REanalyze This!: Supply Chain

Showing posts with label Supply Chain. Show all posts

Wednesday, July 3, 2013

Big Data - What's in it for the Little Guy?

I had the pleasure of speaking at the LIFT-IT Big Data Panel hosted by the Long Island Forum for Technology on June 19. The other speakers included Pete Moran, CEO of General Sentiment, who gave a fascinating talk on the use of Big Data and Analytics in Social Media, as well as Darryl Ramsey and James Toscano of Juniper Networks. Many thanks to the moderator, Peter Rothman, CIO of Alcott HR and Chairman of the LIFT-IT group, as well as Diane Muscarella of LIFT for organizing the event.

While the other speakers were focused on the more typical aspects of Big Data, I decided to address the topic of "Small Data", specifically the data and analytics needs of small and medium sized businesses. You can find my presentation, Big Data for the Little Guy: What's in it for the rest of us?, on the REanalyze web site.

Not every company deals with “big” data, but every company can use data and analytics to make better decisions and transform their business. There’s no “magic” solution, and the answer won’t just “pop out” of a Business Intelligence tool. Rather, it’s a matter of framing the problem, defining the data requirements, and visualizing the data. I suggested that business executives start by asking and answering three simple questions:

What business questions are you trying to answer?
What data do you need to answer the questions?
How can you visualize the data to gain insight?

One deceptively simple, yet powerful, way to frame an analytics problem is by asking

“If we only knew _____ , we could ______.”

Just fill in the blanks, and you’re well on your way to a specific, actionable problem statement that can lead to an analytics solution.

The presentation included some examples, as well a brief case study from a client, a medical components distributor looking to improve its Demand Planning and Inventory Management capabilities. I concluded with the following takeaway:

Data without analysis is nothing…
Analysis without insight is nothing…
Insight is everything

What are your thoughts on Big Data and Analytics for the Little Guy? I’d love to hear your comments. Until next time...

Rob

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Rob Ende is Founder and President of REanalyze Inc., a Supply Chain, Inventory Management and Analytics consultancy based on Long Island, New York. Rob can be reached at 631-807-2339 or rende@reanalyzeinc.com.

Thursday, April 19, 2012

Top 5 Takeaways from INFORMS 2012 Business Analytics Conference

Rob was a Guest Blogger for the INFORMS Analytics 2012 Conference. This was originally posted on the Conference Blog.

As expected, it was a great conference with valuable presentations and plenty of opportunities to network with professional colleagues. After a day to reflect, here are my top 5 takeaways (not necessarily in order). Hopefully they will be useful to both experienced analytical professionals and executives, and those just starting the journey.

(1) Google Insights for Search
Hal Varian, Google’s Chief Economist, gave a compelling keynote that made great use of this free tool. Check it out if you haven’t done so already. It’s a great way to identify market trends based on search frequency. The data goes all the way back to 2004, and you can download the results to combine with other data sources.

(2) It’s not just about the analytics
Congratulations to TNT Express, winners of the 2012 Edelman Award. My biggest takeaway from their presentation had nothing to do with their network optimization models. Rather, it was how they built an entire optimization “ecosystem” centered on their GO (Global Optimisation) Academy.

“(In addition) to adopting OR tools, TNT Express has teamed up with the Tilburg University/TiasNimbas Business School (Netherlands) to create a two-year management development program in transportation network optimization. Called the GO Academy, the training has been delivered to more than 150 managers from TNT since 2008.”

Lots of companies have advanced analytical capabilities, but TNT have added huge value to the organization – and set a great example for other companies -- through leadership, education, training and change management.

(3) The role of Analytics in Decision-Making
We’re always looking for better ways to describe what we do and how we add value through Analytics, and I thought a few of the speakers had particularly interesting angles.

Thomas Olavson of Google described his team’s role as “replacing intuition with data-driven decisions”.
Colin Kessinger of End-to-End Analytics reinforced the role of leadership. “Math supports the decision-making process, but the math doesn’t make the decisions”. Don’t expect an analytical model to give you “the answer”.
Both Colin and Glenn Wegryn of P&G focused on visualization & interactive decision support. According to Colin, “This is what gets you a seat at the executive table”, and Glenn provided the evidence when he described the weekly “immersive business reviews” for P&G’s executive team (with a great picture of the huge hi-def screens that surround the conference room).
Focus on the “so what” or the “why” – not the “what”. Reports are a dime a dozen. How are you going to help drive better decisions?
A neat quote from Glenn Wegryn: “We bear gifts - in the form of rational business insights”. (In my words, "Geeks bearing gifts" -- OK, that's a really bad pun...)

(4) Simpler is Better
The simplest approach that solves your problem is usually the best one. Several speakers hit on this point in different ways.

There is “no correlation between analytic complexity and business value”, according to Glenn Bailey of Manheim.
Chris Fry of Strategic Management Solutions paraphrased Einstein – A model “should be as simple as possible, but no simpler”.
Before you jump into a big, complex analysis with expensive 3^rd-party software, make sure you really understand the problem you’re trying to solve. Colin Kessinger advises that if you can’t build and understand a prototype in Excel, you don’t really understand the problem and you’re not likely to be successful with a complicated off-the-shelf software solution.
Thomas Olavson echoed the sentiment that “small steps lead to big wins”. He favors analytical building blocks and rapid prototypes, and cautions against looking for “grand unified theories”.

(5) 50 Minutes with the 5 minute analyst
It seems only appropriate to make the 5 Minute Analyst my 5^th highlight. In a very interactive conference session, Harrison Schramm of the Naval Postgraduate School shared some fun and thought-provoking “toy problems”. Be sure to check out the 5 Minute Analyst column in Analytics Magazine. The most recent column is available here.

Let me know your thoughts. It's been fun being one of the Conference Bloggers and I look forward to continuing these interesting discussions. Until next time...

Rob

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Thursday, April 5, 2012

Rob Ende Guest Blogging at INFORMS Business Analytics Conference

I am very excited that I've been selected as a guest blogger for the INFORMS 2012 Conference on Business Analytics & Operations Research.

The conference takes place April 15-17 in Huntington Beach, CA, and is the leading venue where world-class organizations showcase the strategic use of business analytics and O.R.

The conference blog can be found here, and the blog will replace the conference home page once the conference begins. I will also mirror my posts right here on REanalyze This!

In addition to taking in some great presentations on the success of Business Analytics in areas such as Supply Chain and Forecasting, I will be co-facilitating a discussion group on best practices in spreadsheet modeling:

Garbage In, Gospel Out? Join Rob Ende, CEO of REanalyze Inc. and SPRIG President Rick Carter, CEO of Equation, in a discussion of tips and tricks on spreadsheet design, development and auditing to prevent errors, reduce risk and ensure quality results.

Please check back for conference updates starting April 15. Until next time...

Rob

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Thursday, March 22, 2012

Nominations for 2012 ‘Assembly Plant of the Year’ Award

Are you proud of your manufacturing operation? If so, you should consider nominating your facility for the 2012 Assembly Plant of the Year award, co-sponsored by The Boston Consulting Group and ASSEMBLY Magazine.

The press release from BCG can be found here.

Companies interested in applying can fill out the online form at www.assemblymag.com/plantoftheyearform. There is no entry fee, and more than one plant may be nominated. The deadline for submissions is April 30, 2012.

Rob

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Tuesday, December 13, 2011

Can U B like P&G?

I read a great article in the McKinsey Quarterly today entitled Inside P&G’s Digital Revolution, about how Procter and Gamble is using digital technology and advanced analytics to revolutionize its business.

I encourage you to read the entire article (note: you may have to register), but in case you’re pressed for time, the first paragraph sums things up nicely:

“Robert McDonald is a CEO on a mission: to make Procter & Gamble the most technologically enabled business in the world… [He is] overseeing the large-scale application of digital technology and advanced analytics across every aspect of P&G’s operations and activities—from the way the consumer goods giant creates molecules in its R&D labs to how it maintains relationships with retailers, manufactures products, builds brands, and interacts with customers. The prize: better innovation, higher productivity, lower costs, and the promise of faster growth.”

A few of P&G’s keys to success:

Enable better decision-making through real time information (or as close to real time as possible)
Apply advanced modeling & simulation tools to test new product concepts and new manufacturing & supply chain strategies in the virtual world before spending money in the real world.
Hire people with great analytical skills, then continually train them & develop those skills at all levels of the organization

I’ll add a couple of thoughts of my own. First, it starts at the top. P&G’s CEO, Robert McDonald, is not just bought into the strategy, he understands the details and is an active champion for using technology and advanced analytics to drive his business.

Second, the competition is moving fast so there’s no time to waste. Get started now. Don’t wait for perfect data – use what you have today, BUT… do your best to build in data integrity from the beginning so poor data integrity doesn’t come back to bite you later.

Few companies have the resources and capabilities to be like P&G. But almost any company can use P&G as an aspirational ideal – an example to shoot for as you develop your own analytics strategy.

Ask yourself a few questions about your business:

How are you using advanced analytics to drive your business?
Do you know what parts of your business offer the greatest opportunity?
What information do you have today that you can leverage for greater insights and improved business results?
What information that you don’t have today would have the most value? What’s the next step to getting that data (or at least getting closer to it)?

Until next time…

Rob

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Friday, December 2, 2011

In Supply Chain Planning, One Size Does Not Fit All

Supply Chain leaders recognize that their planning processes need to be tailored to the attributes or characteristics of specific items. However, many manufacturing and distribution companies still use"one-size-fits-all" approaches to Demand and Supply Planning. This often results in too much inventory on some items, and not enough inventory on others which can cause shortages and stock-outs.

A number of years ago, at Arrow Electronics, we implemented a Categorization approach that applied different forecasting and inventory policies to each item based on the item's demand characteristics, e.g., sales volume, variability of demand and risk profile (mainly, how much of the demand was concentrated with one or a few customers). This allowed planners to focus on the right items to ensure we had the right amount of inventory in the right place at the right time. It was a key element of an inventory strategy that improved inventory turns from 3.5 to 6 while improving customer service levels.

Ask yourself these questions:

Do you use the same forecasting process for all items? Or do you vary the process based on an item's demand characteristics such as volume, variability or risk? How about life-cycle stage, i.e., do you forecast new items differently from mature or end-of-life items?

Do you set your inventory targets or reorder points based on consistent rules-of-thumb, e.g., 30 days coverage ? Or do you set them based on each item's demand variability, lead time and variability of lead time?

Do you set lot sizes or MOQ's for production or purchasing based on "gut feel"? Or do you employ some sort of Economic Order Quantity or Total Cost of Ownership approach to minimize total supply chain costs?

For a good example of what I'm talking about, check out this video from SupplyChainBrain, featuring Tim Conrad of Gates Corporation. Gates implemented a process called "Plan for Every Part" or PFEP, which tailors Supply Chain and inventory strategies based on each item's unique DNA. Click here to watch the video.

How well does your company align its Supply Chain Planning processes with the unique characteristics of each item? Have you thought about the inventory, service and cost benefits of a more tailored approach?

Until next time…

Rob

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Rob Ende is Founder and President of REanalyze Inc., a Supply Chain, Inventory Management and Analytics consultancy based on Long Island, New York. Rob can be reached at 631-807-2339 or rende@reanalyzeinc.com.

Tuesday, November 8, 2011

Talking to Students About Supply Chain Careers

Last week I was invited to speak to the APICS student chapter at Farmingdale State College. It’s always great to talk to an audience of budding supply chain professionals, and I let them know they are entering a great field. Even in these challenging economic times, they have skills that are in demand and they have bright futures ahead of them. Manufacturing and Distribution companies hire a lot of supply chain talent – even in tough times.

As I typically do with an audience like this, I described my career journey in Supply Chain Management, Inventory Management and Analytics, peppered with some real-life examples. I also shared some lessons-learned for career-management. This is certainly not an exhaustive list, but a few things to remind yourself of periodically…

You have a long career ahead of you. Try different things. Do what you enjoy. Don’t chase money. If you do what you enjoy and are good at, the rewards will come.
Make an impact. Apply what you learn in school and on the job. Tie ideas back to a business case – how will you make the company more profitable?
Look out for #1. Don’t expect someone else to manage your career. Nobody cares about it more than you do. Keep developing and learning.

Nothing earth-shattering here, but it’s amazing how often people (myself included!) don’t consistently adhere to these relatively simple concepts.

I have posted the entire presentation at on the Resources page at REanalyzeinc.com - click here. It includes a bunch of project examples and some lessons-learned that are more functionally-oriented (as opposed to career-oriented).

What are your most important career-management lessons?

Until next time…

Rob

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Wednesday, July 6, 2011

Highlights from Llamasoft Conference on Supply Chain Design

Last week I attended Llamasoft’s first annual Summer Conference on Supply Chain Design in Ann Arbor, Michigan, along with a couple of days training on their Supply Chain Guru applications. I met some great people, gained a lot of insight about Llamasoft and their product roadmap, and enjoyed some spectacular early-summer weather in Ann Arbor.

Llamasoft is growing fast, and they are now the only major independent Supply Chain Design software vendor, since the acquisition of LogicTools/LogicNet by ILOG and then IBM, and Optiant's acquisition by Logility.

Founder, President and CEO Don Hicks talked about (OK, I’ll say it…) changing the paradigm for Supply Chain software. Instead of the traditional “Planning versus Execution” framework, Don talks about “Design versus Planning versus Execution”. Planning applications will become increasingly automated and IT driven, cutting across the usual distinctions between strategic, tactical and operational planning. Meanwhile, Llamasoft is squarely targeting the Design space, which will continue to require human input and creativity. To that point, late this year they will add Transportation Optimization to their existing capabilities in Network Optimization & Simulation and Inventory Optimization.

The conference featured some interesting keynote speakers:

Dr. John Gattorna of Australia highlighted his Dynamic Alignment Model, emphasizing the need to develop multiple Supply Chains – with distinct strategies -- that align with different customer behavior models. His book Dynamic Supply Chains is available on Amazon.
Astronaut Buzz Aldrin shared some great stories, images and video from the Apollo program and the 1969 moon landing -- and his strong opinions on how we can and must regain the initiative in space exploration.
Developmental Cognitive Neuroscientist Dr. Bruce Hood talked about how the decision-biases that are hard-wired into our brains can lead people to cling to incorrect beliefs and make decisions counter to all available evidence – something to keep in mind the next time someone questions the “obvious” recommendations from your analysis!

A question for my readers: What are the pros & cons of building your Supply Chain Design capabilities around software, services and solutions from:

…a small but fast growing, independent software company focused exclusively on SC Design (Llamasoft)?
…an established Supply Chain Planning software company integrating an acquired SC Design solution (Logility/Optiant)?
…a huge global conglomerate integrating a SC Design Solution (itself part of a larger acquisition) with extensive software and consulting resources as part of an aggressive Supply Chain Analytics strategy (IBM / ILOG / LogicNet)?

What do you think? I'd love to hear what you have to say!

OK, that’s all for now. Please visit our web site at www.reanalyzeinc.com. Until next time…

Rob

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