December 19, 2006
Brewing up a Smooth Supply Chain (S&DCE)
Innovative solutions for diagnosing and fixing supply chain processes gone awry
by Andrew Reese
December 2006 (Excerpt)
Andy Cullen and his planning and export team at Guinness thought the iconic Irish beer brewer's customer service numbers looked pretty good: 99-100 percent month after month, according to their figures. But when Cullen and his team sat down with their U.S. customer back in 2003, they learned that the customer was looking at an entirely different set of metrics, and by those numbers Guinness was barely breaking 50 percent service levels.
It wasn't just that the two parties were looking at different numbers, Cullen says now. "The problem was that the way I thought the supply chain was working was actually not the way that it was working." In fact, supply disruptions causing the breakdown in service were going undetected at Guinness. In response, Cullen not only realigned the key metric that his team tracked but also went looking for a technology solution that would allow Guinness to become proactive in how it diagnoses and addresses the hiccups in its supply chain.
According to AMR researchers John Hagerty and Jeffrey Freyermuth, in a recent report titled "BI Landscape: A Closer Look at License Revenue," the BI/PM majors players include the publicly traded Actuate, Applix, Business Objects, Cognos, Hyperion, Informatica, MicroStrategy and SPSS. In addition, the analysts write that the large enterprise resource planning (ERP) vendors, including Microsoft, Oracle and SAP, "are all making a serious run at BI/PM functionality in an attempt to capture mind and market share while piggybacking on their existing presence in accounts worldwide." Hagerty and Freyermuth also point to SAS, IBM and NCR Teradata as top contenders in this space. Beneath this top tier of "majors," a growing group of more specialized solution providers is emerging to offer applications targeted at specific segments of the BI/PM challenge. These niche players are attacking the supply chain disruption challenges in three different directions: upstream, inside or downstream.
Looking upstream, enterprises are applying solutions for quality management and supplier performance management to this problem. For example, Quickie Manufacturing Corp., of Riverton N.J., is using a Web-based application from Chantilly, VA-based InfinityQS International to gain visibility into where quality-related issues are occurring within its supply base in close to real-time. Quickie is the largest North American provider of retail household cleaning tools and related products, and the company has rolled out InfinityQS' new hosted solution, eSPC, to key suppliers in its supply chain. eSPC extends InfinityQS' traditional server-based statistical process control functionality into an online environment, giving manufacturers an enterprise-wide quality control solution that lets them share and analyze data across facilities in real time and at the enterprise level. Quickie's suppliers feed quality information into the solution, allowing the company to detect production issues within its supply chain almost immediately, well upstream in the supply chain and before defective goods or components can reach its own facilities. In addition, the granularity of the information fed through the eSPC dashboards allow Quickie's executives to analyze the nature of problems with more precision now, so that they can work more effectively, and collaboratively, with their suppliers to resolve issues. "They have more resolution into what the nature of the problems are, so that rather than trying to address it with a bat, they can address it with a scalpel," says Steve Wise, vice president for statistical methods at InfinityQS.
Quickie and one of its suppliers have already benefited by proving a particular performance parameter was impossible to meet given the current design. New designs were already being tested just days into the eSPC deployment, and issues that might have taken weeks or longer to resolve are now being fixed within days. Best of all, Quickie and the supplier were able to work collaboratively to the benefit of all parties and, ultimately, the consumer.