Yesterday, in Part I, we re-introduced you to Kinaxis, one of the most interesting companies in the entire Supply Management space. Billing themselves as a platform for Rapid Response designed to assist supply chain professionals in managing their change-ready supply chains, it is actually a very extensive, but deftly integrated end-to-end cross-functional supply chain what-if platform designed to help supply chain professionals determine how to respond to various unexpected situations.

How do they do it? The built a platform that functions as a Global Control Tower for your supply management operation by integrating all of your cross-functional Supply Chain Management (SCM) applications into one centralized control center application that allows you to access all of your data through one centralized application and

• model current, projected, and variations to, demand,
• plan how production would have to ramp up, down, or shift to meet demand,
• determine what the impacts would be to other customers if a preferred customer’s order was filled sooner,
• understand the impacts to inventory and production if a certain raw material or part were unavailable for a short, or long, period of time,
• comprehend the impacts to new product development and introduction of there is a delay in production, raw material acquisition, distribution, or if marketing wants to introduce a last minute change, and
• manage the change process associated with demand, inventory, development, or production changes

among other capabilities. By integrating all of your key SCM applications, including your ERP, transportation and warehouse management, SRM (Supplier Relationship Management), demand planning, and S&OP systems, it can construct elaborate supply chain models that link inputs, outputs, and resources that can answer these questions.

For example, by integrating your ERP/Inventory System with your order management system, it can not only generate an optimization model that can be used to create a distribution plan that minimizes the number of late shipments or missed orders, but automatically generate what-if scenarios that demonstrate what will happen if a certain customer order is given priority. It might be the case that accelerating an order for one customer will cause orders for 10 customers to be late due to volume requirements or production times.

In addition, because it can model dependencies and production cycles, it can also immediately calculate what would happen if a raw material shipment to your supplier’s production facility is six weeks late. It can immediately calculate how many customer orders would be missed or late, the impact on revenue, and the associated loss based upon inventory carrying costs, overhead costs, and workforce costs, among others. Thus, if your organization has a good visibility solution in place, the minute that a disruption is detected it can begin to calculate the impact, and within an hour understand the extent of the associated loss. Plus, it can start modelling the extent that the loss can be countered with each mitigation option the organization can identify using the what-if modelling capability to generate variant scenarios and analyze the associated costs and profits. Thus, if the organization can identify three different sources of replacement supply with different lead times and costs, it can use the Kinaxis platform to determine which option is best in a matter of hours and get on it.

And the best part of all is that the application is as easy to use as a multi-tab spreadsheet. They built a spreadsheet like interface that is familiar to Supply Management professionals with extensive drill-down capability, a visual supply chain network model, and visual reporting capabilities. The interface, which can display multiple linked spreadsheets automatically, and highlight where you are in the master sheet when you are drilling into a sub-sheet, automatically highlights warning situations, including late shipments, overruns, and projected losses. And if you’re not sure what to do, the built-in help not only explains every column, shading, and warning, but how to easily create new what-if scenarios (as a copy of the current scenario) where you can calculate the impacts of adding orders, removing inventory, changing shipments, etc.

The modeling and real-time optimization of the inventory, demand planning, and order management functionality is unique in the supply management space, but its not for the feint of heart.

Although the application is available on-demand, it’s not like an e-Sourcing or e-Procurement solution where you can start using it as soon as they create an instance for you. In order for your organization to experience the full potential of the platform, which has the potential to save a multi-billion dollar Global 3000 hundreds of millions of dollars, a few things have to happen:

• all of your Supply and Operations Management applications have to be integrated,
• the models have to be tailored to your business rules, processes, and constraints, and
• the cross-functional team members critical to each function that is to be modelled and each task that is to be performed have to be trained on what the platform needs and how to use it.

This doesn’t happen overnight, and for the Global 3000, doesn’t happen for six figures either. While many of today’s on-demand Supply Management applications in e-Sourcing, e-Procurement, SRM, etc. can be obtained and implemented by a Global 3000 in the six-figure range, this isn’t the case for this type of a solution. Kinaxis has put ERP to shame where complexity is concerned. When you consider how much the application can do, ERPs, which are considered by most system integrators to be the most daunting integration projects in the private sector, look like simple App Store app installs in comparison. And, unlike ERP providers and integrators, they have a much better track record (with double digit revenue growth seven years running). They built their platform, and business, slowly — taking the time to understand the requirements and get it right. In other words, this isn’t a solution for an organization wanting a quick fix. It’s a solution for an organization that wants the ability to plan, and respond, in the long term. So where the mid-market is concerned, Kinaxis is for those organizations that are willing to make the effort and commitment it takes to become a market leader.

Kinaxis, which was first reviewed on SI by the Sourcing Maniacs in their classic 2008 Vendor Tour, is one of the most interesting companies in the entire Supply Management space. Billing themselves as a RapidResponse solution, which was initially designed to be a demand management platform (available on-demand) to assist supply chain professionals in managing their change-ready supply chains, it is actually a very extensive, but deftly integrated, platform that also does:

• • Demand Order Analysis,
  • S&OP (Sales and Operation Planning),
  • Supply & Capacity (Constraint) Planning,
  • Master Production Benchmarking & Scheduling,
  • Inventory Management,
  • New Product Introduction,
  • Order Analysis & Planning,
  • Supply Management,
  • Profitability Management,
  • Supplier Collaboration,
  • Integrated Project Management,
  • Process Orchestration,
  • Change Management,

and

• Cross-Functional Supply Chain Management.

And it’s used by customers to do all of this, and more. It’s the next level of Supply Management. Once you’ve implemented e-Procurement and put your Spend Under Management, e-Sourcing and Strategic Sourcing Decision Optimization and established processes that keep your costs down and value up, e-Transportation and Trade Management to optimize your distribution and global trade (import/export processes), e-Visibility to manage your risk, and e-Supply Chain Network Optimization to manage your network design, it’s what you do next.

Why? Because each of these solutions only get you so far on their own. e-Procurement eliminates the time-consuming, value-less tactical buying functions that waste time and money, but doesn’t deliver much beyond manpower savings and doesn’t generate value on its own. That’s where e-Sourcing comes in. e-Sourcing takes the spend the organization has under management, analyzes it, and runs strategic sourcing events (such as auctions and optimization driven negotiations) to execute buys and delivery schedules that save the organization time and money, but doesn’t actually manage the distribution or global trade aspects, which can cost time and money if the right documents aren’t executed in the right way at the right time to streamline imports and exports. e-Transportation and Trade Management optimizes the logistics and distribution and ensures everything runs efficiently and smoothly in a non-loss generating manner, but doesn’t optimize the entire transportation and inventory/warehouse management network. When the organization has the opportunity to change its production locations, 3PLs (Third Party Logistics carriers), and/or warehouse and distribution locations, an e-Supply Chain Network Optimization solution will, given current demand and contracts, optimize the entire production, storage, and distribution network to the extent permissible, but will not be able to do anything about change, order analysis and demand generation, optimization of new product development and introduction processes, sales and operations planning around new and upcoming products, production benchmarking and scheduling, cross-functional supply-chain process orchestration, or change management when an unexpected event (such as a material shortage, natural disaster, or supplier bankruptcy) forces a rapid, real-time change to the plan.

This is where Kinaxis comes in. Starting from the premise that what product, risk, and change managers need are answers to common questions like the following in real-time:

• what is the impact of a supplier shutdown due to a fire in the plant?
• how can I launch a new product a quarter early?
• what if a user mistakenly changes an inventory parameter?
• what would happen to our ability to fulfill demand to our other customers if we accelerate fulfilment of an emergency order for a preferred customer?
• how can we effectively reengineer our planning processes?

Kinaxis has built a solution that supports very complex, but easily generated, what-if scenarios that will allow a user to ask these questions and get an answer in a few hours, as compared to the days, or weeks, it would have taken them in the past. How? Come back for Part II!