Similarities and Differences

Every business is unique, and every supply chain faces its own particular set of challenges. But there are commonalities: For starters, good supply chain decisions depend on good data. You can’t choose the right road using a faulty map. And when it comes to collecting and recording data for supply chain design and management, a lot of teams like to work within the familiar framework of Excel. There’s nothing wrong with that – but alone, it’s not a supply chain tool. The effectiveness of Profit Network 5 begins with an input process that’s built on an Excel template to make data gathering easy, not intimidating.

Of course, everyone’s supply chain decisions depend on different factors, so we designed Profit Network 5 to guide users through a series of basic questions that will essentially customize their data entry so that the template is tailored to the way they run their business. Different responses lead to the generations of different spreadsheets, streamlining use by not offering users options and data collections that are of no interest in their applications.

Once the data is collected, Profit Network 5 uploads it and creates a project, and this is where you start to see the real power of the tool. A project can contain many sub items, and you can run them all at once. Or if you’re in a sub-set or a scenario view, you can run them individually. This allows the user to have multiple templates with multiple sets of data to create multiple scenarios in case they want to forecast different things.

Because we take the time to know our customers’ business goals, we work these different pieces that are basically query-and-file extracts specific to each client. And when a customer is running Profit Network 5, it’s already tied to who they are, so we know what capabilities they need and have.

Useful, Customized Output

None of this matters unless the tool can provide effective analysis and deliver it clearly. That’s the beauty of Profit Network 5: When it really starts breaking down the data – and this can mean in certain instances, hundreds of thousands of rows’ worth of data that it analyzes and compiles and optimizes for the best possible cost savings – it can present the results to the client in their preferred format. This can mean exporting it in a flat file form, or something like Power BI, or Tableau, it could be a SQL server that they have, or even just in a raw format. Whatever tool you like to use to slice and dice this database, go for it: It’s all there for you. And it could even be a CSV file. These are all things our team is familiar with, and a lot of our clients are familiar with. They’re things they use every day, just like the Excel input, and that’s a key aspect.

Additionally, we’ve already developed more than 100 Tableau reports. Because in two-plus decades of doing these kinds of studies, we’ve discovered some common things that clients ask for, but there are also a good amount of uncommon yet very interesting and useful things. Ultimately, if the output is shaped for any kind of interface software like Tableau, Power BI, or even those yet to come, we can take those learned aspects into consideration to help simplify the process. We can allow a preset number of views and reports based on the most commonly viewed things, or we can deliver output in raw tables to allow the end user to come up with their own reporting.

Security, Scalability, and Support

Because Profit Network 5 is a subscription- and cloud-based solution, security is paramount. We use Vault services out of Azure to secure and encrypt information that is crucial to authentication. The client data itself is also encrypted, used in an encrypted state, stored in an encrypted state, and disposed of when the client wants to remove it.

Despite its simple customer interface, there are a lot of behind-the-scenes pieces to our tool, and even if our customers don’t need to see them, we like to explain what’s back there. In the background, we’ve got the ability to spin up multiple servers, which means we can provide a lot of options depending on how many users and how many servers you might want. You might even want a dedicated server just for a single user, depending on the needs of your particular company. It’s scalable and cloud-hosted, so there’s redundancy to go along with the security.

Most importantly, Profit Network 5 comes with…us!

We’ve talked about co-sourcing for years, and we take the concept to heart. Our support teams are always available for consulting if it means helping our clients better understand and use the tools we provide. Not every client needs network design, or planning. Some need scheduling or have interesting optimization challenges. 

Supply chain design is complex, and it needs to be resilient and flexible and reactive. We’ve spent a long time engineering solutions that meet those demands – so let’s talk about the difference it can make to you.

The post Profit Network 5: Simplifying Supply Chain Decisions appeared first on Profit Point.

Origins and Questions

We started our company doing supply chain network design, and were almost immediately frustrated with the tools available in the mid-1990s: They were both incredibly inflexible, difficult to learn and inconveniently expensive for what was essentially a well defined process. We were able to see that companies simply weren’t doing regular infrastructure work because it was too daunting: They were only doing it every three to five years, even when their real needs were more near-term.

So we asked, how do we make that work? Yes, the goal is to provide a flexible tool that’s easily accessible, and easy to make impactful changes with – but before that, if you want to give people a way to make decisions, then you can’t ignore the process. We’ll talk about the tool later, but people, process, and tools are the critical success factors, in that order. This is why we spend so much time asking questions and listening to our clients.

Simplify, Simplify

Every client’s needs are different – but there are common threads: Prioritizing what matters most when you’re dealing with a new source, expansion, or contraction, for instance. Or boosting service levels and inventory availability. Ultimately, what you have to give people is the information that helps them make decisions more quickly and on a more frequent basis in order to address near-term problems. Dealing with a constantly changing environment when it comes to raw materials and near-sourcing and a host of other factors means developing a supply chain that’s both responsive and resilient.

We begin by emphasizing the importance of making data easy to collect. We aim to make that part of any client’s ecosystem. It’s critical, because as we look at supply chain initiatives and what people are really trying to accomplish – better decisions in a more timely fashion – while a strategy might be simply explained, it’s reliant on accurate information. Strategically, they might want to make a big decision on infrastructure, something very asset-intensive or cost-intensive, like shutting a line down, or opening a new one up or adjusting transportation – but making that call requires data to inform the analysis, and the key is getting that data in a simple way.

What’s the most common tool for getting this done, in almost any organization? Excel. An awful lot of teams try to do all this work in Excel because it’s familiar to almost everyone, and they’re comfortable using it. What we’ve found is that by providing an Excel template for them to use as a data entry tool, it makes the process easier, and we get better information.

Profit Network 5 shines by simplifying that input process – it’s simple to understand what to enter, based on a series of questions for each client about the ways they handle their supply chain, and every template can be tailored to the way they run their business. 

Let’s Co-Source

Obviously, there are many tactical considerations in any scenario, but we regularly see teams wondering how to do the mid-term planning. They’re extremely good with certain strategies, and day-to-day they can schedule effectively based on customer demand or what they have in their inventory, but they’ll ask us, “How do we use that inventory and get it in place where it needs to be so that we’re not constantly reacting and expediting and turning ourselves all over just to get decisions made in the mid-term?”

That’s where Profit Point’s people come in: We utilize our expertise and experience to augment their teams through a co-sourced supply chain approach. We help them through the process and they know we’re not going away: We’re going to stick around here and do this with them, whether it’s a study or a scenario refresh, or mid-term planning, we’re here and available.

Which brings us back to Profit Network 5 and its origins. We set out to develop a mid-term and capacity planning tool of our own, make it easy to use, and pull together a team that complemented it with unparalleled insight and support. That tool has now evolved to the point where it’s available in the cloud as Profit Network 5 – and in our next blog post, we’re going to explore it in more detail. Stick around.

The post Yesterday’s Lessons Are Still Shaping Tomorrow’s Supply Chain appeared first on Profit Point.

We both agree with this opinion piece AI Maintains Buzzword Status, But Other Tech Tools Reign Supreme | IMPO (impomag.com).  That these LLMs (Large Language Models) which currently have no domain knowledge may someday be trained to have the required domain smarts seems a reasonable assumption, but until they do, they are of limited value for business folks who wish to take advantage of AI to help manage their supply chain.  The question is:  What can companies do if they don’t have the resources and/or $$$ to build their own internal AI empire in order to protect their company’s confidential information? 

The nature of our supply chain solutions is to take a larger view of the manufacturing and distribution operations, and given all the competing factors, find the best solution for the company overall.  This means setting up a digital model of all the possible (reasonably possible) ways you can run your supply chain. AI may play a role in setting up the possible ways to run the Supply Chain in various ways.  For example: Make a table of the lane costs for a data set, by reading routing guides for instance, or determine the planning level cycle times from manufacturing data, as another example.  And there could be other examples of using AI to build out the data needed to support a comprehensive optimization. But these are spot solutions to portions of the larger problem. This larger problem requires deep domain knowledge to assemble the possible ways of running the supply chain that are feasible and to pull the larger specific datasets together for optimization. Deriving that domain knowledge seems a long way off to tackle the larger supply chain design problem. 

What we have been thinking about is tasking AI to perform more simple functions such as 

• Assisting in the data preparation, such as extracting useful production rates from MES data, or determining rates for un-costed lanes, etc.
• Allowing greater non-technical access to the production and distribution plan, with the ability to ask natural language questions to explore the plan.

With these and other yet to be determined applications of AI in the supply chain, each will be building out that domain knowledge. We intend to be a part of that effort.

The impact that AI will have on the supply chain is yet to be written. It is still early days, and while the hype is abundant, and the actual AI solutions are thin, we expect that it is just a matter of time before AI clearly demonstrates its usefulness in the comprehensive supply chain design space. Stay tuned for more breakthroughs, we know we will!

The post Artificial Intelligence and Supply Chain appeared first on Profit Point.

Spinning Out of Control

As the world began emerging from the worst of the COVID-19 pandemic, we had a client which – like so many businesses – was faced with a huge amount of supply chain disruptions: Raw materials, resource capacity, and manpower were all at a premium and the client was essentially in an unsustainable sold-out situation. They’d had a very profitable operation going, and suddenly they couldn’t meet their day-to-day obligations to their customers, and they were starting to lose business because of it. They needed to take action.

Among their employees was a leader who saw value in bringing in some expertise to help them understand the opportunities for progress. Having experienced similar chaos earlier in his career, he now saw there was something he could do about it, and he wanted to provide stability for his organization and really drive it forward.

His confidence was key in earning great support from their upper management. We also worked with the supply chain and operations teams and the commercial directors to get their support to implement the vision as well. There was a lot of pain inside and outside of their organization, and we needed to work with all of these teams to develop a path forward to address it all. This was something they just couldn’t tackle amidst the chaos of simply trying to fill orders day to day. They needed to take a step back, and that was probably the most important thing we were able to help them do.

The What and the How

First, we assessed the situation: We went and talked to the stakeholders to find out where all the pain points were, and what we needed to do. We didn’t implement new tools – this was about understanding the work process and getting everyone marching to the same beat and recognizing what their collective priorities were.

Then, we put measurements in place. We didn’t just want to say we were going to do something: We wanted to ask, “What are our improvement capabilities and how do we quantify our goals?” 

So we looked, for instance, at the backlog of orders – when we started with this client, they were sold out for the next four or five months – and we helped them  slowly improve the on-time delivery. On the backlog orders, we worked on making better commitments to the customers so they weren’t continually rescheduling orders. This process also included getting them to understand that some of their customers were higher priority than others, and we needed to make sure we were running the equipment efficiently in order to maximize capacity. 

One of the keys was really assessing where the trouble spots were and putting metrics in place so we could see when they were doing better, and show upper management the progress. That’s important to the employee experience: We not only want to deliver better outcomes for their customers, we want to make sure the employees’ work environment improves so that they’re not mired in that chaos day in and day out.

Technology Comes Second

We need to emphasize that this was never about a new technology – because they weren’t at a point where it would have benefited them. They really needed to establish and improve their workflow processes first, and to get their people on-board with this effort, so that’s where we focused. Long-term, they planned to implement an Enterprise Resource Planning (ERP) system, but that was at least a year or two out. Fixing their workflow processes first will set them up for a successful ERP implementation and will enable the ERP system design to complement the workflow processes and make them more efficient.

We gave them some simple tools – more basic spreadsheets, some Access tools that they could use as a bridge to the ERP system – but we really zeroed in on the people and the processes. We identified metrics to measure progress and show improvement. Metrics are crucial as you go through a supply chain transformation: You can start off with a game plan, but you need to monitor and evaluate progress so that you can adjust the game plan as necessary to achieve your goals.

We focused on giving them structure and improving their manufacturing. When we started, they were really reactive and not utilizing their capacity effectively – they were doing a lot of break-ins and changeouts, and you can’t get back the time you lose during those. We showed them how to minimize them by doing things like implementing longer production runs to build their inventory, or changing where their bottlenecked resources were. 

That process led to even more discoveries. A couple times, we identified a bottleneck resource that actually shifted over time: First, it was an upstream piece of equipment, and then once we got that tuned up, we found an issue with a bottleneck on a downstream resource that they’d never run into before. So it was key for us to work with the operations organization to maximize the capacity of those resources.

A Continuing Journey

It’s still an ongoing journey, but we got this client to a much better place by giving them some structure to improve their manufacturing, so they worked out of the backlog and were able to improve their customer deliveries.

More than that, though, the client respects the work we did, and what they have now is a road map of both short-term actions and the value they’ll get from those, as well as medium- and long-term actions to work through. That relationship we’ve built, and the transformation we’ve helped empower – that’s the value Profit Point delivers. 

That’s the art of the possible!

The post Transforming Supply Chains: The Art of the Possible appeared first on Profit Point.

So when you start your journey with Profit Point, don’t expect a hard-nosed sales pitch for the latest technology solution. Instead, be ready for some in-depth and maybe even eye-opening conversations about your business, your goals, and your most tangled knots to unravel. What are you looking to accomplish this year, and the next – and the four or five after that? What’s in your way, specifically?

We want – and we need – to learn as much as possible about every client we work with, because it’s the only way to determine the best path forward. 

What does this look like in action? Consider the client who sought us out to help address major pain points in both their customer and employee experiences: Customers were losing confidence in their ability to get the product, and while the client’s supply chain and operations teams were trying to do what they thought was right, they didn’t have the proper work processes in place to deliver. 

Tapping into the Knowledge Base

So we came in and started with questions and interviews. And not just with the supply chain people – we talked with employees across the range of internal organizations, all the way out to the commercial teams. Because while the supply chain is kind of the hub of activity, there are a lot of other stakeholders in the process. Once we had all that insight, we developed a strategy to help, to transform work process, to provide tools, and to suggest organizational changes that improved both the customer and employee experiences.

A big part of this is understanding that the principles of supply chain and transformation are applicable across a range of industries, so whether you’re in CPG or discrete materials, the basics still apply. At Profit Point, we leverage our collective years of diverse experiences – whether in manufacturing, parts, environmental sciences, or a host of other backgrounds – to help get you where you need to be.

Transformation is an Ongoing Journey

Asking questions also never stops being important to improving your supply chain.  

Another client who had installed and implemented our Profit Network design software was keen to use it most effectively and get the most value out of it – and they were looking at the entire business horizon, seeking benefits for both short-term tactical decisions as well as longer-term planning considerations. With those goals in mind, we paid a multi-day visit to their site and reviewed all their workflow processes for supply chain. We looked at their forecasting, their scheduling processes – both short-term and long-term – and we looked at all the meetings they were currently holding. We took an incredibly close look at everything they did, and now we had our starting point.

What we learned was that they wanted and needed to implement sales and operations Planning workflow processes, even though they didn’t fully understand all that entailed – but they knew they could get value out of it, so we did a deep dive into that as well.

Importantly, they really wanted the supply chain team to drive this. They understood the potential payoff from these activities in sales and operations planning in particular, but they didn’t have a lot of support from upper management and other areas in the organization. So a key part of how we structured our recommendations was setting them up to deliver high value early on. With these early successes, the supply chain team was empowered to  bring these results to the various meetings attended by the functional groups from all over the organization. By illustrating the kind of value these supply chain transformation efforts delivered, they built support long-term over the next few years, developing a full sales and operations planning process, and ultimately incorporating the approach into their annual business planning.

Better Questions, Better Results

And it all started with the right questions. Before we could tell them how to use Profit Network better, we had to be there; we had to understand what they were doing; we had to experience their workflow processes and feel their pain points. We had to know their people, processes, and technology. That learning gave us a genuine understanding of where they were: While they had fairly well-defined forecasting and scheduling, we saw their trouble spots arose when the time came to react to unfolding events in supply/demand balancing. They had difficulty addressing unexpected issues because they tended to be reactive, and they wanted to be more proactive in their reviews and decision making. They just needed help understanding how to get there.

Once we recognized and labeled those pain points, we took a step back and figured out how Profit Network fit into the puzzle, and how to incorporate it into the workflow and into their recurring meetings. They had all the pieces of technology available, and they knew Profit Network was the tool to help them get from Point A to Point B – but the solution was all about adapting to their specific situation, based on what we learned by asking questions and gathering information.

So: Got questions? Great – so do we! Let’s start a transformation together.

The post Supply Chain Pain? We Have Questions – then Answers appeared first on Profit Point.

Covering people, processes, and systems affected by change, change management strategy is designed to ensure a smooth transition and successful adoption of new initiatives. This was indeed the case for a Profit Point client looking to shift away from spreadsheets to a 100% digital supply chain scheduling tool.

Our Approach to Change Management

Before you can even begin to think about implementing change management, you must find a tool that meets your unique business needs and requirements. Profit Point works with our clients to adapt their requirements according to available technology solutions and support available, navigating through must-haves and vendor support capabilities to deliver customizations.

After a tool is selected, the seeds of change management can start to be planted. We leveraged three key elements of change management to help our client transition to a digital scheduling system effectively:

• Planning & Analysis– Thoroughly analyzing the impact of the proposed change, identifying key stakeholders, and creating a detailed plan helped us reduce risks, identify resource requirements, and reduce potential resistance to the change.
• Communication & Engagement– Clear and effective communication informed stakeholders about the reasons for change, the expected benefits, and the timeline. Engaging employees and addressing their concerns helped build support for the change.
• Feedback & Iteration– Gathering feedback from users provided valuable insights for improvement. We were able to make iterative adjustments to refine the strategy based on real-time experiences to drive results.

From my perspective Change Management is not just about strategy and approach, it is also about the people behind it, like myself and my associates who also believe strongly in the need for continuous adoption and improvement. That happens because each one of us is passionate about seeing our solutions go beyond being put to “good use”.  We build relationships with the people within the organization and continue to expand not only our understanding of the businesses and the needs of the people and processes behind those businesses, but also help organizations find opportunities to improve their businesses.

A Move away from Spreadsheets

In a recent engagement we achieved great success in helping a valued client eliminate their reliance on spreadsheets for production planning and scheduling. Moving to a digital tool that would become a single source of truth was a major shift for the organization. The path that we took included not only selecting the right technology, for this engagement as we chose Aspen SCM Plant Schedule (SCM) along with Aspen Schedule Explorer (ASE), but it also involved adherence to our Change Management approach and our belief in Continuous adoption and improvement.

We did this by implementing a baseline model with “live” data in ASE to demonstrate the capabilities of the new planning and scheduling solution.  As we moved through the implementation phase, we provided expert training to ensure effective and confident use of the baseline model. As we moved through the “hyper care” phase and gained acceptance by schedulers and consumers of the planning and scheduling information, we sought to learn additional requirements that would ensure full adoption.

Over a period of several weeks, we followed a continuous improvement approach and delivered valuable improvements to the baseline model and reinforced the knowledge and use of the tool with continuous training.  In working closely with planners and schedulers we were able to demonstrate the collaborative features of ASE to the rest of the organization and realize the full value that this solution provided.

With ASE, when the scheduler makes a change and publishes the schedule to a broader audience, not only can they see this change, but they can also communicate in real time with each other about this change and any other part of the production schedule.  As we gained full adoption, the organization now had an undisputed single source of truth upon which providers and consumers can collaborate and best of all, no spreadsheets.  

Additional benefits the client saw included:

• Enhanced communication and improved visibility into schedule – This led to substantially faster communication to a broader team – improving quality and safety because of better and faster decision making when taking corrective action during unplanned events, improved schedule feasibility and adherence to quality and safety rules.
• Better collaboration across supply chain team– By eliminating the manual tasks of managing spreadsheets, schedulers regained their time to make better schedules and regain ownership and control of the schedule. This along with improved collaboration led to increased trust in and improved execution of the schedules provided by the scheduler.

If you’re considering embarking on an expert driven detailed scheduling project or a supply chain optimization project, check out our proven methodology and see how we can help.

The post Success Story: Supporting Supply Chain Automation With Change Management appeared first on Profit Point.

1. Alignment with Business Strategy
2. Technology & Integration
3. Change Management & Workforce

In this two-part blog series, we’ll examine how Profit Point helped one customer navigate associated challenges with the above considerations while they transitioned from spreadsheets to manage their supply chain to a digital scheduler, Aspen Scheduling Explorer. Here, we’ll look at business strategy and technology integration.

Business Strategy Considerations for Supply Chain Automation

Before automating any aspect of the supply chain, it’s crucial to ensure that the automation strategy aligns with the overall business strategy. Consider how automation will help achieve your business goals, whether it’s reducing costs, accelerating time to delivery, or expanding into new markets. It’s essential to have a clear understanding of the expected outcomes and how automation supports the broader vision.

Before making any recommendations, Profit Point spent time with multiple cross-functional leaders to understand the current pain points, what they were already using in terms of spreadsheets, and what they were looking for in terms of improving and simplifying existing processes. This particular client’s primary concern was automating scheduling for a large number of storage tanks of various volumes and capabilities. Their unique requirements included holding materials at the right storage temperatures while also considering the available linkages from production to storage tanks, and then from tanks to trucks.

“We were very cautious to understand the background of the situation and get them on board with the project,” said Mark Gracey, Application Developer at Profit Point. “Then we really put our heads together to start building-out the right-fit solution to accommodate the business’ unique demands.”

Another tactic Profit Point employed to confirm the project’s alignment to business strategy was to pilot a roll-out at a single site, vs. a broad-based program launch. Piloting at a single location enabled the team to test the solution and make tweaks as needed while eliminating the possibility of widescale disruption to the business.

Technology & Integration Considerations for Supply Chain Automation

It’s important to evaluate technology solutions required for automation and how they’ll integrate with existing systems, including factors like compatibility with current software, hardware, and data sources. Integration challenges can be a major obstacle, so it’s essential to plan for a seamless transition and ensure the chosen technology can scale as the business needs change and grow as well. Additionally, data security and privacy should be considered, especially when dealing with sensitive information in the supply chain.

In this situation, the primary goal was to move the client away from using spreadsheets. After conducting a thorough health assessment of existing data and systems, it was determined that just plugging-in any scheduler would not suffice as a solution. The key was to get the data where it needed to be and provide a sound platform for collaboration. Profit Point chose tools from the AspenTech Supply Chain Management solution suite because they provided the kind of data visualizations and custom functionality the client needed to support their business.

Another key challenge the project solved was empowering the client to know how to adapt to change and maximize the benefits of the scheduling solution over time. Previously, existing systems were abandoned or used improperly due to the loss of knowledge and expertise from attrition or organizational change. With the new, automated system, the client would be able to effectively track, change, and manage data in a centralized location while minimizing operational risk.

After analyzing how the data and processes could be optimized, we shifted our focus towards people and change management. Stay tuned for part 2 of this blog series, where we’ll examine the tactics and output of getting the full organization on-board to accept our technology and process recommendations.

If you’re considering embarking on a supply chain optimization project, check out our proven methodology and see how we can help.

This article was co-authored with Jackie Graver. 

The post Supply Chain Automation: Making the Transition from Spreadsheets to a Digital Scheduler appeared first on Profit Point.

With ever-changing market demands, shifts in customer preferences, and seasonal variations it is important to know how these drivers may affect your production decisions. Efficiency and cost optimization also play a crucial role, with a focus on reducing downtime, optimizing resource utilization, and improving inventory management. These drivers vary by industry and market dynamic, and effective changeover management is essential for successful supply chain manufacturing operations.

When is the Right Time to Include Production Changeovers?

Switching from manufacturing one product to another can be a complex process and can require major investments of both time and resources – and those investments can vary greatly depending on the product mix during a given time period. Modeling changeovers can improve the quality of your plan by enabling better decisions about the use of production assets and the tradeoffs with other costs in your supply chain.

When you model changeovers explicitly, you get an optimization model that supports trade-off decisions that sometimes lead to longer runs with inventory pre-builds – which reduces the frequency of the need for changeovers – or production plans that more efficiently group products, like putting those with minimal setup time and costs on the same line.  The output of the model should point to the optimal mix of production costs, inventory costs and transportation costs that balance production changeovers, inventory carrying costs and transportation costs.

There are a range of techniques that exist to model changeovers in optimization planning models, so it’s important to identify which one is most appropriate for your business needs. If you’re developing a long-term strategic network design model, for instance, or if you’re working on a line that’s set up for short, consistent changeovers across product mixes, you can probably use a relatively simple approach that approximates the lost production time by using an efficiency factor.

However, for those businesses with a complex set of changeovers to consider, or a horizon that includes time periods in the near term, Profit Point has found that it is better to implement a more accurate method that sequences the product families produced on a line so that all changeover options can be evaluated by the model.

Finding the Production Changeover Plan That’s Right for You

Being prepared to find that the best solution for your business may not necessarily require an all-or-nothing approach. Often modelling the key business cost drivers is enough to make the right decisions for your business. For example, it may be best to group products into larger families so that you only model changeovers that occur when transitioning between larger families of products. Similarly, you may decide to only model the changeovers for the first few time periods, which are generally the ones closest to the execution horizon and thus may require a more accurate level of planning.

Regardless of your ultimate goal, make sure to consider these three components when creating your production changeover model:

1. Historical Data & Performance Metrics – Analyze historical production data to identify patterns and trends in demand, changeover times, and resource utilization.
2. Cross-Functional Training & Development – Collaborate with production operators, engineers, and other relevant teams to gather insights and input on current changeover practices.
3. Technology & Automation – Test and optimize changeover scenarios before implementing them on the production floor to minimize the risk of disruptions.

For many large manufacturers, production changeover costs are a significant cost driver to their overall supply chain network costs.  Therefore, it is essential that these costs are accurately captured in any supply chain network design exercise, to properly understand the tradeoffs between more changeovers, long production runs, inventory holding and transportation costs. We encourage you to explore different ways to properly include these costs in your tradeoffs when designing your supply chain network.

Deciding to include changeovers in your model will typically increase the solution time, but it is often worthwhile, since you end up with a plan that better reflects the trade-offs in your production environment and is ultimately more executable. And since every supply chain problem requires a unique solution, it can be helpful to engage with a team of supply chain experts who can deliver on all three keys to success: people, process, and technology.

The post A Guide to Modeling Production Changeovers in Supply Chain Network Design appeared first on Profit Point.

At Profit Point, we’ve talked a lot lately about co-sourcing and the challenge of finding the supply chain tool that’s truly right for your needs. We’ve written about the keys to any successful supply chain improvement project, and how we’ve shaped our team to help yours.

So what does this all really look like in action?

It’s Never That Simple

Consider one Profit Point client who came to us for help optimizing their order allocation. To people outside the supply chain industry, assigning inventory to an order sounds simple and straightforward. But we know differently: Our client needed a tool that allowed them to adjust service levels based on their customers’ needs as well as the client’s own priorities.

Why? Because not all customers are the same – some might require orders more quickly to avoid compliance penalties, while others might need specific inventory which meets different packaging regulations. Tools which rely too heavily on a “first-in-first-out” approach to filling orders leave supply chains vulnerable to customers taking advantage of the system by exploiting lead times.

So we listened to the client. We learned everything we could about their business needs, and relied on their expertise about their end-users. And then we combined our supply chain and programming skills to produce a tailor-made, customizable solution that helped them serve their customers better and stay one step ahead of their competitors.

Delivering on Specifics

The tool we built enables our client to reschedule orders, preserve inventory to ensure them, and label allocations based on the priority of the customer as well as how old the order was, with particular attention to how many days late each unit was shipped. Customers are prioritized within sets of guidelines: No order can be shipped early, for instance, and no inventory can be negative. The client’s marketing team would also provide allocation limits on certain SKUs. We also gave them the ability to adjust things on the fly to enable fulfillment of orders in conjunction with a customer’s promotional campaign.

These capabilities are invaluable to organizations, manufacturers, and distributors so they can make sure their highest-priority customers are served properly and with a quick response.  It was a game-changer for this particular client in the technology industry, since tech evolves quickly and requires rapid adjustments to keep pace, often with a very limited time to get inventory out of your hands and into your customers’.

None of this is possible with a tool that’s too rigid – that’s why Profit Point aims to deliver complete customization. Other tools might be able to do what we’re doing, but to then later on customize it is proving to be difficult with off-the-shelf solutions.

Usable and Unique

We also had to deliver basic usability to a range of client roles.

By implementing a modular solution, we made it possible for users with various jobs and priorities to easily select the proper options and get exactly the data they need. Users can modify their data or copy-and-paste it into a spreadsheet if they want. We customized interfaces for getting into specific pieces of data like calendars and scheduling workdays.

The tool integrates even further with the database and can trigger stored procedures to run optimization, or fetch and send data -whatever the ERP requires. It also manages the status of the whole system so the user knows where we are in the whole process of fetching, loading, optimizing, and reporting. And it lets them know if there are errors along the way, what exactly broke, as well as the specific validation errors.

Heading in the Best Direction

Results? You could say they were positive.

In the first five years using the Profit Point tool, our client’s order-to-ship cycle time improved from 45% on time to 85% shipping on time. They had a significant reduction in noncompliance, and they improved channel partner relationships to the point where they were winning awards.

The funny thing is, this tool was originally conceived as a sort of stop-gap solution – but they’ve been using it now for a decade and a half, partnering with us along the way. There’s just nothing else out there that delivers at the same level. The tool enabled our client to take full advantage of their market differentiation, and has also successfully evolved as the business environment has changed.

That’s one Profit Point client’s story – now, let’s work on yours.

The post Problem Solved: A Profit Point Client Journey appeared first on Profit Point.

But what exactly is the “best” supply chain tool? Is it the quickest? The most complex? Is it the one that promises to revolutionize the entire supply chain organization? 

Those are good questions. But what I’ve learned over my years of experience as a supply planner and scheduler as well as a project manager – which means I’ve been both a deployment leader implementing these tools as well as a regular user of them – is the importance of focusing not on the “best” tool, but on the right one.

Trust Your In-House Experts

The right tool is the one that best suits your needs. It’s the one that can interact with the other tools you use. It’s the one that can be shaped according to the particularities of your supply chain process. 

At Profit Point, we know that the companies we work with are the experts in what they do best. They know their products and processes inside out; they know how to run their businesses; and they know exactly what they need their supply chain tools to accomplish in order to succeed. So why would you want to implement a supply chain tool that tries to modify the way a business is already working successfully?

You wouldn’t – and there are several good reasons why: For starters, this type of misguided software implementation is likely to struggle with adoption among users because it probably adds additional steps and extra work instead of simplifying their job. This will create unnecessary stress in the organization as people and teams recall the high expectations set for the tool, which now isn’t meeting its core purpose of making things better. And now on top of everything, someone has invested hundreds or thousands of dollars in a software tool that was supposed to be the “best” – but turns out not to have been right.

Seeking A Balance

I’ve seen a lot from the end user’s perspective, from solutions that worked well to using tools that I wouldn’t touch again in a century. And I’ve also been on the management side of implementation. As a user, it’s important for a tool to help me do the mundane things as efficiently and accurately as possible, freeing me up to address problems and issues that really need my considered input. 

But it can be difficult sometimes to bring this discussion to management, to make them see how particular and unique the planning process or the scaling process was for that specific business unit. As management, you’re the one that has to make the decision, but the user’s voice has to be heard: What is their need? What are the minimum capabilities they are expecting from this new tool to help them do their tasks?

Flash Doesn’t Always Deliver Functionality

The right technology addresses a problem. It may sound simple and obvious, but I’ve seen management teams get off to the exact wrong start by saying, “We’ve got to re-do the processes, and we need all this software functionality.” And then vendors come in and show off a ton of shiny new capabilities, but nobody pauses to consider whether those capabilities are actually going to be utilized by the users.

The right technology isn’t always going to be the most feature-rich: It’s going to be the most effective at allowing end-users to make their value-added decisions. The right technology for Company A won’t necessarily be the right one for Company B. Looking for the most bleeding-edge technology isn’t the best for everyone, so the process needs to begin with a thorough assessment of exactly what type of technology is best suited for them.

When we’re trying to implement a technology, we listen to the teams who know their processes. They know what they’re doing and what works for them, so that we don’t come in and disrupt their systems. We might need to adapt in places, but it’s always with the goal of creating a solution that helps the users do their jobs better.

When It’s Right, It Works

So what happens when you choose the right tool? You realize multiple benefits. A tool that’s flexible can be configured to deliver just what the company needs by replicating the current supply chain process and its basic requirements. Flexibility also creates opportunities to improve the current process without changing or hindering the aspects which are working just fine. And flexibility enables expansion of capabilities according to new needs of the business.

Having the right tool is also key for the change management aspect of a software implementation, because it shows the end users a simplified way to perform their tasks, and delivers time reduction which empowers them to focus on more important parts of the job. And ultimately, this enables them to efficiently deliver their customers what they need in the moment they need it – reliability which can’t be overvalued in today’s hyper-competitive market.

The post Choosing the Right Supply Chain Tool for Your Needs appeared first on Profit Point.