Supply Chain Brain - March/April 2012

into one place – RapidResponse does that for us. And having the ability to run what-if scenarios, to test some of the constraints – the fact that all of that is in one system makes it indispensable.

Q: What’s the significance of the control tower concept? Hermans: For a long time the decision was to focus on either supply chain planning or demand planning. You got really good at demand planning and forecast accuracy, in which case your supply chain doesn’t need to be quite as flexible. Or you flip it around and you don’t count on accuracy in forecast or planning capabilities, you just manage through an efficient supply chain. What Kinaxis has done with the control tower is bring those two into one application where supply decisions and demand decisions can be made in one environment and made instantaneously. That’s really the big value proposition that most customers will gladly accept.

Q: Tom, why do you say the top three challenges at Qualcomm are around responsiveness, flexibility and scalability?

Tael: Qualcomm has had explosive growth over the last 25 years. We continue to be challenged with the need to support newer products, faster. The demand volatility has increased dramatically and so our ability to support customers on ramp-ups has had to grow as well. Our supply network must be capable of meeting these rapid ramps.

We were using another planning solution, and while we were pleased with it, we were really challenged in those areas— responsiveness, flexibility and scalability. We found that RapidResponse helped us meet all three of those requirements.

Q: How are you enabling or integrating demand and supply planning at Qualcomm?

Tael: In 2007, we went live with RapidResponse on the demand side. Around 2010 we went live with supply side integration. We’re fully integrated to provide a response back to the demand planning organization with our supply commits, so they can schedule and respond to our customer’s needs.

Q: Do you do much modeling?

Tael: We’re actually using a lot of what-if planning today. It’s one of the key elements of our business process, both with our customer partners as well as with our supplier partners. We use what-if planning on a daily basis to be able to respond to unplanned supply issues and demand requests. We think it’s consistent with where we want to be tomorrow.

Q: Lalit, D&M Holdings is a collection of 12 different high-end audio companies. The disparate nature of your business model must be challenging in itself.

Panda: We have about 12 ERPs, so there was a lot of disconnected processes around sales and operations planning. We saw a challenge in executing a global S&OP process without a single source of data and a single version of the truth. What we wanted to do was integrate into one single system that everybody could access for evaluating supply chain trade-offs. Because we are in a very competitive business and have to respond quickly, we needed that capability.

Q: You say there are three priorities any company needs if it is to evolve its S&OP. What are they?

Panda: Consistency of process across the geographies and business units is one of the first steps in developing that S&OP maturity curve. Once you have that, then you must focus on key metrics that drive value in the supply chain. Then tying the front and back ends of the organization together so they all speak the same language is critical.

Q: You implemented the Kinaxis solution because you wanted to integrate demand planning processes from end to end. You see that as consistent with Kinaxis’s control tower vision? Panda: You can’t overemphasize the importance. Consider that electronics have short product lifecycles and there’s a lot of variability in demand and supply lead times are long, so to be responsive and quick to changes in market demand and be able to go back in the supply chain and assess if you have the capability to deliver and prioritize between different choices—this is critical. There is no way you can survive in this business without being flexible and responsive.

Q: Thomas, what’s the balancing act you’re most concerned with at Varian?

LeBlanc: Our customers are requiring shorter and shorter lead times for their products. And on the other side, our suppliers are trying to get as lean as possible. So while our customers require lead times of eight weeks or less, we’re getting extended lead times from our suppliers, sometimes greater than 20 weeks, for their parts. Trying to balance these and have the right parts available when needed, when the orders do come in from customers is the most challenging aspect.

Q: How do you achieve the balance you want to have? LeBlanc: We’ve entered into agreements with almost 50 suppliers, covering over 700 of the most critical components. They allow us to shorten lead times of those parts, which then allows us to be more responsive to our end customers.

Q: What’s the tool that’s enabling that?

LeBlanc: We chose RapidResponse to help us manage those agreements. It’s useful in a number of other areas as well. Now it has 20 different applications at Varian, and it touches seven different functional groups. The latest is managing our contractual liabilities.

Q: Mike, you said visibility at Lockheed Martin Aeronautics is as important as ERP or MRP systems. Tell us more.

Keltz: A world-class supply chain needs enterprise resource planning and manufacturing resource planning systems to actually keep the business going. But they don’t give you the view into fluctuations and challenges, nor do they allow you to do what-if analysis.