Every year, for the last 57 years, the Premier’s NSW Export Awards have honoured the achievements of outstanding exporters in New South Wales.

In the face of unprecedented challenges, NSW exporters have shown remarkable resilience – and these efforts deserve to be recognised. In 2020, NSW Government used the awards program as a platform to recognise and promote stories of resilience, perseverance and pivoting under pressure in the NSW export community.

Businesses present in this room were selected among the pool of many as the most inspiring business stories of 2020 from across NSW – the tales of innovative businesses, quick-thinking pivots and determined business leaders. From regional to metro, exporters big and small, goods and services.

Export Council of Australia believe—and have always believed—that Australia and NSW’s future prosperity can only be guaranteed by an economy that is open, outward-looking and internationally competitive, backed by businesses of all sizes that can and do engage internationally. 2020 Was a challenging year for many NSW Exporters, but as witnessed by this program, many have not only survived, but thrived.

With this roundtable, Export council of Australia discuss important questions: How was your business impacted by COVID-19, what did you do to overcome it and what does the future look like, as well as what can the NSW Government do to help you expand internationally?

Prophit Systems build and deliver supply chain solutions that allow sizeable manufacturing companies to dramatically improve their operations. Their systems allow their customers to navigate their processes with true foresight, showing where choices are to be made in the supply chain, and the instant cost and consequence of these choices. They consult, audit, immerse, install, train and customise these solutions generally on site, and teach their customers how to best manage their supply chain priorities as a team.

[Austrade article excerpt ]

Prophit Systems developed a way of remotely delivering its supply chain solutions, and built a global reputation as an industry leader.

Based in Sydney, Prophit Systems delivers supply chain solutions that help manufacturing companies worldwide run more effectively. When the pandemic hit, the business could no longer deliver its services onsite, which included auditing, training, customizing, and installing solutions.

Prophit Systems had also just signed a deal in the Philippines, which it did not want to lose. So it needed to design a new way of remotely installing its solution and training staff in a new country.

“If we didn’t develop a new method fast we would lose the new order and that would have hurt,” says Tim Gray, Founder and Managing Director. “This was our first opportunity to enter the Philippine market.”

Staff worked long hours and used online tools to quickly adapt to the new normal. They have now remotely trained more than 100 people to use their supply chain solutions.

“We are very proud of implementing a complete planning and scheduling system in a factory we have never stepped a foot inside,” says Tim. “The implementation was a complete success and is our new model moving forward.”

Meanwhile Tim became known in the media as the go-to supply chain expert. This has led to several exciting opportunities, including presenting to NASA.

“We are proud to be a privately owned Australian business that is now being recognised as having the best supply chain software and systems in the world,” says Tim.

Advice for other exporters: “We Aussies are open for business! If you stay focused on delivering quality solutions to serve your customers impeccably, you can overcome obstacles and achieve greatness in your field.”

https://www.export.org.au/global-trade-updates/fifteen-nsw-exporters-recognised-as-top-resilient-exporters-of-2020

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We have already seen the first wave come through, wiping out the travel and tourism sector in a heartbeat, whilst crippling thousands of businesses across the country.

One area in which this virus has struck has been at our capacity to have product to sell, with a recent survey from the Institute for Supply Management revealing that 75% of global product supply chains have been impacted by COVID-19.

The virus has delivered a stinging lesson to those manufacturers and distributors who are able to survive, that they must change how they have done business in the past to protect their supply chain in the future.

• – They must source geographically separate suppliers for their critical materials and products
• – They must have processes in place to ensure those suppliers are nurtured with enough regular volume to remain engaged and responsive

Of the many businesses I have talked to recently most have been distracted with needing to mobilise their management team to work from home, respond to their boards demands to cut all spending immediately, and their customers’ demands for continuity of supply.

In short, most businesses are scrambling!

This has created opportunity for businesses that are able to adapt quickly to the constantly changing global situation.

One of our customers who makes the aluminium beverage cans for the Australian beer and soft drink market has been one of those quick adapters.

With the whole family home every day of the week, Australian families are buying more cans of drink than ever before, with Australian breweries now switching production from kegs to cans, as the sale of “Quaran – tinnies” goes through the roof.

All of this has pushed demand for aluminium cans up to look more like Christmas holidays than a typical April, proving that in every crisis, some win, whilst many others lose.

Through frequent demand reviews our client has been able to adjust their forecasts as do their customers,to meet the demand of businesses such as Lion Nathan, Asahi, Coca-Cola etc.

With the Alcoa plant at Point Henry closed, the beverage can market has had to source their aluminium from overseas, from locations geographically diverse as China, Africa, Malaysia, America and Saudi Arabia.

To manage the complexities of supply from different regions, lead-times and price rebate structures requires monthly supply planning reviews, where you can clearly see how much volume each mill is getting, and how that will impact their overall prices.

Managing global supply at this moment is as volatile as I have seen in my 30 years of manufacturing experience.

Whilst China is beginning to ramp back up to full speed, other parts of the world are in lock down, with uncertainty on when full or even partial production will resume from all corners of the globe.

Australian businesses that are still operating are finding themselves in a weekly, and at times, daily dance with their latest supply and demand information resembling an out of control Rhumba.

To cope with the constant changing supply patterns and the unique difficulties in importing product from regions such as Africa, these businesses need to understand instantly and confidently how much extra demand they can service, what their response measures will be if demand surges further, or if other supply lines become disrupted.

These companies had not boxed themselves into one supply line, they have been creative and right now it is paying off for them.

Running out of toilet paper due to panic buying was slightly amusing and I like most laughed at the many memes poking fun at the hoarders, and with 18-month supply of 3 ply in the community, there must be sheds full of the stuff.

What I did not find as amusing was the same panic buying of Ventolin, a life-saving medicine for asthma patients, which left chemists with no stock and no notification of when they will get more.

This medicine is made at the GSK factory in South Carolina, and with a spike in worldwide demand for the drug, has left the limited source supply line unable to respond.

It is my view that the lesson businesses will have learned from this crisis is that we have hit the peak of globalisation and will post-virus stand on the cusp of a renaissance in locally sourced supply.

Only last week the South Australian and Federal governments awarded an Australian packaging company a contract to make 145 Million masks for use in Australian hospitals.

This is a new product range for Detmold, and with some capital equipment installed in their Brompton factory, will see 160 jobs added to the local community.

I applaud this contract and expect to see that as the dust settles on the COVID-19 crisis that more businesses will be aware of the importance in having reliable and responsive local suppliers that can help assure the needs of our community are served.

By including local production in your supply chain solution, it will not only create jobs, help reignite the economy, but will also help future proof you from the next time the world shuts down.

Tim Gray, Managing Director, Prophit Systems.

Connect with Tim on LinkedIn

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“The dream is to have interoperability between networks. Why is it needed? Business leaders now manage a value chain, not a simple supply chain within their four walls. They need interoperability between networks and technology applications. They know that a traditional focus on standards and integration does not work.

The elephant in the room is interoperability. There is friction in the process of data exchange. Investments in ERP are not the answer.” ~ Lora Cecere, Founder of Supply Chain Insights

Interoperability, one of the most difficult and pressing challenges and opportunities as Lora Cecere pointed out. It can be the Achilles heel that prevents progress or can be the special sauce that will enable the hype to deliver value digital revolution / Industry 4.0

“But because data is arriving from many different sources — suppliers, transporters, warehouses, distributors — quality and interoperability of the data is critical, and still a significant technological barrier that a wide range of companies are working on.” ~ PwC

Our industry’s traditional culture is competition, not collaboration. There exist a host of reasons why implementing network interoperability successfully is considered difficult.  Lack of consistent data standards, system incompatibility, to the cost perspective, designing the network architecture for interoperability implies the willingness to accept the complex set of benefits and associated liabilities. And the market and regulators are far from starting any work on it. Although significant strides have been made to support interoperability, the widespread adoption of standards to date has been slow, due to the challenging complexity and the fact that many of the legacy business models are based on closed systems and data capture rather than open digital ecosystems.

“Adding to the challenge is the disincentive today’s technology “giants” (e.g. Google, Apple, Microsoft, IBM, etc.) have to create interoperability, in which open standards undermine the competitive advantage(s) they are each trying to create. Each of these companies has big dollars and big plans supporting their individual, proprietary operating systems, equipment, and protocols. To build bridges (standards) with other systems inherently lessens their differentiation.”

This challenge is underscored because those companies in whom consumers are already invested are likely to maintain their walled gardens. “We have an Apple Internet of Things and a Google Internet of Things,” explains Rachel Kalmar, Data Scientist at Misfit Wearables. Instead of opening infrastructure horizontally, the giants are only contributing to its fragmentation by creating vertical stacks of integrated products.

“The vision is that connectivity between people, processes, and things works no matter what screen type, browser, or hardware is used. The reality, however, is that the IoT is fragmented and lacks interoperability; disparate or overlapping solutions can’t easily “talk” (connect) to each other.”

“Visibility as a topic is confusing. Technology vendors have conflicting definitions. The current state is pretty Powerpoints with hollow words bandied about in sales cycles. It is messy. As shown in Figure 1, currently there are large gaps for the line-of-business user. Despite the advancements in B:C processes, we have made little progress in the advancement of B:B processes. Most hang on the back of 40-year old Electronic Data Interchange (EDI) processes.”

For the industry, the larger elephant is “What is the Return on Investment?” While companies know that they need to conquer this hurdle, they are hamstrung. Process innovation with new technologies is hamstrung by the need to show a definitive ROI.” Lora Cecere, Founder of Supply Chain Insights

Take the healthcare industry’s interoperability challenge as an example. “You’ve got Fitbit, Apple Watch, all of this consumer tech collecting data on your blood pressure, heart rate, etc,” said Forde. “Then you go to the hospital or your doctor and they have their own system. You see the allergist and they’ve got their own system, and none of it is connected. If there’s no interoperability between any of these systems, how are you going to get the best possible care?”

Reducing barriers to information flow would benefit not only consumers but also other actors in the supply chain, such as producers, retailers, distributors, and certifiers. Well-known benefits include, for example, reductions of costs of coordination and increased flexibility (Clemons & Row, 1993).

Everyone is talking about how to realize Industry 4.0. We have got blockchain, IoT, cloud computing, all of these very promising smart technologies, yet we have the challenge with interoperability and it will only grow as the latest smart technologies generate significantly more data from a wider variety of sources.  How can we begin on the path towards interoperability? As Brian Tessier mentioned at the conference, the good news is that more and more companies and products are beginning to emerge that enable interoperability through open-source development.

“Overcoming the challenge of interoperability may be the single most important hurdle for Industry 4.0, as it is what enables the boundless connections of a connected world. More and more companies and products are beginning to emerge that enable interoperability through open-source development.”

As the challenges of interoperability finally seem to be fully understood, the huge gap between plans and reality in this field is also recognized. A major shift in organization practice and structure will require. I think we should stop talking about it and actually start achieving it.

What are your thoughts on interoperability ? Any comments gladly appreciated.

Tim Gray

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I found myself surprised and confused by a topic I felt I had a strong handle on. Having sponsored my own company’s R&D efforts in blockchain I thought that I have a deep and clear understanding of how this technology would mature and become demanded by our client’s clients.

I nearly fell over when Brian Tessier (Schneider Electric) began explaining their pilot to use blockchain to manage the process of onboarding new business partners.

I began mental flailing … “Why would you do that” … “Surely that’s the wrong tool for the job” … “What do they know that I don’t?”… By the end of the summit, it was clear to me that I needed to reframe my expectations around blockchain.

Blockchain, we have all heard about it, so what are its use cases, and what does it means for you?

When people describe blockchain as open ledgers, or distributed ledgers, it reminds me of when people used to refer to the internet as the world wide web or information super highway, but in relation to blockchain. Blockchain is the underlying technology behind all cryptocurrencies like bitcoin and ethereum, but it’s much broader than that. It has a potential of changing the way we work and communicate, making it more secure, efficient, and trustworthy.

“Why is the future blockchain? So what are blockchain’s main advantages? By performing the functions of record keepers and managers it would enhance decentralisation, reduce the amount of intermediaries involved, and provide an alternative to how value can be stored. Physical as well as digital assets could be uniquely verified online to prove ownership.

As transactions stored on the blockchain could be independently verified and traced, it would be easier to fight crime, counterfeiting and fraud, reducing systemic risk in the financial system. A distributed digital ledger would make it near impossible to change or falsify data, because data would have to be altered across all the related “blocks” in the digital chain, so any tampering would be exposed. Consequently associated costs would fall, enhancing economic growth and prosperity.“ ~ The Conversation

“Although there are multiple competing standards, the good news is, for the most part, the distribution of the blockchain mechanism, as far as the individual packages, most of them are underpinned by open source code that lived against relatively similar frameworks. They are going to be cross-compatible. This technology is so fluid, everybody could get started developing in this platform tomorrow….. You can shape the future of this platform, we stand right now for what can potentially be the next internet, so I strongly recommend you and your businesses to grab the wheel and get in…..” ~ Brian Tessier, VP of Innovation, Schneider Electric

Where are we now? In 2016, Lora Cecera facilitated a workgroup to design and test new approaches, including testing of new technologies like cognitive computing, blockchain, open source analytics, and the Internet of Things. She shared her learning summarized in four main points 1) Hard to Get the Right People to the Table, 2) Detours/Potholes and Spiraled Learning, 3) Trust Coupled with Big and Hairy Data, and 4) Need for Ongoing Education. I couldn’t agree more with the fourth point as we need to adapt to the paradigm shift.

“One of the biggest benefits for the members of this group is learning and ideation on next-generation supply chain processes. It has been fun to facilitate this learning. To spice up the discussion, I brought the smartest technologists to the table to share insights on Open Source analytics, blockchain, IOT and cognitive computing. All of these technologies are moving at fast speeds with overhyped promises. To grasp the potential impact requires a paradigm shift in thinking. Supply chain teams used to thinking in batch processes, with fixed hierarchical representations using relational database models, need to change. The world of schema on read, blockchain, cryptocurrency, rules-based ontologies, streaming data architectures and cognitive computing is all new.” ~ Lora Cecere, Founder of Supply Chain Insights

Shift in Paradigms: Lora Cecere, Founder of Supply Chain Insights

At Prophit Systems, our research with blockchains and pilot work with the Australian Government, CSIRO’s Data61 has been valuable and tangible. We have been trialing using blockchains to provide proof of sourced materials. As materials are consumed and converted we are providing metadata around the usage, yield and process conditions that were applied during processing to associate the consumed material with the converted product and its new blockchain. The blockchain ledger can then confirm the origin of materials that were consumed in the transformed material.

Being immutable this ledger system offers a positive method to confirm the origin of materials, processes, and services that have been used in the provision of products.

What are your thoughts on blockchain? Any comments gladly appreciated.

Tim Gray

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“Additive manufacturing is a rapidly-expanding field and a national strategic priority in many countries in Europe and North America. “As an emerging manufacturing process, it is a disruptive technology that will both complement many traditional manufacturing techniques, and become a major technique in the future, enabling new business models, products and supply chains to flourish,” Dr Xiaopeng Li, Lecturer, UNSW

Technology companies can provide an array of options to help manufacturers explore broader use beyond rapid prototyping and invest in the next generation of AM technologies, such as hybrid printing, multi-material, multicolored fabrication techniques and touch based user interfaces. Options range from the scanning of physical objects to modeling, designing and slicing software to the materials and printers themselves.

“adidas and Carbon are creating the next breakthrough in athletic footwear, leveraging Carbon’s Digital Light Synthesis technology to bring a new product and platform to life: Futurecraft 4D. Together, we are developing the first mass production process that makes previously impossible midsole geometries with revolutionary 3D printable materials, paving the way for custom, high performance shoes that meet the unique needs of each customer.” ~ carbon3d.com/stories/adidas

According to Carbon, Digital Light Synthesis is a breakthrough process that uses digital light projection, oxygen-permeable optics, and programmable liquid resins to generate durable products, and the Futurecraft 4D is adidas’ first application of that technology onto a shoe. By the end of 2018, adidas plans on producing more than 100,000 pairs of of shoes using Digital Light Synthesis technology, a technology pioneered by Carbon.

“Carbon’s programmable liquid resin platform uses light to create the shape of the sole, then uses heat to set it, allowing the team to create a print from scratch. In addition to saving on cost, the method also significantly reduced manual post-processing steps of traditional manufacturing. Carbon was able to develop an elastic material for the Futurecraft 4D midsole, which is stiff but resilient, creating a high-performance midsole with optimum energy return.”

“The Carbon-adidas collaboration made ten times as many iterations possible! Further, each iteration was produced with the same process and material as the ultimate product. These were not just prototypes for assessing a design’s visual appeal: We could actually test midsole performance in the design stage. In other words, Carbon’s technology makes prototyping obsolete. Gone are the days when it was necessary to prototype a product using a technology that does not allow for scale-up.” ~ Carbon

“Fully-automated 3D printing will revolutionize industrial manufacturing over the next five years. This is also reflected in figures. By the year 2030, an annual growth rate of about 20 percent is predicted for the market. This represents an increase from currently 4.1 to about 40 billion US dollars – but the biggest growth comes from production, not prototyping. Looking at the trend curve for a new technology according to the Gartner Inc. model, industrial AM will have reached its production plateau in about two to five years.”~ RENÉ GURKA, bigrep

Additive manufacturing means a greatly simplified, highly responsive, and infinitely flexible supply chain fulfills the order. The demand economy is disrupting every sector and when paired with the advent of additive manufacturing, is a true game changer for the manufacturing industry. It should be a warning sign for companies that if they don’t innovates their supply chains, they may become irrelevant as consumers will have more control of the production of their own products.

Source: Strategy & Analysis

Prophit Systems’ Multi-Echelon Inventory optimization tool “Prophit AutoStock” includes automated predictive algorithms to forecast your future requirements. Our expert algorithms identify products that should be re-categorized, allowing quick and intuitive management of all products at all warehouses, and on demand. All inventories are visible by location, cost, days cover, selling units and storage units for current and future periods. We are all prepared for the future of additive manufacturing.

What are your thoughts on Additive Manufacturing? Any comments gladly appreciated.

Tim Gray | Prophit Systems

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1. Sawyer doesn’t need to be programmed to do a task, you show it.
2. Sawyer can safely operate alongside human workers, without light curtains or guard rails
3. I was expecting Sawyer to cost $300K.  I was shocked to find that he starts at $29K

Together with Sawyer’s big brother Baxter, these bad boys are set to make a real difference in production, giving manufacturing companies a very competitive advantage.

Tractica anticipates the global robotics industry is expected to surpass US 151 billion by 2020, annual robot unit shipments will increase from 8.8 million in 2015 to 61.4 million by 2020, with more than half the volume in that year coming from consumer robots.

In 1961, General Motors unveiled Unimate, a robot that was designed to ease the production process; this was a 4000-pound robot and harbingered the use of robotics in manufacturing (Pugh, 2013). However, technological advancements and evolution of artificial intelligence and its use in embedded systems have enabled organizations to adopt and use robots in various stages of the manufacturing process (Sachs, Benzell, & LaGarda, 2015). Robots are now faster, cheaper, and more intelligent because of the amalgamation of nanotechnology and artificial intelligence.

In its report, PricewaterhouseCoopers observed that in the last decade or so, the orders for robots globally has increased by more than 200 percent, with one of the key markets being the United States and Canada. The report also indicates that the number of registered patents for robotics related patents grew past the 5000 mark in 2013 from 1000 patents in 2001. This trend demonstrates an increased uptake and use of robots in the manufacturing process. Consequently, it is important to establish the effect that this increased focus on the use of robotics in the manufacturing process has had in the industry.

With the emergence of more intelligent and cheaper robots, manufacturers have diversified their application of robots in the manufacturing process. Whereas in the past robots were limited to the most basic and menial tasks, the new robots are being increasingly used in more specialized manufacturing processes (Pugh, 2013). The amalgamation of nanotechnology, robotics, and artificial intelligence has seen the application of robots in tasks that require precision which in some instances even a human being cannot handle. For example, Carlsson (2012) observed that robots are increasingly being used in pharmaceuticals and biomedical technological manufacturing firms, where the manufacturing process requires precision and the automation of the processes has enabled firms in the industry to achieve the same. In addition, the emergence of more intelligent and dexterous robots has fostered human-robots collaboration in the manufacturing process, where robots and human being work together in the production process; robots are now socially sensitive, have near human capabilities, and can, therefore, interact with human beings (Baily, Manyika, & Gupta, 2013).

Further, the emergence of the new generation robots has resulted in cost savings in the manufacturing sector. The new generation robots are cheap to maintain and will work shifts that would have normally been handled by multiple employees, resulting in the cost of labour savings. In addition, whereas human beings are likely to miss work because of various reasons, there is no likelihood of absenteeism where robots are concerned, unless when undergoing maintenance (Pugh, 2013). Other proponents of automation or uses of robots argue that coupled with their low maintenance cost, robots present an opportunity to manage costs of doing business for manufacturers who otherwise, would have had to incur expenses such as health insurance cover, salaries and remuneration, and other personnel related costs (Carlsson, 2012).

On the other hand, robotics presents an opportunity for further growth of a previously declining manufacturing sector. Baily et al. (2013) observed that the current resurgence of the United States manufacturing sector is attributable to technological advancements such as the developments in robotics. The primary reason as to why companies outsourced manufacturing jobs to other parts of the World such as China was that labour was cheaper in those countries. Yet China is investing heavily in robotics firms around the world, while also developing and manufacturing its own robots in a government-backed, robot-driven industrial revolution. Chinese companies are going through enormous efforts and invest large amounts of capital to automate their production and shed the dependence on “cheap labour,” which is getting increasingly expensive and uncompetitive with other “cheap labour” economies. (Wolf Richter, 2016).

The sharp falls in the price of industrial robots and a steady increase in their capabilities each year, robotic automation is equalizing manufacture costs anywhere in the world against the cost of human labour. With the calling for bringing back the jobs, this could pretty much be the key. Robotic automation can, however, give the necessary leverage to high-cost countries to bring back their outsourced manufacturing. Thoughtful and clever implementation will be needed, and the timing is crucially important, and the time is …… NOW!

So what are your thoughts on robotic automation and bringing the jobs back? Any comments gladly appreciated.

Tim Gray

PROPHIT SYSTEMS

~

References

Baily, M. N., Manyika, J., & Gupta, S. (2013). US productivity growth: An optimistic perspective. International Productivity Monitor, (25), 3.

Carlsson, B. (Ed.). (2012). Technological systems and economic performance: the case of factory automation (Vol. 5). Springer Science & Business Media.

PricewaterhouseCoopers. (2014, September 9). The rise of robots. Retrieved November 17, 2016, from http://www.pwc.com/us/en/industrial-products/next-manufacturing/robotics-rise-of-robots.html

Pugh, A. (Ed.). (2013). Robot vision. Springer Science & Business Media.

Sachs, J. D., Benzell, S. G., & LaGarda, G. (2015). Robots: Curse or blessing? A basic framework (No. w21091). National Bureau of Economic Research.

Wolf Richter (2016) Why China’s Multi-Decade Manufacturing Miracle is Over

The post Impact of New Generation Robots appeared first on E-Panner by Prophit Systems.

Talent shortage in the supply chain industry is a known issue, especially with the demand for middle management positions. The rapid expansion and increasing complexity of the industry and the qualifications needed for supply chain professionals are expanding.   The industry does not have enough qualified people making invaluable decisions.

Great talent lies within every company waiting to be discovered and developed. But most of us tend to ignore this fact, or perhaps lack the sheer knowledge of it. We look outside whenever there is a need for specific skills in the organization.  As a proactive business in the supply chain management industry, you should identify and cultivate talent within the existing talent pool. Sourcing internally is better than looking outside for several reasons.

Improved employee morale and engagement

Employee engagement plays a major role in the success of an organization. Employees who are involved in development opportunities feel a sense of belonging and appreciation.  It’s a sign that you care about their personal and career development goals, and this, in turn, creates morale, motivation and greater job satisfaction in your workforce (Gill, 2014).

Boosts employee performance

Employees with opportunities for career advancement strive to achieve something more valuable and meaningful than their day-to-day work. Developing talents internally enables employees to have a more well-rounded skill set, which help enhances their performance. They become motivated, inspired and equipped to train other people around them.

Decreased employee turnover

Many companies in the supply chain management industry may see internal talent development as a gamble. If an employee resigns, the investment is watered down, and he could potentially move to a competitor. This is a mere misconception. The truth of the matter is that talent development is essential in the retention of employees. In fact, it’s a proven retention strategy that is adapted by successful companies in the industry. Employees who are appreciated and inspired are more likely to stay loyal to your company, reducing turnover as well as the direct and indirect costs that come along with it (Wilson, 2016).

Reduced hustle and cost of hiring new employees

Internal recruitment is obviously less expensive and less time consuming compared to external recruitment. It is not unusual for an external hiring process to take two months or more from the time you advertise the job to the first day at work. And the processes in between this period – interviewing and short listing candidates – are mind-numbing. Finding a candidate internally, whether to fill a new position or to backfill a position, does not require such extensive amount of effort and time.

Guaranteed success

Employees who are progressively trained and promoted into new roles are likely to achieve greater success than their external counterparts. Of course, the internal recruits will have better knowledge of internal systems and company values enabling him to take less time in settling in the new position.

Adopting a culture of developing talent within your company, rather than outside, is a great way to leverage the output of your employees, boost their morale and amplify their loyalty. You skip the rigorous process of recruitment and are rest assured of success in the new role assumed. It’s an investment with a definite ROI.

References

Supply Chain Insights LLC, Supply Chain Talent (2014, June – October)

Supply Chain Insights LLC, Global Summit Survey 2016 (2014, August)

Gill, A. (2014, November 3). Human Resources. Retrieved November 14, 2016, from The top 10 Benefits of Ongoing Staff Traiing and Development: http://www.saxonsgroup.com.au/blog/human-resources/top-10-benefits-of-ongoing-staff-training-development/

Wilson, T. (2016, May 18). Talent Space. Retrieved November 14, 2016, from The Benefits of Cost Effective Talent Development: http://www.halogensoftware.com/blog/the-benefits-of-cost-effective-talent-development

The post FINDING SCM TALENTS appeared first on E-Panner by Prophit Systems.

Agile businesses are doing the same. They are using their planning processes to predict what might happen and prepare the set plays specific to their business.

Two recent examples of set plays we’ve been involved in:
1. A customer is running promotions of certain products without giving us the desired notice. They are responding to their competitors promotions. What can we do to support their un-forecast promotional activities?
2. If customer A is successful in acquiring customer B, they will expect improved pricing. How will we respond to their requests. What will be the full impact on our business?

Developing a playbook for the year ahead is not as hard as it seems. In practice this becomes a working document. The exciting outcome of this approach is it can drag your management team’s focus from what happened yesterday, to navigating and side stepping pending issues before they became a crisis.

Step 1.
If you take the time to confirm your best estimate sales forecast, zone in on those products and customers that are performing above forecast and those that are underperforming.
Identify the major risks and the opportunities around these forecasts.
Develop a high and a low range forecast based on a number of these risks and opportunities playing out.
Step 2.
Develop action plans to address the risks and seize the opportunities as they arise.
Step 3.
Phase the action plans according to Go – No Go criteria. These became your set plays.
Empower your staff with these set plays. If these conditions occur, invoke these actions. Then let me know you have done them.
Step 4.
Review monthly, see how your sales are tracking to forecast, review your best estimate, and see how it is tracking. Determine if your corrective actions / set plays are still current and still adequate.

Successful Supply Chain’s require simply but savvy forecasting methodologies with the right collective mind set.

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A number of statistical supply chain forecasting tools advocate that they will automatically forecast your demand for you. This is a very enticing sales pitch; it implies that the software will do all the work for you. But before you turn your back on the task of forecasting and leave the software to do its thing, a word of caution:

• Statistics are a great tool for summarising and projecting subtle trends in market demand when there is continual sales history;
• Statistical tools are poor at predicting demand when the demand is lumpy with periods of no sales. (Examples: Project work, promotions etc.); and
• Statistics will not predict abrupt changes to demand such as a customer changing their artwork, or a customer moving production of a particular range of products offshore. By the time your statistical model is responding, your warehouse could already be full of items that particular customer will no longer take!

Scenario

One of our packaging clients had invested in a supply chain forecasting software solution that ‘automatically’ adjusted its forecast algorithms to seek the best fit. The sales team were delighted. They no longer had to spend their time creating forecasts. They no longer needed to talk to the customer about emerging trends or understanding the reasons for errors in previous forecasts. They now had more time to go out and sell more product.

Upon reviewing the plant performance, we found that there had been a significant increase in obsolete stock and key customer DIFOT was below expected levels.

When we attended the demand review the dynamic was interesting. Corrective actions that were assigned to resolve the stock outs, all focused on improving the statistics. Corrective actions to resolve slow moving and obsolete stock resulted in requests for the statistical algorithms to be tweaked. The business was allocating all responsibility for correct forecasts onto the systems statistical algorithms.

When we reviewed the new business, we found that sales had remained static. Some new customers had come on, but new sales to existing customers had declined. Perhaps lack of communication with existing customers was affecting repeat business.

Quick Fix

We continued the use of statistics, but we passed the ownership back to the key account managers.
Specifically we provided a portal where the account managers could adopt the statistical forecasts, or they could override them where they knew the statics were not correct, either way they had to choose the forecast they wanted. The ownership for slow moving and obsolete stock (SLOB) was again pushed back onto the account managers.

We coached the sales staff in conducting Business Review and Development (BRAD) reviews with their key customers to understand sales trends and prepare for future sales opportunities. These meetings were scheduled regularly for key accounts.

Information about pending artwork changes and promotions and other business changes that were identified from these BRAD reviews were utilised by the key account managers to override or correct the statistical forecasts as required.

SLOB dramatically reduced by adjusting the forecasts for known changes in products and lost work.

With increased customer contact, new business from existing customers increased.

The statistical tools continue to give a source of information to the key account managers , but responsibility is now on the account managers themselves to determine if it is correct.

Top TIPS

• Forecasting should be owned by those who face the customers;
• Statistics are of great assistance, if you understand their limitations; and
• Sales can use forecasts to periodically talk to their customers. This builds market intelligence and seeds customer loyalty.

Tim Gray is a supply chain industry commentator and advises several businesses across APAC on supply chain systems. He is the managing director at Prophit Systems.

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At what point should the plans of these acquisitions be included into an existing planning system?

Scenario

Recently a Prophit Systems’ client successfully acquired a segment of a competitors business, thereby increasing their market share. To keep the details confidential, only a handful of people were involved in the financial modelling, and due diligence process.

When details of the acquisition became public knowledge the information provided was sparse and only available from the company’s senior management team. This created a number of costly problems that could have been easily avoided.

When Prophit Systems was asked to get involved, the client had realised that the sales figures that they had expected were not materialising.

In order to understand the cause of this discrepancy our team needed to compare the detailed sales to the expected sales. Unfortunately, the sales forecasting only existed at consolidated levels in balance sheets. The vendor had not provided detailed sales forecasts but rather historic sales figures.

To gain insight into where the problems were occurring, we built a forecast based on the historic sales. This forecast was detailed to the SKU, location and customer (SKULC) level. Having this level of granularity enabled us to slice the forecast vs. actual comparisons by item, by customer and by location to identify where underperformance was occurring.

It quickly became evident that the underperformance was localised to one account manager and another significant customer. Once the source of the issue was identified the Sales Manager was able to get to the root cause of the problems, and take appropriate action.

Now armed with a detailed forecast the Sales Manager was able to rapidly understand how the new business was performing, and where the hot spots were. Having a consolidated forecast of their finished goods requirements, they were also able to construct accurate projections of their raw material requirements.

The company’s acquisition also saw its total product volume increase by some 40%, and this led to an increase in the overall raw material required by the new-look business. Having detailed information about the consolidated material requirements our team leveraged this information to instigate a round of raw material price negotiations between the company and its suppliers.

Lessons Learnt

1. Obtain detailed forecasts as early as possible in your M&A transactions.
   You will need this to build management targets, to help the transition and to facilitate the speed uptake of the management issues
2. Use these forecasts to chart your progress, and manage the transition of incorporating the new business. This is a risky time, where clients may jump ship. You need to manage the transition carefully.
3. Your raw material volume discounts thanks to the increased volume demand in an acquisition can be significant. The sooner the data is available to the various teams within the supply chain the earlier these discounts can be brought to bear.

The post MERGERS & ACQUISITIONS AND SALES FORECASTING appeared first on E-Panner by Prophit Systems.