Virtual Supply Networks Require Greater Supply Chain Visibility

In many industries, the pervasive trend of outsourcing and the global nature of today’s manufacturing operations have led to virtual supply networks whose complexity intensifies the need for supply chain visibility. The primary focus has expanded from directly controlling all aspects of manufacturing and supply management to comprehensive coordination of the entire supply chain across multiple tiers.

This constantly changing multi-tier environment makes supply chain management more challenging than ever. In the old static world, demand plans were handed off to supply chain management professionals. These managers would then develop a supply plan to meet the demand plan in the most cost-effective way. Yet supply management is anything but simple in today’s extremely dynamic environment, where demand is volatile, supply disruptions are common, and engineering changes occur at an accelerated pace.

In addition, the lack of visibility across increasingly complex, multi-enterprise supply chains makes it difficult or impossible for supply chain management professionals to effectively manage inventory costs and utilize all assets in response to unplanned events. Without the right tools, managers often find that the limited supply chain visibility they can achieve tends to be merely historical or otherwise insufficient to deal with the complexity of today’s manufacturing issues.

Transforming Supply Management for the 21st Century

Optimization-based supply chain planning systems can provide direction, but they’re not the ultimate answer. If a system can’t accurately represent every aspect of the business, it won’t generate a truly optimized manufacturing operation. Though it may help you get close, even small changes in the assumptions or model can dramatically affect results, especially at the detail level. Modeling the business accurately requires a massive level of information which is constantly changing. Shifts continually occur with not only the physical aspects of the supply chain—suppliers, items, locations, customers—but also the business rules and objectives.

The ultimate answer hinges on providing enough detail in the model that an optimization engine can approach the optimum. From there, people must collaboratively evaluate the results, because human insight and compromise are necessary to adapt to the latest business conditions and considerations.

The speed of business has greatly increased over the two decades since the first supply chain planning solutions were developed. Back then it was sufficient to run scenarios monthly or weekly, but more frequent updates are essential in today’s dynamic environment. Because no forecast is 100 percent accurate and optimization cannot provide exact answers, modern supply management requires a system in which people can create the scenarios needed to evaluate the organization’s response to reality. Human judgment and compromise are then used to select the best option from those scenarios.

Kinaxis™ RapidResponse™ uniquely meets the needs of today’s supply managers—both in terms of developing the plan and in generating swift, profitable responses to plan deviations as they occur. RapidResponse supports supply management with solutions for:

• Sales and operations planning (S&OP) support
• Capacity and constraint planning
• Operations performance monitoring and alerting
• Multi-enterprise supply chain visibility
• Engineering change management
• Inventory reduction and rationalization
• New product introductions
• MPS planning
• Supplier collaboration
• Clear-to-build
• Lead time analysis
• Cost roll-up
• Line of balance

Follow the link to learn more about the benefits that RapidResponse can deliver to your manufacturing and supply chain teams as well as the value to IT.