Integrated Supply Chain Platform In The Cloud

Supply chain is hugely complex : from demand forecasting to supplier management to factory management to inventory management to logistics management. Every one of these "management" systems require its own software. These software often are "on-premise", which means it it hard to share globally, no mobile access, usually not real time, is hard to use, and does not integrate well with the other "management" systems.

To illustrate how separate "management" systems have to work together, here is a diagram:

A military official "demands" 40 tanks. See how that demand flows through an entire supply chain. Each box is a separate system. But these systems must work together to fulfill the demand. Cloud breaks down siloes created by the separate system, enables real time sharing and analytics. All to make sure demand is met, costs are kept under control, and all potential problems are see before they make an impact. 

Demand to Fullfill : Plan->Execute->Visibility->Manage

The ACME factory produced drones. It relies on planners to give it "marching orders". So far, it was told to make 500 drones (Factory:Plan).

The factory relays the need for material to the Supply module, which starts the process to procure inductors (Supply:Plan). Once the order is executed, usually via a P.O. (Supply:Execute), it is tracked by both the procurement and factory teams (Supply:Visibility).

The material arrives in the factory, so it can start the manufacturing process (Factory:Execute). The planners, factory, and transport are keenly interested in the progress of manufacturing, which is tracked (Factory:Visibility).

The transport team starts to plan the shipment of the 500 drones (Transport:Plan). The sooner they plan, the lower the transport cost (don't want to expedite). Once booked the 500 drones are sent to the LP to be packaged,labeled, and shipped. The focus now shifts to tracking (Transport:Visibility).

The Management layer of all the modules (Factory:Manage, Supply:Manage, Transport:Manage, Warehouse:Manage) is where analytics, vendor management, factory performance, expedite charges can be tracked carefully.

The 4 ERP modules (Factory, Supply, Transport, Warehouse) needs to have Plan, Execute, Visibility, and Manage capabilities to be able to quickly react to changes in demand.

Product Shortage During NPI

Your marketing department spent $15M to increase a burning desire for your AirD drones. Your retail partners, sales, and business analyst expect demand to exceed forecast. In particular, Kansas City is going to be hit hard.

The forecast of 98K was off. Demand has been updated to 139K units. Your WMS shows 56K units on hand. Nearby warehouses show 12K extra units in OKC, 39K extra units in STL. The logistics team can ship those over without an expedite. Good. But you are still 32K short. What to do?

Luckily, your ERP system is integrated. You can see in the Transport module that 12K will arrive in 1 day (by air), 3K more in 3 days (by truck), and 50k in 5 days (by ocean). You snag the 12K+3K units, but you are still 17K units short. Your ERP system is also integrated with the Factory MES - and with a production rate of 100K/week and ship date of 4 days away, you can snag the remaining 17K units and expedite air ship. All this is only possible with a unified ERP system.

In order to address the business pain of a product launch shortage, multiple ERP systems have to work together to alleviate the shortage. Here, the Warehouse, Transport, Factory, and Supply modules are used in unison to meet the 32K shortfall of AirD drones.

Transport Planning, Execute, & Visibility Flow

Shipping goods is an involved process, usually requiring dedicated resource to help with finding the best price that meets SLA, booking, tracking, and manage.

ACME is a factory that produces little drones. To ship the drones to both BestBuy or the customer, a lengthy transport is involved.

ACME will first work with a Logistics Provider (they will pack, label, store, ship), who might work with with Freight Forwarder (consolidates and work with multiple carriers ), who will ultimate work with a Carrier (owns trucks, airplanes, or ships).

Planning in the transport flow means finding the lowest cost while meeting the shipping deadline.

Execute in the transport flow means submitting the shipping order, receiving an ASN, and have the drones be on its way to Best Buy or the customer.

Visibility in the transport flow is the tracking of the shipment. This is possible if the carrier provide live EDI feed.

Management in the in the transport flow means tracking SLA of carriers, receiving alerts if a shipment is late, communicating electronically to a network of carriers.

Apple Key Product Release of 2015 - On Supply Chain Is Obvious

Apple recently announced the new iPad Pro (a professional enterprise version of the iPad), the Apple Pencil, and the Apple Smart Keyboard.

If you want to buy any of these, you can buy through the Apple store.But when you arrive at the buy page, you will see that it will tell you that yo need to wait 4-5 weeks!

Apple Pencil - Apple wants you to either learn or buy

Find out at the first buy screen on product availability

Apple Pencil availability is show prominently on the buy screen

Why the long wait?

   1. Apple decided to launch the product  -  despite not having build up enough inventory. Why? To beat the holiday rush. Or the first batch of product has not been built, shipped, warehoused, or stocked.

   2. Apple is experimenting with a "demand driven" buy-build-ship model, where the lead time between you clicking on buy and you receiving the product is 5 weeks. Why? Apple Pencil is "the only product in town", so buyers don't mind waiting 5 weeks. Or, Apple isn't sure of demand, it would rather build on demand... although maybe can track by iPad Pro attachment rate?

   3. Apple is still having New Product Introduction issues - design issues (can't get the freakin thing to work), quality issues (it only works some of the time), performance issues (it works, but it is laggy) supply issues (critical component is not keeping up with demand),  inbound deliver issues (parts are available but receiving them too late), outbound delivery issues (finished goods is available, but stuck somewhere)