Logility is closely monitoring the Coronavirus (COVID-19) situation around the world with a priority on doing what we can to protect the health and safety of our employees and support the business planning capabilities of our customers.

Dealing with disruption is the nature of supply chain planning. For more than 20 years, Logility has helped companies thrive in dynamic global supply chain environments, quickly assess the current situation, evaluate multiple response scenarios and make better-informed decisions faster. We are here to help.

Bounce back faster by making better decisions now

One of the best decisions to make now is investing in supply chain planning solutions and services to enable your business leaders to take control of complex supply chain challenges when disruptions like the Coronavirus occur.

The Logility Digital Supply Chain Platform:

  • Leverages a Digital Twin to model the volumetric and financial impact on business goals, customer service levels, and available production and distribution capacity
  • Quickly anticipates spikes or drops in demand using machine learning (ML) and artificial intelligence (AI) including robust demand sensing
  • Resets customer priorities and service level needs or capabilities
  • Reprioritizes products to be produced, sourced and moved throughout your global network
  • Prioritizes scarce inventory to optimize network performance
  • Rapidly identifies supply constraints and alternate sourcing opportunities across multiple time horizons with AI and ML driven insights
  • Optimizes available manufacturing, and assesses business options such as additional hours/shifts or working with contract manufacturing partners satisfy market demand
  • Evaluates the tradeoffs of multiple business scenarios and recovery periods as operations return to normal to ensure the right products are flowing to the right locations

The Logility AI-based digital planning platform can help you bounce back faster and automate your supply chain planning to allow your team to focus on the return to normal business operations.

Learn more: Covid-19 (Coronavirus): Where do we go from here?

Short-term staffing needs

Need to augment your team now? Logility can help. Our Planning as a Service offerings and Global Services team can supplement your staff and accelerate your ability to model, validate and enact your business planning to help you bounce back faster.

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Omni-Channel Retailers Supply Chain Survival PlanIt’s an omni-channel world out there. Mobile and e-commerce customers expect to receive the same experience and service regardless of where or how they shop. Of course, customers do differ from store to store, and online desktop shoppers can be different from mobile app shoppers. Many customers regularly cross channels between in-store, online and catalogues. Omni-channel retailers must be able to leverage their inventory and supply chain visibility more intelligently, or risk being swamped by these “new world orders.” (see Retail TouchPoints white paper: Develop an Omni-Channel Competitive Advantage)

Given that many existing planning systems were developed and installed in the 1990s, optimizing planning decisions means evolving your people, processes and technology toward a new level of cooperation and flexibility. It’s time to overhaul your planning, allocation and replenishment activities. Time to balance product and store plans. Run “what-if” scenarios. Create demand-driven assortments. Use virtual warehousing to maximize stock availability. Invest in merchandise to cost-effectively serve all channels.

In the podcast, Retail Planning in an Omni-Channel World, we discuss in-depth each of the following “to dos” of omni-channel-driven changes that need to happen:

Omni Channel Implications from the NRF Holiday 2016 ReportThe National Retail Foundation’s (NRF) Holiday 2016 update predicts sales to increase 3.6% during November and December. At the same time, online sales are expected to increase by 7% to 10% over 2015. What does this mean to you?

The growth of online spending shines a bright light on how important it is for retailers to serve customers where and when they want to purchase. Many consumers prefer to research online first, then walk into a store for the immediate satisfaction of purchasing a product. Conversely, they may browse at the retail store, then go home to order products online. It has become extremely difficult or impossible to forecast exactly where a customer is going to purchase a product from. In spite of this uncertainty, many retailers’ inventories are siloed by channel, and fulfillment occurs without consideration of balancing cost and service.

The expectation is that 2016 will be a better holiday season than last year. Are you ready? Do your merchandise assortment, allocation and replenishment plans reflect this projected increase? How are you going to split demand between your various channels? There’s one approach we find to be highly profitable; creating a virtual warehouse from which to allocate inventory to each channel (see #7 in the white paper, Optimizing Retail Allocation: 10 Must-Have Capabilities). This approach blunts the cost of committing it to a single location and then dealing with transfers or, worse yet, markdowns. Are you enabled to do it?

After several hard years, the positive news from NRF portends an upward trend in sales. Are you prepared to take advantage of it?

Get out a piece of graph paper and plot your current achieved service level on the x-axis and your current inventory level on the y-axis. Mark that point with a dot.Now, estimate how much more inventory on hand would be required to raise your service level by 5%, 10%, 15%, and so on. Now, go in the opposite direction and plot how much less inventory would be required if you lowered your service level goal by those percentages? Congratulations, you now have a bunch of dots on graph paper. Connecting these dots draws a trade-off curve between your currently achievable service levels and the corresponding inventory necessary to achieve them. Spend more on inventory and you should be able to increase your service level. Drop your service level goal and you should be able to save some working capital by reducing inventory. That trade-off curve is called your Efficient Frontier. Organizations can slide along this efficient frontier curve by manipulating the service and inventory “levers.”

So, an efficient frontier is like reality: you can move along it, but you can’t alter it. Or can you?

Multi-echelon inventory optimization (MEIO) lets you step into new territory, a new efficient frontier, that establishes a previously unavailable relationship between inventory and service level. In fact, you could say that any MEIO initiative is an attempt to alter reality: in this case, inventory reality. You want to jump off your current curve onto a whole new curve that represents a truly better world. In this new world, less inventory is required to produce higher service levels than you’ve been able to achieve in the past.

By modeling the end-to-end supply chain, MEIO determines new ways in which inventory pools at each stage, or location, should be managed to best serve the needs of other stakeholders occupying other supply chain tiers. MEIO initiatives discover the optimum amount and placement of inventory across the entire interdependent network.

Planners can use “what-if” scenario analyses to adjust the tradeoff between customer service and inventory cost over time to perfectly match the risk profile your organization is comfortable with.

With its uniquely comprehensive approach to both strategic and tactical inventory held across the supply chain, MEIO creates better trade-off curves. These new realities mean the supply chain team delivers higher levels of service at lower inventory cost for any cost vs. service goal. This creates a positive feedback loop that drives continuous improvement for years.

By shifting the efficient frontier, I have seen companies reduce their working capital more than 30 percent, translating into tens of millions of dollars in savings annually.

How good is life on the frontier in your supply chain? Are you ready to boldly go where few supply chains have been before?

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Risk v Rewards - Making the Right Decisions in Global Supply Chain PlanningThe last twenty years have seen amazing expansions in global supply chains. On the supply side, companies began looking for lower-cost sources from different geographies. Whether it was the US going to Asia or the EU going to Africa or the Eastern European countries to procure lower cost components, this concerted effort created a coordination challenge across a vastly extended supply network.

For supply chain managers the challenge became one of maintaining flexibility and the ability to respond to a dynamic market. Given extended supply chains and supply networks, how could customer satisfaction be maintained? How could the supply chain become demand-driven?

Now, as the reshoring debate heats up, companies are reevaluating their supply chain footprint. A crucial question everyone faces is: Is there a cheaper source? Or alternatively, can we keep our current source but derive added value from collaborating more closely with our supplier? In addition to cost, customer service level expectations are sky-high; everybody wants their order now. Long supply chain lead times make it tough to meet demand without piling up inventory in various places around the world. What is right strategy to balance cost and service while driving profitable growth?

The Collaborative DNA in Jeans

One global fashion company is tackling this challenge head on with their jeans supply chain, for which denim is a key resource. They’ve been able to create a demand-driven supply chain by understanding the marketplace trends around styles of jeans (for example, a bleach wash versus a particular cut). The apparel manufacturer has fostered close collaborative relationships with key suppliers around the world that allows them to share this data and effect some late-stage differentiation and postponement on materials to meet the specific demand for a particular style, color, size in a unique geographic region. This avoids building too much inventory and enables quick response to the shifts in customer sentiment. Moving the demand signal quickly from the actual customer to the supplier requires visibility to the inventory across the extended supply network and the ability to share demand and supply information. In turn, this demand-driven, collaborative supply chain helps reduce markdowns and improves margin return on capital employed. The company is not a vertically integrated brand. It doesn’t own suppliers, rather the suppliers are partners in planning a coordinated demand-driven response across a third party or a partner network.

When close collaborative relationships combine with process and technology to coordinate activities across the supply chain, everybody wins. By reducing inventory across the supply chain while capturing more of the demand, not only do margins improve, there’s much less temptation to hedge inventory and much less expediting required, all of which lowers cost and disruption. When suppliers are more strategic, they operate with more certainty that they’re providing value to the business.

Tackling Risk

Extending the supply chain to take advantage of lower costs has brought an unwelcome increase in risk. Risk is a significant fact of life when moving to a global supply chain. Executives worry about the repercussions of unanticipated events (meteorological, political, economic). For many companies, handling risk means taking a more proactive management approach, working to predict issues related to single-sourcing, for instance, or plans that are set in unstable environments. It may be wise to find an alternate supplier, or buffer inventory over the next few months. Risks can be analyzed by creating scenarios that reveal potential impacts, then practical mitigation steps can be prepared in case the scenarios play out. It’s important to democratize risk information so the company can respond to it.

An integrated business planning process brings all those aspects together so stakeholders can map out what to do if these issues materialize. Teams that rely on spreadsheets quickly learn that spreadsheets won’t stand up to that kind of scrutiny, and it takes too long to bring all the data together for smart decision-making. Spreadsheet reliance adds, rather than subtracts, risk.

When faced with the challenges of global supply chain planning, remember a few key priorities. Understand the risk in your network and how to mitigate it. Sharpen your inventory strategies. Work collaboratively with your supply partners. Capture your demand signals accurately and let good demand planning drive integrated business planning across your global network.

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The Next Generation of Excellence: Agility, Culture, InnovationConsidering the current appetite for “supply chain excellence,” I wonder if it is possible we’re focusing on the wrong things? Like cost and asset utilization, trying to become more efficient (faster delivery, lower cost, time to new product introduction) and more effective (asset utilization, higher levels of service, market share, customer retention).

These are all necessary drivers of business success but are they the only attributes that define true excellence?

We try to measure “better-faster-cheaper” by developing indexes based on margin, asset efficiency, inventory turns, supply chain cost as a percentage of sales, or growth. We’ve created maturity curves to track ourselves against our peers. We use this relative positioning to derive high-value improvement initiatives that will lead us up the maturity curve. “Here are the next ten steps to getting better-faster-cheaper.”

Don’t get me wrong, getting better-faster-cheaper is necessary for survival, but not necessarily a recipe for success or excellence. Improvement work is the stuff of 80-hour work weeks, but is it strategic? Yes, in the sense that continuous improvement is table stakes for company survival, but, no, in the sense that these improvements are by definition within the box.

Creating indexes and maturity models builds boxes that can keep us from exploring alternatives. Consultants and analysts can make money by defining a box and having organizations compete within that box for ascendancy.  Own the framework and you own the initiative.

If better-faster-cheaper is not “excellence”, what is? What else is there to measure when it comes to excellence?

How do you know if meaningful inventory optimization is possible for your life sciences organization? Supply chains in all branches of the industry involve high-value, high-margin items that tend to trap large amounts of working capital in excess inventory, so the potential benefit is real. If you are a medical device maker, you face challenges around assembly, procurement and kitting, as well as deployment into healthcare offices or third parties who serve them. If you are a pharmaceutical producer with a big-batch chemical front-end or an organic biological process, you face a packaging phase and a final pack stage.

But in an industry characterized by extreme service level requirements, multi-tier distribution networks, strict regulatory requirements, and a mix of high- and low-volume SKUs, it’s no wonder the desire to right-size is sometimes trumped by fear of disruption in supply. Just keep in mind that an inventory optimization initiative can transform global supply chain performance by strategically buffering inventory and setting time-phased inventory targets that handle shifting demand trends. Note that leading life sciences companies have achieved lower inventory levels while executing new product introductions more cost-efficiently and exploiting market opportunities more aggressively.

To get an internal dialogue about inventory optimization started, try asking your team these four questions:

1) Can We Safely Reduce Inventory? More and more over the past five years, the answer to this question for many life sciences companies has been “yes.” Optimizing inventory policies across raw materials, component operations, packaging, and distribution can shrink inventory cost by 15% to 30%, while providing 99%+ confidence in meeting product availability and service level requirements. Is your team ready to believe in it, too?

2) How Much Excess Inventory Do We Have…and Where Is It? Analyzing the amounts, locations, and causes of inventory being held across the supply chain—along with the interdependencies that drive excess buffering—is the first step to discovering ways in which repositioning and right-sizing stock can lower costs and improve customer service. For that, you need an astute inventory optimization technology solution that can model your global supply chain end-to-end.

3) Can We Cut Inventory By Handling Demand Uncertainty Better? It is well documented that mathematical algorithms outperform human judgment in managing demand uncertainty over time without causing inventory ripples (a.k.a. “the Bullwhip Effect”) between buffer pools at different locations across the supply chain. How much of a factor is fluctuating demand in driving your company’s levels of inventory?

4) Is Our Team Ready to Embrace Best Practices? With its heavy R&D focus, strict regulatory environment and long time-to-market, the life sciences industry takes a very deliberate course in implementing inventory optimization initiatives. If your readiness answer is based on solid executive-level support across functions (including supply-side procurement, production, distribution, sales and marketing, finance, and even R&D), then you already possess the most important ingredient in a successful inventory optimization initiative.

How do you score across these four questions? Is your supply chain up to the challenge to meet the increasing needs of today’s market?

I saw a blog topic the other day titled “My Biggest Mistake.” The intent of this topic was obviously to teach, to explore a hard but useful lesson a broader audience could benefit from.

…But I’m not really wired to think that way, so let me flip it around. Here are 9 things that I got right, whether by design or accident, that others could learn from.

1. Always embrace new ideas and learning – be curious

One of the biggest errors anyone can make is to think learning stops when you leave school. Learning never stops. You can benefit from learning something new at any age.

From the start of my career I looked for ways to learn new things and took advantage of any opportunities for structured learning. I had the great fortune to start my career at Digital Equipment Corporation, where they financed employees to gain additional degrees. They also offered free APICS certification classes for anyone who wanted to take the tests. I got my CPIM, which qualified me for new roles in consulting to the company’s Asia Pacific supply chain. I was able to travel the world, meet new people and take in new experiences I would never have known had I not raised my hand when those courses were offered.

Today, almost all the knowledge you could ask for is available to you. I am an avid reader and take advantage of travel time to consume 2-3 books a month—not just business books, but histories, biographies and the classics. Occasional Liberal Arts booster shots contribute to a well-rounded and thoughtful person. Feed your mind every day.

2. Travel and learn

Traveling around the world has taught me that people are people. There is no Us vs. Them. Mark Twain said “Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts. Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one’s lifetime.”

Don’t make the mistake of vegetating in one little corner of the earth, take advantage of opportunities to travel. Learn new cultures and shake off preconceived notions.

3. Cultivate the mind of a student

But what if learning doesn’t translate into personal growth? One of the most unfortunate mistakes I see is the dogmatism of knowing too much. When you embrace opportunities for learning, when you travel to other places, don’t make the mistake of thinking you know everything. Don’t make the mistake of thinking you know anything. The Zen teachers would tell you to approach learning with the “mind of a child.”

So look at each trip as an adventure. Whether boarding a flight for Copenhagen or Cincinnati, view it as a portal to new learning. When you start to think you know everything you become dull to the world.

4. Work yourself out of a job

Wouldn’t working to eliminate your own job be a mistake? Not necessarily. Once upon a time I developed and delivered training on a new product. Problem was, I got trapped in an endless cycle of doing the same training over and over. So I locked myself in a conference room for a week and recorded the entire training. Now I wasn’t the bottleneck. Anyone who wanted to get the training could just do it.

Don’t make the mistake of assuming your job or your role is a fixed entity. Work to retain the value but eliminate the job. Be the person who sets up systems and automates or eliminates manual processes. Set your proprietary knowledge free. Lead the charge and you will not only add value to your organization but will position yourself as a leader.  

5. Don’t be afraid of hard work and don’t give up too early

Expect that there will be hard work. Expect some failures, and be ok with that. Embrace it. You will find that most worthy projects follow a U-shaped curve. When you first start the project you will be excited and the work will be fun. At some point it will start to get hard and you will have to trust in the results without being able to see the finish line. You will have to fall down, sometimes multiple times, get up and keep working. Eventually the work will turn a corner and you will see the finish line. The work will become fun and meaningful again as you approach your goal.

When you find a project that is the right thing to work on or that you have a passion about, be willing to put in long hours of focus. Worthy results will come. To quote Mark Z. Danielewski, “Passion has little to do with euphoria and everything to do with patience. It is not about feeling good. It is about endurance.”

Patience and passion come from the same Latin root, which means to suffer. That doesn’t mean working for hardship’s sake. Rather be willing to apply and focus your energies on things you care about and things that will make a difference.

6. Never use the word “Overwhelmed”

There are a few phrases I have eliminated from my vocabulary. One of them is, “I feel overwhelmed.”

I think when you say “I’m overwhelmed,” you are telling the world that you are out of control and have given up. Whenever I hear the words start to form in my head I see them as a trigger. A trigger to take a step back and look at the choices I have made and the choices I am making. Don’t think like a victim. There is no such thing as being overwhelmed. There are only poor choices.

Instead of declaring yourself overwhelmed, see it as an indicator that you need to look at your priorities and decisions.

7. Never use the phrase “I don’t have time”

Another of the phrases that I have cut from my vernacular is, “I don’t have time.” This is usually a verbal crutch people lean on when in fact they are struggling to prioritize.

“I don’t have time to exercise.”   “I don’t have time to read.”   “I don’t have time to work on that project.”

Whenever I find myself starting to say “I don’t have time to…” I change the statement to reflect the reality, which is, this isn’t a priority for me. That changes the whole context of the thought. Feeling that you lack time is living in the world of scarcity. That scarcity attitude may bubble over into the other parts of your life and career. Cultivate an attitude of abundance. You do have enough time to do the important things. Time is abundant. Try to talk in terms of what should be done and what can be done. When you find yourself thinking “not enough time,” ask yourself if you know what the important things are.

8. Understand that you are a leader

Whether you manage people or not—whether you want to be one or not—you are a leader. Everyone you interact with in your life and in your career is influenced by you. You will attract or repel people based on your actions and your attitude. Act like a leader.

What is a leader? It is that person out in front of the herd finding the way. A leader has an attitude of abundance, doesn’t complain, and looks for ways to help their co-workers and company succeed.

Don’t make the mistake of thinking that you aren’t a leader. Be a leader in action and attitude.

9. It’s not about you

Finally, it’s a humbling but liberating concept that you don’t know what is going on inside other peoples’ heads. I guarantee they aren’t thinking about your problems or your challenges. It’s not about you. Let me repeat that. It simply is not about you.

Whether you are working on a problem, selling a solution or creating a blog post, what you are doing, or writing, or saying must somehow impact your audience. That’s a liberating idea. Now that you know, you don’t have to worry so much: all those thoughts that may be rattling around in your head regarding not being good enough, or smart enough, or strong enough are not important to others. They each have their own cacophony of thought that they are dealing with. Organize your actions and attitude to truly address the needs and wants of others. That is where you will find true success.

Remember that errors are the table stakes for growth, self-awareness and maturity. We all make countless mistakes in our lives and careers, but if we learn as we grow, we have the ability to keep what proves true while casting aside things that are not. Great mistakes teach you humility and the importance of service.

What do you think? Would you add any to this list?

We recently wrote a white paper called The Agile Retailer. In it, we examined how allocation practices are changing, especially for fashion retailers. As retailers face stiffer competition they are discovering and implementing new methods—not just faster fashion, but often introducing new brands and lines to capture distinct customer bases. Further, they are designing dynamic supply chain practices that hold lower inventories while serving those distinct new markets and customers. Specific to allocations, rather than having one big push out to the stores, the agile retailer has a data-driven approach to how, where, and when they stock, with dynamic movement of goods for rotating selections based on promotions or location-specific-demand, and fine tuning inventory stocking locations to support Omni-channel.

Think about it: If inventory is constantly in motion, then shouldn’t the transportation strategy be linked to this more dynamic allocation strategy? In fact, agile retailers are beginning to think about their business in a highly integrated fashion, understanding the implications from a sales and cost perspective and how all the parts fit together. This, de facto, is what separates an agile retailer from others. Not only are they constantly analyzing what is selling, but how to sell it better to create a profit-making enterprise. (Silly me to mention profit, don’t you think?) One only has to look at the lackluster retail financial reports to realize even a few extra pennies per item count. Only the best retailers survive and thrive.

We are wrapping up a survey (http://svy.mk/20bJgHz) to help answer the question, "how many SKUs should a planner plan?" Take just a few minutes today and we will post the results here on our blog in the coming weeks.

Take the Survey: http://svy.mk/20bJgHz

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