defense industries are “still challenged by a lack of transparency and weak collaboration.” There is still great potential for improvement, and Supply Chain Quarterly suggested a few great ideas to start: “analytics and simulation of products could be used during development and testing, and wearables could help companies conduct virtual production inspections.”

Meanwhile, other industries are already finding powerful ways to use digital technology. Take the Internet of Things, for example; as InboundLogistics.com writer Udaya Shankar explains, companies are using RFID chips in pallets that are linked to a device integrated in the shipment vehicle to provide crystal clear in-transit visibility. This sends vital information to the company — GPS coordinates, weather conditions, traffic conditions, departure and arrival times, the driving behavior and speed of the driver — that adds many new capabilities to supply chain planning.

As Shankar observes: “Combining real-time sensor data with environmental data can provide intelligence of higher order to all the stakeholders in the ecosystem.”

Contact us for more helpful insights about the current trends and future of Supply Chain Planning.

 


Statistical Forecast for Better Demand Planning

Using a statistical forecast as a starting point often proves to be a solid start to a collaborative Demand Planning process. First, why do companies forecast? There are several benefits of more accurate forecasts;

 

  • Improve customer service levels.
  • Increased sales.
  • Reduced cost of carrying inventory.
  • Improved cash flow projections.
  • Production smoothing (level loading).
  • Reduced employee costs.
  • Increased return on investment.

In basic terms, all manufacturing/distribution companies want to do the same thing. They wish to have the right stuff in the right place, at the right time. So then is it better to use a statistical forecast or one made by a person? Well, a statistician would call this a choice between statistical and empirical estimate. The statistical forecast gets generated by software that calculates that forecast strictly by applying statitical techniques to the sales/booking history while an individual or a group of people uses judgment to formulate a collaborative forecast.

So then, how does the statistical forecast fit in a collaborative process? Some experts recommend using a statistical estimate as a starting point rather than asking someone such as sales person, to create a forecast from scratch. This statistical forecast, should not be the final answer; rather it is the starting point of that collaborative forecasting process. It’s a great input to start cross-functional demand planning.

Another question that people ask is; are there other cases where we should not use a statistical forecast? And the answer there is yes.  Any product that its history is not indicative of the future cannot use statistics effectively. Items that can be considered fads are particularly hard to predict. Many companies that have forecast increasing sales based on past sales trends for items that were a fads. They get stuck with inventory that can possible bankrupt a company. Remember the Atkins diet craze from a few years ago, Atkins Nutritionals went bankrupt after being to force to throw away millions of dollars of inventory.

New products, for example, pose a challenge for statistical forecast in that there’s no history, in this case, we suggest using a similar or like product, to model the projections for that new product.

Short life cycle products can also be a challenge because there’s a little history, and little history does not yield strong statistical forecasts. In other cases, volatility of historical demand can result in unstable or unusual trends that do not have any statistical correlation. And finally significant changes in demand patterns caused by acquisitions or other either company or external events can drive unreliable forecasts.

In summary, a statistical forecast can be an excellent tool but should not be the only method used to create an accurate forecast. Need more information and help? Then contact us and we will give you the best advice.


7 Great Benefits of Vendor Managed Inventory

 

Vendor Managed Inventory

Vendor Managed Inventory, or VMI, is a business relationship where a manufacturer or distribution business takes over management of inventory for a retail or wholesaler. Using Electronic Data Interchange (EDI) or other electronic methods for communication, the vendor of the product will manage orders and fulfillment for those further down the distribution chain.

VMI: Managed vs Consignment

There is significant difference between managed and consignment sales types of VMI, and some similarities/differences which merit further discussion before we look at the benefits of VMI management. Consignment is where the vendor retains ownership of the product until the time when it is sold to the end user. When the inventory is sold, the retailer takes a commission of the price and sends the rest of the money back to the vendor, as payment.

VMI can be used with consignment products, but does not have to be. VMI can as be used as “Managed”. In this case, the goods are sold to the retailer at the time of shipment, but the vendor manages the inventory levels at the customer’s sales location. The Vendor does not wait to receive a purchase order to restock; the vendor handles replenishing the inventory to maintain optimal sales. In some VMI relationships, it means the vendor creates and maintains the displays at the sales location and stocks them to make certain they are full.

VMI is dependent upon having the right software and the right relationships with customers. Since communication between customers and vendors is essential to a successful VMI system, the right software will need to facilitate communication via the cloud to increase access and communication.

 

Increased Customer Service

Perhaps the most important aspect of VMI is the improved channel communication. Manufacturers, distributors and retailers/wholesalers have to build communication systems utilizing advanced software.This provides both you as the vendor and your customers with information necessary to operate a VMI system. Additional results from increased communication and cooperation are better customer service, improved quality, reduction of costs and increased sales.You improve your customer service by accurately and swiftly responding to your customers’ needs.

Better Planning

To establish a proper VMI relationship, you must have access to a significant amount of data from your customers, including POS and inventory adjustments. This data provides you the information necessary to create an optimal inventory management plan. Additional uses for this information include order management, income planning, parts and supplies planning, HR and more.

Rather than guessing how much product a customer will need based on intuition or limited information, VMI gives both parties the right information needed to optimize the supply chain.

Strategic Business Alliances 

VMI benefits business relationships between more than just you and your customers. Distributors often take part in a VMI relationship, increasing the accuracy and efficiency of your inventory management while decreasing the costs. Often a distributor will receive the same sales data the vendor does and then optimize the inventory at the customer site to reduce costs to the vendor and to decrease turn-around time when the customer needs new inventory.

Additionally, the same system of communication built with your customers can be used to build relationships with your suppliers to increase your use of JIT inventory in your manufacturing processes. While any business relationship needs to be entered into with caution, the systems that businesses need for VMI facilitate much stronger business alliances across the entire supply and distribution chain.

JIT Inventory

JIT stands for Just-In-Time. JIT, focuses on only ever having enough inventory on hand to meet current needs. The amount of inventory needed depends on your product type, how fast it will move off the shelves to consumers and how long it will take to produce more. Because of the complicated management systems required, JIT inventory management has only recently become affordable options for businesses because of the advances in the cloud, IT speed and storage and business systems.

Your customers want to utilize JIT inventory to get the most out of their physical space and reduce costs to their business. With VMI, you establish JIT inventory levels for your customers and produce according to that need. You see their sales and inventory levels and now have a better insight into their need.  This has tremendous advantages for manufacturers and warehouses as well as for their customers. Leading to much better forecasting for the vendor, inventory levels can be really optimized for both parties.

Variation from Franchising

For many businesses, the advantage of franchising is maintaining control of parts and inventory down the distribution chain. Napa Auto Parts has consistent pricing, inventory and displays for all their manufactured goods, no matter the location. This is just one of the major advantages of franchising. With the increased communication with your customers through VMI, you have the opportunity to build quality control into your relationships with your customers. This means that you can have a hand in marketing your inventory to the end users of your product, not just the other businesses in your distribution chain.

Advanced Forecasting

Accurate forecasting requires data. The more data you have about sales results, the more information you can infer about customers, about seasonal trends, about the demand curve and your product life cycle. With historical data and an understanding of the causes of trends through common sense and experimentation. A spike in car parts from May-September could be caused by summer travels, for example. With the large amounts of data gained by using a vendor managed inventory system, you can improve accurate forecasts of the most likely scenario for increases and drops in demands. This aids long-term strategic planning and short-term order fulfillment.

Reduction of Sales Costs

Storage adds significantly to the costs of your product.  You incur costs to store inventory waiting for an order, your customer also incurs costs storing inventory waiting for a sale, you have collectively added significant costs to each item sold. Whether this cost is visible or not, it is there.

These 7 benefits show that with the right IT and communication, Vendor Managed Inventory is an excellent way to increase your customer service offerings, whether you are a manufacturer or a distribution company. Integrate VMI to build relationships, improve quality of product delivery, increase income and decrease costs.

We offer complete warehouse management solutions that integrate well with any VMI system you may put in place. Contact us today to see if our WMS will work for your business’s needs or for more information about business systems to improve your bottom line.

 


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