Category Archives: Supply Chain

You Need a Plan to Mitigate Supply Chain Risks. But You Also Need a Platform.

A recent article over on Supply & Demand Chain Executive on Navigating a Supply Chain Management Toolkit noted that with a plan in place, organizations can quickly respond to any changes and help mitigate any supply chain risks.

Which is true, but how much of the risk they can mitigate is the question.

The article, which is very good and definitely worth reading (so check out the link), noted that problems arose as a result of COVID and disruptions since because many organizations use just-in-time inventory management (which we’ve already noted should have ended by now along with seasonality). The article also noted that the problems were often exacerbated by the fact that order processes were often not documented effectively and, in general, most organizations don’t spend the time and resources to really manage their supply chain. All of this is correct, as is the observation that these challenges can be alleviated with wholly embracing the tried-and-true methods for effective supply chain management because effective processes, measurements and accountability are … key to a supply chain that works for an organization.

But, on their own, not the key. Today, you also need a platform that enables the organization to:

  • quickly detect a risk event has occurred
  • quickly analyze the impact
  • quickly initiate any pre-defined mitigation plan
  • quickly implement new decisions and processes where the mitigation plan isn’t sufficient and doesn’t exist
  • monitor the impact of the risk event and the response in near real time

Otherwise, your process could be too slow, your measurements inaccessible and/or unrecorded, and your accountability (under audit) non existent.

For example, the article indicates you should start by getting a better grip on inventory management (which is correct, no product, no business for most companies), and that involves a self-assessment, forecast accuracy review, and inventory segmentation. All correct. But that doesn’t help you when all of a sudden there’s a fire in the factory, a strike at the port, or a strait/border closing. What do you do then?

It also tells you that you should focus on better supplier relations, which is also extremely important, and focus on vetting suppliers before you onboard them and then measuring them and computing the total cost of ownership of keeping them, which is also very important as suppliers should improve over time and costs should not inch up faster than inflation. It also mentions the importance of proper strategic sourcing (matrices) to get the right products from the right suppliers. Another definite. But fails to tell you what you do when all of a sudden a key supplier can’t deliver or becomes unavailable.

The answer here is you use all of your good relationships and data to immediately identify the next best supplier. If you were splitting award, you try to shift to the other supplier (if they can handle the volume — if you were doing an 80/20 split and the 80% supplier suddenly became unavailable indefinitely, the 20% might not be able to support you, or at least not for very long, and you will have to add a new supplier to the mix. If you were doing proper sourcing, and proper supplier vetting before including them in an event, then you already have potential suppliers — the runners up from your last event. A good platform will let you immediately identify them and immediately start another sourcing event to onboard a new supplier as fast as possible.

If you have a good logistics (sourcing) platform, and your primary carrier / route becomes unavailable, you may be able to identify another carrier / route that will get you the products on time, or at least be able to accelerate an order from a secondary source of supply while you wait for the first source through a lengthier route.

The point is, while you need great processes, measurements (to indicate if something is taking too long, such as an order acknowledgement or a delivery, which can be a sign of a potential risk event materializing), and accountability (to show you made efforts to detect and mitigate risks in a reasonable time frame), you can’t measure, execute processes, or provide unquestionable audit trails of accountability without a proper platform. Never forget that. (And for help, you can see our Source-to-Pay series which helps you to identify where to start with your acquisitions and what vendors you might need to look at.)

And again, remember to read the article on Navigating a Supply Chain Management Toolkit as it will help you understand the basic processes you need to put in place.

Keep Your Procurement On PACA with FSMA with Procurant!

We don’t cover specialist Procurement providers much here on SI because many don’t have much in the way of domain specific product functionality (and differ primarily on domain knowledge, terminology customization, and service offerings), but some, like Procurant, go beyond the basics and offer domain specific functionality of relevance that the market needs to take note of. Especially when such functionality can help an organization be compliant with current and, most importantly, incoming regulations they are not ready for.

Procurant, marketing itself as a strategic platform for perishables that does Procurement AND Food Safety, offers the following core functionality:

  • P2P (Procure to Pay) for Perishables
  • Inspections (recording and auditing)
  • Traceabillity that is mobile-enabled and FSMA 204 compliant
  • Market Intelligence
  • Food Safety (workflow and remote sensor integration) (not covered in this article)

It’s the one-stop solution for retail grocers, especially those with US operations, that need to manage their perishable supply chain in a manner that is both PACA and FSMA compliant. (And if you’re a grocery retailer that does NOT know what those acronyms stand for … Uh-Oh! Better find out and give Procurant a call ASAP — because failure to comply can not only result in fines but [supply chain] shutdowns.)

Procurement/Procure-to-Pay wise there isn’t much that’s unique in core functionality (as the uniqueness is with the integrated support for the perishable space), but it’s all there, and we’ll start with the core so you can be confident the core is on par with other best-of-breed Procurement solutions.

With respect to quote management, the platform contains integrated RFQ / price request that makes it really easy to not only request (updated) quotes from suppliers, but get a commitment on that price (for a certain time or volume; i.e. one week or 100 pallets). When you get a commitment, the system tracks orders against that commitment, and then lets you know when the quote has expired because the commitment has been used up (and if you still need more product, you need a new quote with a new commitment).

With respect to order management, the solution makes it easy to select products for orders from the built-in catalog, from order templates (guides), or from demand forecasts (which can pulled in from the forecasting/demand management system OR created natively in Procurant using weighted average outbound for the last 12 weeks, with more forecasting algorithms coming in a future release). The platform even supports the definition of automatic (replenishment) orders, should the organization choose that functionality. Once the order is assembled, it’s very easy to send it to the supplier for fulfillment.

Moreover, as Procurant ‘s P2P also contains integrated support for carriers and logistics (due to the need to monitor the entire produce supply chain and ensure food safety every step of the way), in Procurant, you can also assemble orders by truckload, as you don’t want to be under-shipping if not absolutely necessary (as it takes the same amount of energy to maintain the temperature when refrigeration is necessary whether the truck is almost full or almost empty) and it’s easier to trace when you decide who is shipping what, when, and on which truck. One great feature of the platform is that it’s super easy to assemble an order for a carrier. It’s just a matter of dragging and dropping order line items until the platform notifies you that the last line won’t fit in the truck (as you can encode a max # pallets, weight, and volume by truck and as soon as one limit is reached, the platform lets you know). No complex training on a sophisticated TMS required.

As a result of this deep support for logistics and carriers, purchase orders can be incredibly detailed and include shipping dates, carrier, load reference number(s), and even cross docks.

Also, order management is multi-state and the system will track and notify if there is an:

  • order modification by the buyer
  • order modification by the supplier
  • order cancellation by the supplier
  • order reconciliation by the supplier (on being notified the goods received didn’t match the PO)

and all changes by any party are maintained in a secure, unalterable, audit log.

With regards to order management, the buyers can choose whether or not the supplier can split orders, remove items, or add substitute orders. Whether or not they can change prices (or just quantities to match availability), and even when modifications will be accepted. Similarly, the administrator can determine the order creation capability the buyers have access to … whether or not they have (to use) guides, whether they can create cross-dock orders, etc.

With respect to invoice management, it’s super easy for a supplier to flip a PO to an invoice. All they have to do is enter the actual quantity shipped by line item and submit. The invoice then goes into a wait state until a receipt is entered, at which point if there is a discrepancy, the invoice is sent back to the supplier for correction before it goes into the normal processing queue, where it would be held up until the discrepancy was resolved, which could delay payment considerably if the organization has long approval chains for corrections and exception processing.

The platform also tracks supplier fill rates, so you can quickly see which suppliers are fulfilling the POs they accept and living up to your expectations and which suppliers are not. It also has price watch capability, and can alert you whenever PO or quote prices exceed current (or historical) prices by a certain percentage.

And, of course, there’s a dashboard which summarizes current tasks and open orders and great search and filter functionality to find just the orders, invoices, or quotes you are looking for.

The platform also integrates the inspection reports from their inspection app and, for any fulfilled order, you can quickly bring up the full report that summarizes the inspection (packaging, appearance, condition, flavor, and quality) on each item delivered as well as the number of items rejected. Also integrated with the Procurement platform is the Inspection Module that contains the overall inspection summary dashboard, dill downs by supplier, scorecards by supplier, and other key reports and data points on inspections. The inspect application is a mobile app that workers can use at the warehouse on or the dock to inspect the quality of goods as they come in and, if necessary, reject them on the spot.

What’s really cool is the Track and Trace capability where, for any item, you can see the entire journey from the source lot to the warehouse or the store shelf, as appropriate. You just need a GTIN, lot number, order number, SKU, or product description and, optionally, a date range and you see the store shipments, receivings at your warehouses, vendor shipments, and base lots. And you can click into each store shipment, receiving, vendor shipment, or lot and see complete details (such as the ship to, date, and receiver for a store shipment; order #, sales order, Lot, shipper, shipment date, and cases for a vendor shipment; etc.). And with their next release, the (default) output report formats will be usable for FSMA compliance. (Again, if you do grocery retail and you don’t know why this is critical, you better find out soon!)

Finally, their Market Intelligence Capability in Procurant Connect provides Commodity Pricing, Weather, and Transportation analytics and tracking. The commodity pricing tracks price movements across all commodities by region; the weather pane integrates forecasts down to the county level; and the transportation analytics tracks average load fees by lane (defined by city pairings), as well as price changes and shipper / transportation availability (surplus, slight surplus, adequate, slight shortage, or shortage).

Procurant can integrate with your ERP and AP (payment) system, your TMS (or onboard carriers natively, which is something not many P2P systems can do as carrier management is critical in perishable supply chain management), and your supplier master (for supplier onboarding) if it’s not your ERP.

All-in all, Procurant is a fantastic solution for the perishable supply chain procurement and one that absolutely has to be on the short list of any grocery retailer that needs to get a handle on their perishable supply chain in a manner that will allow them to be fully PACA and FSMA compliant.

SmartCube: Putting a Nice Box Around Industrial MRO for Commissioning and SPIR Procurement for Projects

There are dozens (and dozens) of Procurement Solutions out there, especially for indirect procurement, as that’s where it all started. There are also a dozen or so good solutions for BoM (Bill of Material) direct procurement for manufacturers who need to source to build the products they are selling. However, when it comes to acquiring MRO assets, and spare parts to maintain them, there are very few solutions — and even less for managing procurement and inventory from a (commissioning) project perspective.

Most Procurement Professionals assume that this is handled by the ERP/MRP or the asset management platform but the reality is that the ERP/MRP will only track product specifications for approved products and materials, the asset management will only track assets that are actually delivered, and most of the sourcing is done old school — email and Excel spreadsheets, which is not a great solution. First of all, it is very time consuming for both parties to fill out all the information manually and send documents back and forth. Secondly, it is very error prone as the technical specifications will require detailed part numbers, identifiers, standards, etc. where one miskey can totally invalidate an entire record that might have taken days to put together. Thirdly, as the sheet is not in a version control system, it’s hard to control who can access it when and ensure updates are properly maintained and not missed or overwritten. Fourth, given that an average asset will require 10 or 15 associated spare parts, and multiple assets will need to be acquired at a time, an average sourcing process will take a minimum of two weeks (if not much [much] longer).

SmartCube has developed two tools to handle 1) the pre-commissioning Procurement of components and systems for major projects (such as new plant creation or plant renovation, utility construction, ship construction, etc.), as well as the commissioning process and 2) the material/part master, and the procurement projects needed for the ongoing support (as plants will require production line maintenance and upgrades, utilities will constantly require new regulation and control systems, ships always need upgrades, etc.) along with the procurement and management of the spares required to keep the components and systems running when something breaks.

This is done through their two primary offerings of I-SPIR, which they bill as an interaction and collaboration platform to allow multiple project partners and collaborators to input, collect and share spare parts information (SPIR) between all stakeholders in real time for asset-intensive industries, and I-MAT, that they bill as autonomous warehouse management & material master cleansing & coding platform for any asset heavy industry.

SmartCube I-SPIR

First, some background. SPIR stands for Spare Parts Interchangeability Record, which is basically a list of equipment and spare parts that a manufacturer or supplier recommends that a project owner or asset manager should purchase in order to develop and maintain their industrial plant or process. Once the purchase suggestions, or modifications thereto, are accepted, the project owner then matches the purchases to the material master data in the ERP, if there are appropriate product records, or pushes the appropriate records to the material master.

SPIR is a lot more than just a slight modification to the direct procurement process, because it’s not purchasing materials and parts to build products for sale, but components and systems to keep a process running or a plant (utility, or vehicle) operating. It’s also a well-established systematic supply chain process used for tracking and recording information on various replacement parts used in industrial operations. The process involves:

  • Inventory Management: inventory must be established and properly maintained, and it must include what (parts), where (storage facility, room, and shelf), who (is responsible for), how many (quantity) and why (associated components or systems)
  • Identification: every component needs a unique identifier (and any manufacturing identifiers it’s associated with)
  • Documentation: specifications, function(al requirements), compatibility, and any standards met
  • Interchangeability Assessment: a thorough assessment that takes into account design, materials, operating requirements, and other relevant factors
  • Recording: that identifies parts that a given part can be substituted for, which includes a link to the assessment as well as information on the manufacturer, supplier(s), and lead times (for restock)
  • Maintenance: the record must continually be reviewed, updated as needed, and deactivated when the part is no longer needed or approved

When it comes to identifying components and associated spare parts, and executing SPIR projects, the process is similar to a traditional sourcing process:

  • Identify the need
  • Determine the specifications
  • Research potential substitutes
  • Evaluate compatibility
  • Select the replacement and make the award
  • Update records

It’s Procurement, but Procurement with needs not typically addressed. That’s why a specialized system is needed that takes into account all of the specialized aspects not addressed in traditional direct Procurement systems. That’s the system that SmartCube has created for Industrial MRO with its I-SPIR solution. The module has the following primary components.

Projects & Packages

In the I-SPIR platform, projects correspond to systems and packages to related sets of one or more modules (and each module will require one or more spares to maintain it).

SPIR Processes

Once a project has been defined, the system makes it super quick and easy to request spare parts for one or more components or systems. Setting up a SPIR project is simply a matter of:

  • selecting the master project
  • selecting the responsible individuals (for QA, Evaluation, Assessment, DCC, PRE, Coordination)
  • selecting the supplier
  • providing the basic SPIR info (Doc ReF, PO, Due Date, System & Area of intended use)
  • uploading any necessary documentation
  • sending it to the supplier

Once the supplier receives the SPIR, they can select the part they are willing to provide simply by specifying their ID, the original manufacturer name and OEM part number (if they are acting as a distributor) if they already have the SPIR in their system or it’s in EQHub, a third party SPIR database that contains pre-vetted products with validated information which, when imported, is tagged as already validated information (which can allow an organization to accept the part without having to go through a full evaluation). If the part does not already exist in the system or EQHub, a popup will allow the supplier to enter all of the required information, which will then have to go through a full evaluation process on the buyer’s end.

When the SPIR is returned, the system walks the individuals on the buying team through the process, which consists of:

  • Quality Assurance: is the data valid and are the specifications appropriate
  • Evaluation: classify the Spare against key asset tracking attributes of redundancy, repair/discard, consequence, and criticality and define/override the auto-suggested quantities
  • Assessment: asses the overall purchase against the inventory and finance requirements
  • DCC: verify the DCC data
  • Final Approval and Order: final approval and place the order

Tag Management

The platform makes it easy to manage asset tags and provides downloadable templates for quick upload. This simplifies integration with ERP/MRP/Asset Management systems and material masters.

Dashboard

The main entry point summarizes the projects the user has ongoing and their current states for easy project location, access, and management:

  • To Do: tracks the SPIR requests that need to be opened, re-submitted, evaluated for quality, concluded, etc.
  • New: new Projects & SPIRs recently opened and awaiting supplier submission
  • Open: Projects that are open where team members need to assess submitted SPIRs
  • Overdue: Projects that are overdue
  • Rejected: SPIRS that have been rejected (and need to be returned or recast to new suppliers)
  • Submitted: tracks the supplier submissions (that need to go through the SPIR process)
  • Concluded: SPIRS that have been concluded

SmartCube I-MAT

SmartCube‘s other major offering is their materials “master” management and inventory platform that was specifically designed for supporting material and inventory requirements during (new) plant/site/rig construction and commissioning, plant/site/rig retrofit/upgrade and commissioning, cross-platform / site based material and inventory management (where the organization doesn’t have an ERP/MRP integrations that support that), and other temporary or permanent material and inventory management scenarios not adequately handled by the ERP.

The platform is designed to serve as a part and material master as well as an inventory master for the locations and projects not managed by the ERP/MRP (which, for organizations running on the BIG ERPs like SAP or Oracle, or older ERPs, are any temporary/construction/retrofit/commissioning project where inventory needs to be managed separately and off-site in a yard, on a rig, etc. until the project is done). It’s very easy to load products and materials into the SmartCube I-MAT platform as it allows for easy CSV upload (in addition to direct ERP integration if you so desire, both for initial load and final push when you are done with the project).

In addition, as part of their latest release, they have automatic (potential) duplicate detection and simplify the process of merging duplicates and cleansing the material / product master. They also make it one click to deactivate products (and make it clear when a certain product should not be ordered).

Upon implementation, it’s really easy to define (and upload):

  • Vendors: that are providing the products and materials
  • Tag Numbers: standard (asset) tag numbers (for system integration)
  • Projects: the projects currently being managed through the system
  • Product States: Evaluating / Accepted / Offsite / InTransit / Not Found / Destroy / etc.
  • Locations: Onshore / Offshore / Yard / Europe Warehouse / USA Warehouse / etc.
  • Imports: upload a file and track the imports
  • Deactivated Products: for easy identification and management
  • Users: and their associated permissions

Once the data is loaded, it’s really easy to search for any product using a free-text search on all key fields, or an in-depth filter-driven search on each supported product field. In other words, filters aren’t just limited to material/part name, number, tag, project, vendor, etc. It’s also easy, once a search and drill down is performed, to select all or a subset for batch editing where all products are missing the same data or need the same field updated.

Once a product is selected, it’s easy to bring up, and if necessary, edit all of the associated data, which includes all of the standard part/material fields, as well as perform standard inventory operations. The system understands the standard actions of:

  • Add Stock: increase the stock at the selected location
  • Move/Transfer Stock: move the stock from its current location to the selected location
  • Withdraw Stock: mark the stock as withdrawn and used

In addition, you can (re-)set the status of any product at any time for any reason (which you can capture) if you have the appropriate authority. Plus, when you move or transfer stock, you can indicate the type of transfer and withdrawal (if you define multiple types of transfer and withdrawals, such as consumption, returned, trashed, queued for destruction, etc.).

Plus, coming soon, if you are doing a transfer from one location to another that requires shipping (such as from a rig to onshore or one country for another), the platform will automatically export data for manifest creation in third party shipping systems (either through an API integration or through a flat file CSV export for loading in the third party system).

The entire system has been designed to be incredibly easy to use and support the primary requirements of a temporary project not supported by a traditional ERP/MRP material master or inventory management system:

  • easy off-site management
  • collaboration
  • high quality data

… and eliminate the need for error-prone spreadsheets and shadow processes that were created to get around the limitations of systems that were setup for managing acquisitions and inventory for traditional production line utilization, which is not the case in facility/plant construction and/or upgrade.

Both solutions are delivered as SaaS and no integration with ERP’s are required. Last but not least, the amount training needed is very limited as the design focuses on ease of use. Once a decision is made to use one or the other solution (or both) you can be up and running in matter of days if integrations are not required. Integration with ERPs and other systems is typically only a matter of a few weeks.

As explained in detail, if you need to do a lot of sourcing for pre-commissioning, commissioning, and asset-maintenance, SmartCube is a system you should add to your (very) short list as traditional indirect (and even direct) Sourcing/Procurement systems just weren’t setup for the type of sourcing and (temporary) inventory management you need to do (while SmartCube checks all the necessary boxes and then some).

Coupa: Comprehensive Optimization Underlies Procurement Assurance: Coupa Supply Chain Solutions

We’ve never covered Coupa Supply Chain Solutions (for Design and Planning), formerly known as Llamasoft, here on Sourcing Innovation, but the doctor did contribute to some of the coverage over on Spend Matters, including the acquisition coverage (Functional Overview, Overlap Between Direct Procurement and Supply Chain, and Procurement, Finance, and Supply Chain Use Cases [Content Hub Subscription Required]) in 2020. Llamasoft / Coupa Supply Chain Design and Planning has also been more recently covered by Spend Matters’ Pierre Mitchell as part of his analysis of Coupa for Supply Chain Management overall. For those interested with a ContentHub subscription, see his pieces on Can Coupa manage supply as well as spend?, Coupa’s journey from Business Spend Management to Supply Chain Management: Assessing progress on seven key dimensions, and From Spend to Supply — Coupa’s direct spend management progress.

Coupa Supply Chain Solutions consists of four main offerings:

  • Supply Chain Modeller: the core solution, that can be used offline on the desktop (Supply Chain Guru) as well as online in the cloud, where you build network, inventory, and transportation models for optimization and exploration through the dynamic reporting and dashboard creation module; note that the online version can process multiple “what-if” optimization models simultaneously
  • Supply Chain App Studio: the online solution which allows users to build custom interfaces to the underlying model that can be, if desired, custom designed for different user types (procurement, logistics, demand planners, etc.) and then shared with those users who can use the app for regular analysis and what-if optimization
  • Demand Modeller: for demand modelling and forecasting — not covered in this article
  • Supply Chain Prescriptions: uses machine learning and AI to identify savings opportunities from changes to transportation and inventory models, as well as to identify risk mitigation scenarios, based upon the current supply chain design

In this article we are going to primarily cover the capabilities of the Modeller / App Studio and the Prescriptions which is the core of their supply chain (design and planning) solution suite.

The Modeller has three primary components:

  • Model : where you build the models
  • Explore : where you build what-if scenarios, that are then optimized
  • Results : the outputs of the what-if scenarios

Model building is quite easy. It’s simply a matter of selecting, or uploading, a set of data tables for each relevant supply chain entity. They can be pulled in from a relational database or from a CSV file in standard row-based column format. As long as the column headers have standard field names, the SCP solution can auto detect what entity the table represents (warehouse, lane, transportation mode, etc.) and what data is provided on the entity. It understands all the common elements of supply chain modelling, common names and representations, and appropriate business rules that can do all of the auto mappings.

When you pull in a table, and it does the mappings to the standard internal models, it also automatically analyzes and validates the data. It makes sure all entries are unique, key values required for the types of analysis supported are there (such as coordinates for warehouses, costs per distance for transportation modes, stock levels and associated product requirements for inventory), etc. and flags any conflicting, missing, or likely erroneous data for user review and correction.

When you go to build a scenario, it understands what is required in the base underlying model and validates that all of the necessary data is present. If data is missing, it warns you and gives you a chance to provide the missing data. (Furthermore, as you add constraints to the scenario, the platform understands the data is required and ensures that data is present as well before it tries to run the scenario.)

The application was designed for ease of use and speed, tailored for automating most of the model building process for standard network/inventory/transportation scenarios (including setting parameters and defaults) so that standard models can be built for analysis quick and easy (and it is also quick and easy to change or override any default as needed).

Explore provides the capability where you build scenarios for what-if? exploration.

Building scenarios is simple. You simply select the scenario requirements, or constraints, from a set of existing, or newly created, scenario items that define the parameters of the scenario. For example, for a network optimization, you might want to explore limiting the number of existing distribution hubs or adding more proposed nodes to see if you can reduce cost, carbon, or distribution time. For transportation, you might want to explore adding in rail to a network that is currently all truck to see if you can decrease cost. For inventory, you might want to reduce the number of locations where safety stock for rarely used components is stored (so you can limit the number of locations with a low turn rate and minimize the warehouse size/footprint you need at those locations) and see what happens and so on. Each scenario is built from a set of specifications that specify the restrictions that you want to enforce, which could even be a reduction in the current number of restrictions. These restrictions can be on any entity, or relationship. One can also create scenarios to explore how the network will change under different circumstances, such as demand change, cost change, or disruption. Selecting is a simple point-and-click or drag and drop exercise.

Once you’ve created the scenario(s) of interest (remembering that you can optimize multiple simultaneously in the online version), you launch them by selecting the type of optimization (the “technology”), the sub-type of optimization (the “problem type”), the horizon (the timeframe you want to analyze), and, optionally, override default parameters (if you don’t want to do a cost optimization but instead want to optimize carbon, service level, fulfillment time, risk, etc.). Then you run the scenario, and once the optimization engine works its math, you can explore the results.

The Model supports:

  • Network Optimization
    • Standard Network Optimization
    • … with Network Decomposition
    • … with Infeasibility Diagnosis
    • Greenfield Analysis
    • Cost-to-Serve Analysis
  • Inventory Optimization
    • Safety Stock
    • Safety Stock & Service Level
    • Safety Stock & Rolling Horizon
    • Safety Stock Infeasibility
    • Service Level
    • Rolling Horizon
    • Rolling Horizon Validation
    • Demand
  • Transportation Optimization
    • Transportation – Standard
    • Transportation – Interleaved
    • Transportation – Hub
    • Transportation – Periodic
    • Transportation – Backhaul
    • Transportation – Backhaul Matching
    • Driver Scheduling

In short, it’s a very extensive network, inventory, and transportation optimization modelling solution out of the box that makes it really easy for supply chain and procurement analysts to build scenarios and solve them against all of the traditional models (and variants) they would want to run. (And if your particular variant isn’t out of the box, the SCP team can code and add the variant into your deployment as the underlying solution was built to allow for as many models as was needed as well as unlimited scenarios on those models.) Note that, by default, the platform will always run the baseline scenario so you have a basis for comparison.

Results, which are output in the form of results tables, can then be analyzed in table form (by selecting the output table), graph form (by accessing the graphs), map mode (by accessing the map), or as a built-in or custom report/dashboards that the analyst can create as needed. For every type of analysis in the system, SCP includes a default set of dashboards for exploring the data set, which adapt to not only the type and subtype of optimization that was run, but the goal (objective function) as well. So if you did a cost optimization scenario, they summarize the costs. If you did a carbon optimization scenario, they summarize the carbon. If you did a service level optimization, they summarize the service level. If you did a carbon optimization relative to a maximum cost increase, they summarize the carbon and cost (and the relationship). In their platform, if you optimize one element or KPI, you can see the impact on all of the other costs and KPIs as all of the associated data is also output for analysis.

There is an output table for all elements which can be analyzed in detail, but most users prefer graph or map view on the relevant data.

Views provide custom, tabular, reports on the relevant fields of one or more tables, which can be exported to csv or pushed to another application for planning purposes. For example, if the model was a network optimization model, you can create a view that outputs the new distribution centres and fulfilment lanes for the revised network and push that to the TMS (Transportation Management System). If it was a transportation optimization model, you can output a table that specifies the carrier and rate for each lane, or, if necessary, each lane product combination and push that into the TMS. If it was a safety stock optimization model, you can output the product, location, minimum stock levels, and reorder points and push that into the Inventory Management or ERP system. And so on. There are default views for cost, carbon, service level, demand, and inventory optimizations, along with drill ins for relevant types of cost (site, production, by transportation type, etc.), but it is quite easy for a user to create a view on any table, or set of tables, with derived fields, with the view editor.

Graphs summarize the data in tables or views graphically, allowing for easy visual comparison. Select the scenario, select the data, select the graph type, and there’s your graph. They are most useful as components in dashboard summaries.

Maps provide a visual representation of the supply chain network — warehouses/distribution centers, customer locations, transportation lanes — overlaid on a real-world map with the ability to filter into particular supply chain network elements. There is a default map for the full network overview, and it can be copied and edited to just display certain elements.

Dashboards group relevant elements, such as a map of the current distribution network, a map of the optimized distribution network, a graphic summary of current distribution costs, a graphic summary of new distribution costs, and tabular (view-based) cost, carbon, and service level comparisons as the result of a supply chain network optimization scenario. These are typically custom built by the analyst to what is relevant to them.

Prescriptions, only in the online version of Supply Chain Modeller, are based on the 22 years of experience the SCP team has in building and analyzing models and uses advanced ML, simulation, and AI to automatically identify potential cost savings, and risk reductions and presents rank-ordered opportunities for you in each category, which you can drill into and explore. This solution automatically generates dozens (upon dozens) of scenarios and performs hundreds (or thousands) of analyses to automatically bring you actionable insights that you can implement TODAY to improve your network.

These savings will be grouped by type for easy exploration. For example, when it comes to cost savings, these will often be obtained by node skipping, mode switching, or volume consolidation — and the prescriptions module will summarize the prescriptions in each category, as well as summarizing the relative total savings of each category. A user can accept or reject each (sub) set of prescriptions, and then export all of the accepted prescriptions into new route definition records that can be imported into the TMS.

Note that the analysis that underlies the prescription analysis is very detailed, and in addition to the prescriptions, the platform will also identify the top network factors that are impacting the transportation costs, such as fleet distance, unique modes, certain carriers, country, etc.

When a user drills in, she sees the complete details of the prescription, including the before and after. In the node skipping example, they will see the current distance, products, quantities, (total) weight and volume, and current rates and then will see these in comparison to the new distance, new rates, and new costs. The old and new routes will be mapped side by side. The old and new lanes will be detailed.

The out of the box network risk summary for revenue at risk is quite impressive. The platform is able to compute the overall network revenue AND network profit at risk based on single sourced site-products, % of flow quantity single sourced, avg. end-to-end service times, and impacted paths. It will then do analyses to identify potential risk mitigation improvements allowing for 5%, 10%, and 15% network change (based on how product flows through the network with the current design) and compute the corresponding change in revenue and profit at risk as a result of those changes as well as the change in network cost. Usually the cost will increase slightly, but not always. For example, it could be that you could reduce the revenue at risk by 5% just through a supplier reallocation and network redesign, and if you were really risk averse, it could be that a 1% increase in network cost could result in an 8% to 10% decrease in revenue, and profit, at risk. And that could be the cheapest supply chain insurance you can buy.

Of course, you can drill into each model, the prescriptions, and the risk reduction with each individual change. It’s an extremely powerful tool.

Another thing that is really powerful in Coupa Supply Chain Solutions is the specific applications they can enable in the online App Studio, including the Cost-to-Serve App (which is just one example of the custom interfaces that can be built) that is one of the most complete dynamic dashboards for network insights that the doctor has ever seen. A summary can’t do it justice, but to whet your appetite to be sure you ask to see it in a demo, it has a full set of meaningful baseline KPIs, a visual network and flow summary, deep details on product costs and profitability, deep details on lanes and transportation costs, and so on. You can also quick-select a scenario to run and compare against the baseline in the app. It’s extremely well thought out.

Furthermore, you can build scripts in the App Studio to rebuild and run models on a schedule when you have a network in flux (because of disruptions, supply base changes, network changes as a result of prescriptions, etc.). And, of course, you can share these models and apps and dashboards with other analysts and democratize supply chain planning, easily enabling planners to analyze their own scenarios and make decisions collaboratively in a user-friendly App.

In short, Coupa has fulfilled the supply chain use cases we identified back in 2020 in Procurement, Finance, and Supply Chain Use Cases. It’s a great solution that you should check out, especially if you would like to have procurement and supply chain under one umbrella.

Even Forbes is Falling for the the Gen-AI Garbage!

This recent article in Forbes on the Supply Chain Shift to Intelligent Technology is what inspired last week’s and this week’s rant because, while supply chains should be shifting to intelligent technology, the situations in which that is Gen-AI are still extremely rare (to the point that a blue moon is much more common). But what really got the doctor‘s goat is the ridiculous claims as to what Gen-AI can do. Claims with are simultaneously maddening and saddening because, if they just left out Gen-AI, then everything they claimed is not only doable, but doable with fantastic results.

Of the first three claims, Gen-AI can only be used to solve one — and only partially.

Procurement and Regulatory Compliance
This is one example where a Closed Private Gen-AI LLM is half the battle — it can process, summarize, and highlight key areas of hundred page texts faster and better than prior NLP tech. But it can’t tell you if your current contracts, processes, efforts, or plans will meet the requirements. Not even close. In fact, no AI can — the best AI can just indicate the presence or absence of data, processes, or tech that are most likely to be relevant and then an intelligent human needs to make the decision, possibly only after obtaining appropriate expert Legal advice.
Manufacturing Efficiency
streamline production workflows? optimize processes? reduce errors? No, Hell No, and even the Joker wouldn’t make that joke! You want streamlining? You first have to do a deep process cycle time analysis, compare it to whatever benchmarks you can get, identify the inefficiencies, identify potential processes and tech for improvement, and implement them. Optimize processes? Detailed step by step analysis, identification of opportunities, expert process redesign, training, implementation, and monitoring. Reduce errors? No! People and tech do the processes, not Gen-AI — implement better monitoring, rules, and safeguards.
Virtual Supply Collaboration
A super-charged chatbot on steroids is NOT a virtual assistant. Now, properly sandwiched between classical AI and rules-based intelligence it can deal with 80% of routine inquiries, but not on its own, and it’s arguable if it’s even worth it when a well designed app can get the user to the info they need 10 times faster with just a couple of clicks. Supply chain communicating? People HATE getting a “robot” on a support line as much as you do, to the point some of us start screaming profanities at it if we don’t get a real operator within 10 seconds. Based on this, do you really think your supplier wants to talk to a dumb bot that has NO authority to make a decision (or, at least, should NEVER have the authority — though the doctor is sure someone’s going to be dumb enough to give the bot the authority … let’s just hope they can live with the inevitable consequences)?

And maybe if the article had stopped there the doctor would let it pass, but
first of all, it went on to state the following for “AI”, without clarifying that Gen-AI doesn’t fit in the process, leading us to conclude that, since the first part of the article is about Gen-AI, this part is too, and thus is totally wrong when it claims that:

“AI” understands dirty data
with about 70% accuracy where it counts IF you’re lucky; that’s about how accurate it is at identifying a supplier from your ERP/AP transaction records; an admin assistant will get about 98% accuracy by comparison
it can “confirm” inventories
all it can do is regurgitate what’s in the inventory system — that’s not confirmation!
it can identify duplicate materials
first it has to identify two records that are actually duplicates;
and how likely do you think this is with a supplier mapping accuracy of 70%?
it can identify materials to be shared among facilities
well, okay, it can identify materials that are used across facilities and could be located in a central location — but how useful is that? it’s not because, first of all, YOU ALREADY KNOW THIS, and, second, IT CAN’T DO SUPPLY CHAIN OPTIMIZATION — THAT’S WHAT A SUPPLY CHAIN OPTIMIZATION SOLUTION IS FOR! OPTIMIZATION!!! We’ll break it down syllabically for you so you know what to ask for. OP – TUH – MY – ZAY – SHUN!
it can recommend ideal storage locations
again, NO! This requires solving a very sophisticated optimization model it doesn’t have the data for, doesn’t know how to build, and definitely doesn’t know how to solve.
it can revamp outdated stocking policies
well, only the solution of a proper Inventory OPTIMIZATION Model that identifies the appropriate locations and safety stock levels can identify how these should be revamped
it can recommend order patterns by consumption and lead time
that’s classical curve fitting and tend projection

And, secondly, as the doctor just explained, most of what they were saying AI could do CAN’T be done with AI, and instead can only be done with analytics, optimization, and advanced mathematical models! (You know, the advanced tech (that works) that you’ve been ignoring for over two decades!)

The Gen-AI garbage is getting out of control. It’s time to stop putting up with it and start pushing back against any provider who’s trying to sell you this miracle cure silicon snake oil and show them the door. There are real solutions that work, and have worked, for two decades that will revolutionize your supply chain. You don’t need false promises and tech that isn’t ready for prime time.

Somedays the doctor just wishes he was the Scarecrow. Only someone without a brain can deal with this constant level of Gen-AI bullsh!t and not be stressed about the deluge of misinformation being spread on a daily basis! But then again, without a brain, he might be fooled by the slick salespeople that Gen-AI could give him one, instead of remembering the wise words of the True Scarecrow.