Early in 2013, WNS Holdings Ltd, a provider of global business process outsourcing (BPO) services, announced its strategic partnership with Kinaxis, the provider of RapidResponse, an enterprise cloud service for supply chain management (SCM) and sales and operations planning (S&OP). RapidResponse is a single product that delivers the underlying planning, simulation, and collaboration capabilities essential to making long-term and short-term demand and supply balancing decisions across the enterprise. RapidResponse’s SCM applications—S&OP, Master Planning & Scheduling (MPS), Capacity and Constraint Management, Inventory and Supply Management, Engineering Change Management, Demand Management, and Order Promise Management—can be deployed using a common data model and user interface (UI).
Part 1 of this blog series introduced the concept of (Rapid) Response Management in the realm of supply chain management (SCM) via a software category pioneer, Kinaxis. The currently bullish Kinaxis has a number of customers that are SAP ERP customers too, and for a long time SAP was at first dismissive (or at least ambivalent) regarding the need for Response Management, as the company had its own well-known SAP Advanced Planner and Optimizer (SAP APO) product. In addition, Kinaxis has had to compete with other advanced planning and scheduling (APS) providers such as JDA Software (former i2 and Manugistics), Logility, and Oracle.
Since November 2010, SAP has been distributing a supply chain solution by a lesser-known German software company ICON-SCM as SAP Supply Chain Response Management (SAP SCRM) by ICON-SCM, a solution extension to its own SCM suite, SAP SCM (see TEC’s article entitled SAP SCM – Stepping out of Obscurity). SAP had investigated several options to satisfy this role, and presumably one of those options might have been Kinaxis. For its part, Oracle released its internally designed standalone product in 2009 called Oracle Rapid Planner, which can be layered on top of Oracle’s enterprise resource planning (ERP) products and other ERP products.
Now, Kinaxis feels vindicated by Oracle and SAP’s endorsement of the market at long last, but is slighted by the IKON-SCM partnership, plus, it is a fierce competition now. In addition, isn’t “optimization” part of the SAP APO name, and why then did SAP introduce a separate SCRM solution? It seems we may be talking about different kinds of optimization. Maybe in certain situations it’s more appropriate to use one kind of optimization versus the other.
My recent series on how to plan and manage in uncertainty and volatility (which conditions have become the “new normal” in many sectors and industries) has generated much interest and many comments. As mentioned in the series, the inspiration came from Kinaxis customers’ case studies presented during the Kinexions 2011 user conference.
Ottawa (Canada)-based Kinaxis has been experiencing a renaissance of sorts lately in these days of dispersed complex supply networks and outsourced and offshore manufacturing (with so-called brand owners and their vast network of suppliers). After over 25 years in existence, and some name changes for both the company and its products since the inception, it is not exactly easy to explain what Kinaxis offers (or even better, where its capabilities start and end in the realm of supply chain management [SCM]).
Part 1 of this blog series articulated the acute need to bring supply chain planning and execution together so that enterprises can react quickly in an informed and confident fashion. The Boston Red Sox‘ September 2011 collapse was used as a poignant example of how even the best long-term planning can be rendered useless if there is no responsiveness during crunch time.
In general, if we know that our plans are inherently wrong to start with – because we can’t forecast and predict accurately – why do we still insist on religiously executing that plan? On the other hand, if you need to make a change, shouldn’t you be able to evaluate the holistic consequences of your decision, especially in these days of scarce credit and working capital?
My recent attendance at Progress Revolution 2011, Kinexions 2011, and several Boston APICS Chapter professional development meetings, where a plethora of companies talked about their operational experiences of late, made me realize that “business as usual” practices no longer work.
For one thing, while long-term planning remains an important exercise for senior executives’ strategic and visionary purposes (evaluating what-if scenario options and making long-term decisions), many recent events have caused serious paradigm shifts.
Trying to make rocket science-based optimized long-term plans has nearly become a fool’s errand. For example, the recent Japanese earthquake and the still ongoing floods in Thailand had quite the impact on high-tech brand owners worldwide, given that some finished goods (gadgets) manufacturers source 30 percent or even more of their critical electronic components from these regions.
At Kinexions 2011 we all heard the following sad supply chain stats: 48 percent of weekly demand plans have errors, with only 5 to 10 percent average net promoter scores (NPS), as the measure of customer loyalty, and measly 0.06 percent compound annual growth rate (CAGR) on return on capital (ROC) as results.