Global supply chains have changed more in the last six months than they have in the last six years according to John Sicard, the CEO of Kinaxis. Kinaxis is a supplier of supply chain planning (SCP) solutions. “Never has supply chain management been more important.” Despite being a supplier of SCP software, Mr. Sicard argues that “techniques matter more than technology. We have spent the last decade focused on the ‘perfect plan.’” Many companies have a metric that measures plan accuracy and these companies work, for example, to move plan accuracy from 75% to 78%. “Where is the breakthrough in that? Accuracy in planning is crucial. But equally important is agility. Legacy techniques focused on the perfect plan makes achieving agility tougher. Agility has atrophied.” But, as Covid has shown us, never has it been more important.
Mr. Sicard was speaking at Kinexions, the annual user conference for Kinaxis customers and prospects. The “Big Reveal” at Kinexions is that Kinaxis is releasing a product designed to help companies be more agile, a command and control solution. Releasing a command and control solution, what is also referred to as supply chain control tower, was not really much of a surprise. Afterall, what Kinaxis is best known for is concurrent planning. Kinaxis customers like Procter & Gamble (P&G) have been using the Kinaxis Rapid Response solution in their control towers to make their supply chains more agile for some years.
Concurrent planning links execution plans, the plan for the coming week or weeks, to a company’s longer-term integrated business plan (IBP). As new short-term scenarios and plans are created, the linkage to the revenue and profitability goals based on the longer-range IBP plan becomes instantly visible. This ability is based on a “digital twin” of the supply chain. Concurrent planning relies on a granular supply planning model. A granular supply planning model understands a wide variety of constraints, not just in the production facility, but in warehousing and transportation as well.
But P&G refers to the Rapid Response solution as one of the solutions in their control tower rather than being the complete solution. What Kinaxis is trying to do is deliver a complete solution, one that requires no complementary solutions.
What is a complete solution? For Kinaxis it includes technology, process, and human components.
- A platform approach that allows customers and partners to build out distinctive functionality important to an individual customer, but perhaps not needed by other companies.
- The inclusion of an integrated demand planning solution in the platform so that demand/supply tradeoffs can be done seamlessly. Kinaxis has been working for the past few years to build out a demand solution powered by artificial intelligence (AI). Their capabilities in demand planning were augmented this year following the acquisition of a company with an advanced demand sensing solution. Demand sensing does lead to better forecasts.
- A solution that allows for a high degree of collaboration with various departments and functions both in the company and with key partners. The collaboration is augmented based on the ability for planners and managers in different jobs to see only the information they need and to be able to easily drill down to get greater detail. Kinaxis executives talked about the significant investments they have made in improving the user interface.
- While collaboration is necessary in solving many exceptions, having fewer, but empowered participants, leads to quicker decisions. Kinaxis talks about ‘network planners’ – planners responsible for both demand and supply planning. This is a great idea. Some of their customers report that this role does speed up and improve decision making.
- The ability to begin to automate a greater percentage of the exception situations planners deal with so that planners do not get overwhelmed. Kinaxis has built a tool for a role they are calling the ‘supply chain engineer.’ The engineer’s job is to create new exception resolution business flows, using a drag and drop tool that does not require the engineer to be an IT professional. Kinaxis also believes that over time AI can potentially be used to automate more of these exception resolution decisions as well.
- Finally, they have partnered to improve their ability to detect supply chain risks. Their partner is Resilience360. Resilence360 can give near real-time or even predictive alerts on 120 different types of risks.
This is a very complete control tower solution. General release is scheduled for next summer.
No company can create contingency plans for the full gamut of risks that exist. There are black swan events, like Covid, that are going to occur that no one is prepared for. But with a command and control center, constructed in the right way, companies can use agility to mitigate the worst consequences of totally unexpected disruptions.