How Ingersoll Rand Revives Exhausted Products

By ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE

Industrial manufacturer Ingersoll Rand (IR) has long positioned itself as a company that prioritises efficiency, energy savings and productivity. As its website states, “With principled leadership and ethical business practices, our high-engagement culture delivers enduring results that lead to a sustainable world.” Recently, IR saw potential to create added value by helping its customers meet their own environmental challenges. As a result, company leaders are taking the conservation philosophy to a new level.

IR’s sustainability commitment includes the extremely ambitious goal of reducing not its own, but its customers’ carbon emissions by 1 gigaton by 2030. Greenbiz’s Heather Clancy reports that this is equivalent to the annual emissions produced by Italy, France and the United Kingdom combined. Much of the plan revolves around remanufacturing end-of-life equipment. (Read more after advertising)

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“[IR] has operated an aftermarket service organization in Charlotte, North Carolina, since 1974,” Clancy writes. “After all, many metals used to make its Trane heating, ventilation and air-conditioning equipment have a demonstrable value, and there are well-established processes for recovering it. But in more recent years, the 183,000-square-foot operation … has become involved with activities focused on a different sort of mission: keeping older equipment in the field for as long as possible.”

Scott Tew, executive director for IR’s Center of Energy Efficiency and Sustainability, told Greenbiz that the company is focused on the concept of a “customer for life.” He recounts the story of a historic hotel in Portland, Oregon, that needed to upgrade its Trane HVAC system but had limited access to remove and replace failing equipment. Engineers disassembled and transported components back to Charlotte for repair, then reinstalled them in the exact same footprint as the original system. IR expects them to continue functioning for decades.

IR says it will fully support this environmental strategy moving forward. In fact, the company has established a new-product-development requirement that directs engineers to design for sustainability. As Clancy writes, “That includes both efficiency considerations and materials choices.”

Far-reaching results

For years, IR has looked to the APICS body of knowledge as a source of best practices, the primary method for getting employees speaking the same language and a key method for working toward a unified supply chain strategy. In fact, the company adopted a policy that required all materials managers to become APICS Certified in Production and Inventory Management (CPIM) designees within 18 months of being hired.

Then, to sustain this investment in learning and development, IR rewrote its materials management job descriptions to require CPIMs for all incoming managers. In addition, staffing personnel began targeting CPIM designees for open positions. (Read more after advertising)

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Today, IR has hundreds of CPIMs — and the finance team reports that this investment has paid off. A recent analysis found a direct correlation between materials manager performance and APICS certification. Most importantly, we’re now seeing that this training has led to initiatives that clearly aim to create a better world through supply chain. Learn more about what this globally recognized standard can do for your organization, your suppliers, your customers and beyond.

To find out more about APICS training, contact Australasian Supply Chain Institute (ASCI) National office at enquiries@asci.org.au

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Machine learning and artificial intelligence for retail supply chains

How retailers can incorporate machine learning and artificial intelligence into their supply chain: A snapshot of the recent ASCI Networking Breakfast panel event

 

By Harsha Illindala, Vice President, Solutions Advisor – APAC at JDA Software

 

I was lucky enough to host a panel at a recent ASCI breakfast on new advances in machine learning and artificial intelligence and how they are helping retailers optimise their operations and supply chain. I was joined by Michelle Grujin, Managing Director, Retail Industry Lead ANZ at Accenture and Marcy Larsen, Industry Solution Executive, Retail and CPG at Microsoft.

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While these technologies are becoming increasingly important, we first discussed some of the macro trends influencing retail customers today, what makes them different to customers from 10 or 20 years ago to frame why investing in these technologies is so important:

  1. Hyper-personalisation

 

Retailers are now expected to customise the customer experience to the segment of one. Retailers need to cluster and segment more narrowly across all retail formats.

  1. Premiumisation

There is a growing interest in premium food, clothes and other merchandise. There has been growth in health, vegan and specialised foods. Customers are also concerned with ethical sourcing and fair trade. They want to believe in the product.

  1. Convenience

Convenience is the price of admission: customers expect retailers to be convenient to deal with. They prioritise this, often over price.

  1. Mobility

The ability to shop online from a Smartphone means customers are more mobile than ever before and can purchase from anywhere.

  1. Urbanisation and population

There is a changing population mix with more customers living in urban areas. Customers will favour retailers who prioritise inclusion and diversity and demonstrate authenticity.

  1. Talent

We then went on to discuss how talent in retail is changing. According to the 2019 Retail C-Suite Viewpoint surveyconducted by JDA Software and Microsoft, talent is a top three issue with the C-suite in retail.

The workforce is varied with more part-timers and a workforce with time constraints. The gig economy is mobilising millennials and the retired workforce. Employees now have the ability to achieve genuine flexibility and hold down several different styles of job which fits in with their lifestyle and personal constraints.

For retailers the focus is now less on workforce scheduling and more about engagement with employees. There is also a huge competition for skills so retailers need to create a dynamic environment which values their skills.

Engaging employees with technology that is as advanced, if not more advanced, than what they are able to access at home is important. Employees, just like customers, expect retailers to demonstrate inclusiveness, diversity and authenticity.

  1. Provenance in supply chain

Customers care about the claims made by brands and retailers about products. Smart looking packaging and brand advertising strategies are important. Environmental and societal influences, morality and accountability are priorities for the customer.

  1. Data

The influence of data is significant. Customer trust is established when the right data is provided. When there is transparency of data between suppliers – shipping through to store – it creates a better customer experience.

  1. Influence of digital

Customers expect the physical experience to be on par with the digital experience. Technology is transforming the customer: 75% of a customer’s visits to a store are influenced by digital and 58% of sales are impacted by digital, according to the 2019 Retail C-Suite Viewpoint survey.

Digital has changed the customer journey; digital is now the ‘front of store’. The customer journey has evolved to loyalty – discovery – research – purchase – fulfillment.

We then went on to discuss which technology, such as artificial intelligence (AI) and machine learning (ML), is emerging to help retailers meet the needs of the customer in light of these macro trends.

The Tech

We then covered technology that is playing increasing important role in the supply chain for retailers and why companies should be investing in them:

Technology for personalisation

36% of the C-suite in retail expect to undertake pilots using AI in personalised product recommendations, 20% for localised pricing and 29% for personalised product assortments.

AI helps retailers meet customer expectations around product availability and fulfillment choices – in-store, pick-up and delivery. Customers expect instant gratification when it comes to fulfillment.

AI also provides a flowing, single view of inventory and allows for dynamic allocation and fulfillment, predictive replenishment and a shorter product life cycle.

Technology for provenance in supply chain

AI and ML provide real-time visibility. Traditional systems such as ERP centric reports and dashboards are too slow, alternatively AI provides real-time and direct visualisation of supply chain data with ML identifying and weeding out data discrepancies.

Blockchain is becoming an increasingly common buzzword and is something that could old the answer to many provenance related issues. With Blockchain providing a method to manage forms of exchange, entities in a supply chain can with increased confidence know where each asset has originated

Technology for the workforce

Technology is changing rapidly and affecting supply chain practices. There are several workplace changes that will become more important to how supply chain operates.

With more virtual and contingent workers, automation, increased connectivity through workplace social networks (e.g. instant messaging, communities) and more advanced communication tools (e.g. virtual meetings, webinars) will become increasingly important. Apps (e.g. personal organisers, goal setting, real-time feedback, team activities) will play a role, as will gamification (e.g. realistic training scenarios to stress test and develop supply chain strategies). Artificial Intelligence (e.g. advanced data mining) will help identify business trends and opportunities.

Challenges in adoption

We went on to discuss the major challenges facing retailers in adopting these technologies.

Some of the key observations included:

  • 55% of retailers don’t have single view of inventory
  • 78% of retailers don’t have real time view of inventory
  • 50% of retailers believe their technologies are lagging
  • Most retailers have CDTOs / CDOs and in-house AI teams, but tangible and scalable innovations have been far and few between
  • Many retailers have started off by trying to understand “what will my data show”, but need to transition to “what action needs to be taken” as a result of those insights

Is technology simplifying supply chain or adding to complexity?

We went on to question whether an increasingly complex supply chain is being simplified or further complicated by technology. We agreed that technology can minimise store effort in handling product and create flexibility in flow volumes and mechanisms.

We also discussed automation. There are increased and more affordable automation solutions in warehouses and in-store. Automation delivers productivity but also narrows variations. This means there is a greater need to manage the inventory flow to leverage the automation. Retailers need to manage coordination across inventory planning, transportation, yard, dock and warehouse operations.

A big thank you to the ASCI for inviting me along to host this excellent and insightful panel.

If you have questions about how AI and ML can improve your supply chain, you can contact me at Sriharsha.Illindala@jda.comor visit the JDA website.

ASCI as Professional Accreditation Body

Extending an invitation to all Industry Peak Bodies in the Supply Chain

 

ASCI has positioned itself as the Professional Accreditation Body for the supply chain industry. In this capacity, it has developed a Professional Accreditation Scheme, in line with the criteria set by the Professional Standards Authority (PSA), which oversees the legislation for lawyers, accountants, etc.

Although ASCI has not yet obtained legislation for supply chain as a legislated profession, we are following the exact process in the expectation that we will one day be ready to seek formal legislation.

In doing so, the ASCI Professional Accreditation Scheme, in its current form, is the only one of its kind that is based on the PSA guidelines. To distinguish this from the offerings of other organisations, often also referred to as “Professional Bodies”, we need to understand the distinction between the various professional bodies in our industry. The term “Professional Body” is often used by Industry Peak Bodies in their reference to the fact that they serve the “profession”. They do indeed, but not as an accreditation body, rather an Industry Peak Body. They most often offer certification programs, rather than a professional accreditation scheme. Certification programs are not to be confused with a Professional Accreditation Scheme.

Here is the difference:

“Certification”, a formal process of assessing that an individual is qualified in terms of particular knowledge or skills. It requires the candidate to study a particular learning set and write an exam on this set of knowledge in order to obtain certification.

“Accreditation” which, as in the case of lawyers, accountants, engineers, etc provides independent recognition of achievements and maintenance of the exact standards required to join the community of professional supply chain professionals and practitioners.

Professionals and practitioners registered under the professional accreditation scheme, are recognised for their competence, ability, integrity, and service to the profession. It is a voluntary means of demonstrating professionalism and involves being held to account by your peers for your abilities and adherence to ethical standards.

It is in this context that ASCI has commenced discussions with several Industry Peak Bodies in the supply chain domain, with the objective to offer registration against the Professional Accreditation Scheme through these Industry Peak Bodies, to their members, making the scheme more accessible to the broader supply chain community. Peak Bodies that are interested in offering professional and practitioner registration to their members can do so by affiliation with ASCI.

If you represent a peak industry body then we want to hear from you. Contact Our National Office at professionalisation@asci.org.au to commence discussions. It is through our common passion for the sustainability of the supply chain community that we can collectively raise the bar of supply chain management in Australasia.

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Dr Pieter Nagel is Head of Professionalisation at ASCI. Contact him about collaboration or registration at professionalisation@asci.org.au

Are we ready for Industry 4.0?

Guest Blog: Rob Stummer, CEO, Australasia, SYSPRO

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With all the discussion around Industry 4.0, how ready are we for it in this region and how many manufacturers have fully embraced it? It’s widely agreed that manufacturing has experienced a decade of productivity stagnation and demand fragmentation and the fact is that this level of innovation is long overdue. It’s been proven that the Australasian organisations that have taken Industry 4.0 innovation to scale beyond the pilot phase have experienced unprecedented increases in efficiency with minimal loss of employees.

The main issue reported by McKinsey and the World Economic Forum is that most companies appear to be stuck in the pilot phase and despite all the research and evidence saying that it will lead to a sizeable increase in global wealth production, benefiting people throughout society, the Australia and New Zealand governments have not done enough to help its advancement.

Globally it is having an impact globally across multiple sectors, simplifying things by streamlining processes, reducing human labour, fostering global interconnectedness and leading to unlimited possibilities. But is Australasia really ready for Industry 4.0?

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Automation won’t take jobs

There has been a lot of scaremongering about the risk to jobs due to automation, but technology and changing consumer preferences are driving the demand for new skills and jobs. In many cases, these emerging technologies have improved processes without shedding jobs and have made businesses more competitive than they have ever been, resulting in lower prices for consumers, higher wages for employees or higher profits, leading to increased demand and more jobs.

The previous industrial revolutions have shown us that, in the long run, technology and other labour market changes have been positive for many employees, removing the jobs that nobody wants to do as they can be unpleasant, physically exhausting and dangerous or boring and repetitive.

In smart factories, the emphasis will be on adding value, and up-skilled workers will be highly sought after for their specialist knowledge and ability to innovate.

Will bots take over the world?

There are a lot of myths surrounding AI, and science fiction movies often portray it as robots with human-like characteristics taking control and using their super-intelligence against us. There’s no doubt that AI does raise a whole host of complex questions, and that the current way the industry does certain things will become defunct.

We can’t ignore the fact that the Australian manufacturers that are leveraging AI have made their companies far more efficient and productive. This is a trend that their leaders see as inexorable, and the pressure on them to adapt and compete is huge.

Automation is essential

Automation is working extremely well in several different manufacturing scenarios, particularly when finite precision is needed, in challenging or dangerous work environments, where repetition happens and when personalisation and configuration are required.

So, what does automation look like in practice in an industrial environment? There are many tasks that could be carried out by a robot; not only would they be more efficient, but also the employees could then focus on more complex work.

The real benefits of automation are what makes it truly worth the investment, including increased efficiency, reduced costs, improved safety and wellbeing for employees, due to avoiding monotony and a clear competitive advantage over manufacturers that choose not to automate. Automation is clearly the future of Australasian manufacturing and its influence will only increase as competition from China and other developing Asian nations grows.

Rob Stummer is CEO, Australasia, SYSPRO

 

 

Spacious Potential in the Sharing Economy

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By ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE

The sharing economy is no longer just a catchy turn of phrase; today, sharing, renting and subscription services are everywhere. AirBnB for your holiday rental; WeWork for freelancers who prefer the office environment; Rover for the pup’s midday walk; Uber and Lyft when you need someone to drive you places; and Zipcar, LimeBike or Bird Scooters when you’d rather do the driving yourself. The potential applications are endless.

Although only 19 percent of U.S. adults have engaged in a sharing-economy transaction, PwC research reveals that 83 percent of survey respondents believe these services make life more convenient and efficient, 76 percent say they are better for the environment, and 43 percent admit that owning things can feel like a burden.

As ownership becomes unfashionable, the fashion industry is also taking notice.

“In October, the mall fixture [Express] launched Style Trial, a service that allows customers to borrow up to three pieces — with no limits on exchanges, free shipping both ways and free dry cleaning — for $69.95 per month,” writes Jasmin Malik Chua in Sourcing Journal. “If a subscriber loves something to death, she can buy it at a discount for keeps. Otherwise, she can keep garments circulating in an eternally refreshed ‘closet in the cloud’ with virtually infinite options yet zero commitments.”

Jim Hilt, Express executive vice president and chief customer experience officer, explains that this allows customers to tap the company’s “full assortment and styling services without breaking the budget.”

In addition to this kind of flexibility and cost savings, sharing clothes eliminates the hassle of shopping malls and the time spent packing bags for donation — not to mention all those minutes staring at our wardrobes trying to decide if an item still sparks joy.

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Shifting business models

Until very recently, most of us would never have considered staying in some random person’s home while on vacation, let alone sharing a sweater with a bunch of strangers. Yet today, Airbnb averages 425,000 guests per night — nearly 22 percent more than Hilton Worldwide.

“The data shows, renting and sharing are becoming increasingly popular alternatives,” the PwC report asserts. “Executives will be wise to assess the role of their product and brand in this model — are you squarely a purveyor of goods, or are you an enabler?”

For those supply chain managers bracing for change and facing some tough calls concerning clothing lifespans; quality control of shared garments; and logistics economics, especially for lower-cost items, there is some good news. The sharing economy is also flourishing in the education space, with LinkedIn Learning, Grow with Google, and a seemingly infinite number of instructive and informative videos on YouTube. Our own channel is bursting at the seams with customer success stories, webinars, research, annual conference sessions, and a multitude of supply chain education tailored to fit just right.

To join ASCM, joint membership is available through Australasian Supply Chain Institute for just $440 per annum. Visit our website for a full list of membership benefits.

Indian regulations rain on Amazon and Walmart’s e-commerce parade

By ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE

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Amazon and Walmart subsidiary Flipkart is scrambling to revamp its supply chains, vendor relationships and systems. New regulations from the world’s fastest growing economy have undermined these retailers’ business models and obstructed their sales in India’s burgeoning e-commerce sector.

Previously, foreign companies were forbidden from holding their own online inventory and shipping it directly to customers. Amazon had found a workaround in the form of local subsidiaries of firms in which it had holdings, which opponents insisted was violating the spirit of the rule. Largely due to such proxy sellers, Amazon and Walmart had controlled almost 80 percent of India’s e-commerce.

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But as of February 1, such goods are not permitted for sale by foreign companies. In addition, these firms are barred from entering into exclusive online sales agreements. A vendor’s inventory also will be considered under the control of an e-commerce marketplace if more than one-quarter of its sales are derived there.

The protectionist move follows ongoing complaints from domestic retailers over anticompetitive practices. Amazon and Walmart both requested a six-month postponement of the effective date but were denied.

“Thousands of products were pulled from Amazon.com Inc.’s India website Friday — the first direct impact from the country’s new e-commerce rules,” writes Corinne Abrams in the Wall Street Journal. The article goes on to explain that the restrictions are the latest effort by India to curb U.S. tech giants’ dominance in the country and “promote homegrown companies” as Prime Minister Narendra Modi seeks a second term.

“Both Amazon and Walmart have made big bets in India, where the e-commerce market is estimated to balloon to $72 billion in 2022,” Abrams adds. “Amazon has pledged to invest $5 billion to expand in [India], while Walmart’s takeover of India’s Flipkart for $16 billion was its biggest acquisition ever.”

Global supply chain know-how

The operations of these e-commerce giants have been thrown into disarray. As these companies, and others, navigate such severe regulatory pressure, success will hinge upon the effectiveness, responsiveness and flexibility of their supply chains.

ASCM provides the resources you need to plot your own course through the ever-shifting global marketplace. The APICS Certified Supply Chain Professional (CSCP) program enables individuals to master the fundamentals of supply chain strategy, business model design, relationship-building, risk management and much more. In particular, the CSCP learning system includes a module centered around monetary, regulatory and trade considerations; negotiation and collaboration; and international standards and compliance. Begin your journey toward this world-class certification today.

The Australasian Supply Chain Institute (ASCI) is the Premier Channel Partner for APICS and offers joint memberships with ASCI for local and ASCM for global membership for both corporates and individuals. Contact us today at http://www.asci.org.au/membership or enquiries@asci.org.au.

Nufarm site visit generates sharing

As part of the ASCI Site Visit Series, ASCI arranged for 14 ASCI Members to visit the Nufarm Raymond Rd manufacturing facility on Friday 25 January 2019.

Both nbn Co and Nufarm are ASCI Corporate Members, and within the ASCI Corporate Membership package, comes the benefit of sharing and learning within the network.

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Site Manager, George Fletcher gave the group an introduction to Nufarm and the site, see picture.

According to Angus Borland, Supply Chain Planning Manager – ANZ, Nufarm, the group enjoyed the balmy 44 degrees for a walk through a number of the production lines, followed by a planning discussion he led alongside two site planners (Michael Buttigieg-Raymond Rd and Matt Calabro-Pipe Rd).

“This was a good 2-way discussion between Nufarm and nbn Co,” Angus recalls.

Ryan Jones, Manager Integrated Demand Planning, nbn Co agrees. “The two organisations couldn’t be further apart in terms of industry. However, there were so many similarities both in forecasting and planning systems; S&OP processes; safety; and challenges such as demand accuracy and the management of inventory,” he said.

“In addition, we could really appreciate the weather challenges faced by the organisation and were impressed with Nufarm’s long term strategies and predictive analysis.”

There were some key areas identified where a visit to non Co could benefit the Nufarm demand planners. Hence, the sharing and learning process is in motion!

Look out for more events within the ASCI Site Visit Series, held all over the country in 2019!

 

Embracing the IOT

By APICS CEO Abe Eshkenazi, CSCP, CPA, CAE

We keep hearing about the potential of the Internet of Things (IOT), but how will it help supply chain professionals specifically? Last week, Industrial Distribution ran “Improving Process Flows in the Delivery System through the Internet of Things,” which outlines the practical applications of IOT.

“As the development and deployment of the IOT capabilities continues to expand, [transportation and logistics] companies could eventually have visibility into every operation across the entire supply chain, from the source of the raw materials to the end use of the product,” writes Thomas Schied, vice president and director of asset management for TD Band Equipment Finance.

IOT connects devices to the internet and collects data, but Schied stresses the value is in knowing how, when and where to use the data. Predictive analytics enables business leaders to make calculations that will increase efficiencies, reduce spending and improve overall processes. For example, data from sensors can be combined with historical data to establish when assets need to be replaced. Likewise, transportation and logistics companies can use sensor data and geographic and environmental information to customize truck maintenance plans.

Further, IOT data and analytics supports organizational decision making, as experts alter routes to prevent bottlenecks at loading docks and changing inventory locations. This information improves on-time delivery and reduces fuel and labor costs.

With all the promises of IOT, Schied does mention likely challenges. These include the potential of security breaches, a reallocation of current jobs and business disruption.

“Additionally, the IOT is expensive and time consuming to implement, and the more parts of a business that are integrated into an IOT system, the more disruptions that business could face,” Schied writes. “However, integration can be conducted in stages over the course of several years.”

He adds, “As we see logistics and supply chains become more complex, implementation of IOT is necessary.”

We’ve transformed our business to help transform yours

IOT is one example of how the world of supply chain is rapidly evolving. Technological advances combined with a renewed focus on sustainability and more, make staying ahead of the curve a challenge for corporations. That’s where we come in. In January 2019, we are officially launching the Association for Supply Chain Management (ASCM). This is more than a new name or a rebrand, this is an entirely new association. With ASCM, we expand our reach and broaden our impact, becoming the leader on all things supply chain. Plus, we’ll still do what we’ve always done — give your supply chain team the tools they need to advance their careers and create value for your company.

Abe Eshkenazi
APICS CEO

Five reasons why APICS CPIM is a must for every ERP user and consultant

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For the most part of my career, I have been known to be an active member of the APICS community. This means that, quite frequently, I interact with SCM practitioners and ERP consultants from different industries and with different professional backgrounds. During discussions, I am often asked what ways are best to acquire more in-depth-knowledge of the SCM/ERP domains.

Drawing from my 9 years of extensive, hands-on experience in the fields of Supply Chain Management and SAP ECC ERP implementation/support within the Pharmaceutical and FMCG industries, and a unique techno-functional skill set in SCM enabling technologies and Domain Expertise in the SAP PP/PP-PI module, I have compiled some advice for others.

When reflecting on numerous SAP ERP implementation/improvement projects, I keep falling back on the certainty and solidarity of the APICS certification: Certified in Production and Inventory Management (CPIM) which I believe was one of the main factors that led to my implementation success. Here are five reasons why I believe the APICS CPIM is a must for every ERP user and consultant:

  1. It harnesses your talents: It is widely believed that a lack in SCM talent is the reason behind many ERP implementation failures or less than optimal ERP performances – both the user/consultant sides. And while there is no one-size-fits-all kind of advice, the APICS CPIM certification has so many benefits to both users/consultants that I almost always advise people to pursue APICS CPIM because it is more about getting the best ROI of an ERP implementation.
  2. It follows a process-orientated approach: ERP commercial packages are all built to computerise the classical value chain activities of a company. These value chain activities are resembled in the modular structure that all commercial ERP packages follow. For example, business processes relating to Supply Chain Planning including, Sales and Operations Planning, Demand Management, Production Planning/Scheduling would be found under the Production Planning “PP/PP-PI” module in SAP ECC ERP. Likewise, other business process compromising a company’s value chain would be found as “canned” business processes across different modules of an ERP solution. The CPIM follows a process orientated approach to Supply Chain planning in a fashion that’s is almost identical to what is found in a SCM/Manufacturing Modules of and ERP package. This strategic fit between how ERP systems are structured and the process-oriented structure of the CPIM courseware is what makes CPIM the most powerful framework for SCM/ERP professionals in both user/consultant roles.

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    Australasian Supply Chain Institute offers the CPIM Learning System for self study or together with Guided Learning sessions, available right across Australia

  3. It mirrors the same language as your ERP: The concepts and terminology of an SCM/Manufacturing module of an ERP system, such as MPS/MRP, BOM, phantom assemblies, time fences and forecast consumption techniques, just to name a few, that prove tricky for most users/consultants to grasp are explored in-depth in the CPIM courseware in an a clear and easy to follow approach with plenty of real life examples. This helps to better utilise system functionalities/features that are likely to be ignored due to the lack of underrating of such concepts.
  4. It builds confidence to apply a configuration effort: CPIM equips designees with knowledge that proves critical to guide system configuration efforts in the SCM area.
  5. It results in better, more streamlined implementations and a higher ROI for digital transformation efforts: Many companies the likes of BASF, DuPont and Intel have adopted APICS frameworks which helped them achieve organisational goals and increase the efficiency of their systems and people. It’s why over 110,000 other SCM practitioners around the world have attained the CPIM. Now it’s up to you. https://www.apics.org/apics-for-business/customer-stories

By Hatem Abu Nusair, M.Sc. Engineering, CPIM-F, CSCP-F, SAP Certified Application Associate, APICS Master Instructor

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Hatem is a Global Supply Chain Management & ERP Expert. He is currently the Production Planner at Tip Top, one of GWF’s divisions in Sydney, having moved from Jordan where he worked for a blue-chip international company that grew rapidly. Here, Hatem founded the Regional Middle East & North Africa (MENA) Supply Chain Department with the purpose of optimising Supply Chain performance across 13 subsidiaries through demand management and forecasting, capacity management, inventory control, and special projects, which entails: IT initiatives, ERP implementation, re-engineering of Supply Chain processes and other relevant matters.

Hatem is a qualified Industrial Engineer and a Master of Manufacturing Engineering candidate at UNSW. He is a Certified Fellow in Production and Inventory Management (CPIM-F) by APICS, a Certified Fellow Supply Chain Professional (CSCP-F) by APICS and a Certified Application Associate by SAP SE.

Hatem will be facilitator for Term 4 CPIM Part 2 Guided Learning for Australasian Supply Chain Institute where will be share his passion of streamlining supply chain processes, eliminating redundancies and utilising enabling technology to achieve operational goals with CPIM Part 2 students.

 

 

Warehouse of the Future: Adopting Automation within Your Supply Chain – Part 1 of 2

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There’s currently a digital supply chain transformation that’s happening faster than the physical supply chain can react, requiring hybrid solutions in semi-automated environments where humans and robots work in tandem. New incentives to modernize operational capabilities should be added that capture efficiencies not previously achieved, while laying the foundation of a digitalized supply chain, continuously re-evaluating plans and evolving for performance.

Automation has been looked at as a solution to operational challenges, but trends in the marketplace signify an unprecedented rate of adoption taking hold in the coming decade. E-commerce is driving service expectations to levels that may not be achieved without the use of highspeed picking alternatives to manual operations. The aging generations in mature economies and challenges securing a loyal millennial workforce for repetitive tasks are creating increased disruption to staffing, forcing employers to look to automation to offset risk of labor shortages. Continued innovation has reduced costs of entry for automated capabilities, delivering improved business case justification for automation of many forms.

With such a strong justification, operations leaders across the globe are seeking ways to capture the potential that automation offers. Large scale transformation of distribution networks is capital intensive, however, and rarely warranted given the pace of change – however rapid – and market uncertainties. Therefore, we’re forced to look within existing environments to identify opportunities to introduce automation into existing facilities, combining automated equipment with manual operations, which requires the added complexity of orchestrating work across semiautomated operations. This scenario introduces the question of how to create an optimal environment allowing warehouse management systems (WMS) to orchestrate work across manual and automated areas to ensure efficient operations and maintain quality and service levels.

Part 1 of this 2-part blog series will take a deeper dive into today’s automation systems landscape and retrofitting today’s supply chain with automation. Part 2 of the series will cover disruptive technologies and digitalization and next generation capabilities.

The Current Landscape of Automation Systems

In automated environments, WMS often work alongside warehouse control systems (WCS) that manage the routing of containers as they traverse the material handling equipment, and warehouse execution systems (WES) which often have basic task management capabilities but not the level of control or optimization of a WMS. Below are a few general groupings of automation that typically leverage these entities in different ways.

  • Conveyors and sortation equipment receive destination / routing information from the WMS and leverage the WCS to divert containers to the appropriate location.
  • Pick execution equipment, including pick-to-light, carousels, or A-frames will receive pick instructions from the WMS and rely on the WCS to control the MHE. At times, these devices will manage task distribution and user interfaces for the performance of picks, though often, the WMS will manage the tasks through prioritization, and provide a common user experience (using consistent equipment where appropriate) for work performed in the pick modules and in bulk storage which feeds it (this work would include putaways, cycle counting, and picks where appropriate). Often, a WES has been sufficient for high volume outbound operations in retail, but with increasing emphasis on service levels, the advanced functionality of a WMS specific to inventory accuracy, pick module replenishment, cross-docking, and exception handling, the WMS brings a strong justification for a two-pronged approach.
  • Automated guided vehicles (AGVs) and automated storage and retrieval systems (ASRS) are well established, though adoption is increasing as more forklift providers offer driverless units. These units can take direction from a WMS (typical when involved in semi-automated environments) or WES (often used in ASRS racking systems where materials are commingled or when the vehicles can follow multiple routes to alleviate congestion). In either scenario, a WMS is often utilized to manage inventory allocation to customer and order.
  • Palletizers use visual determination for pallet building capabilities, but most in use require some level of consistency in product dimensions at the layer level. Advanced pallet building and robotic arm picking capabilities are increasing in use, but require some consistency in dimensions. Improvements in digital sensing will soon be changing the game here.

Retrofitting Today’s Supply Chain with Automation

Automation adoption will continue to accelerate in response to advanced service level expectations and e-commerce, with a focus on scale and speed, whereas a continued migration of margin focused businesses will drive adoption of driverless vehicles and high-density storage modules, especially in cold storage or mega-cities with high volume real estate. The introduction of automation into the existing facilities will bring challenges, such as:

  • Traditional footprints, system capabilities, and business processes will be challenged when faced with the introduction of conveyance, sortation, and pick execution equipment. A natural inclination to delineate businesses, and potentially create channel-specific operations, can result in artificially inflated inventory levels and/or reduced service levels in increasingly sensitive environments to failures in this area. Multi-channel capabilities can be achieved, often driving operational leaders to adopt pick execution capabilities to distribute work without recognizing the backlash to overall service levels of having disparate capabilities with traditional WMS controlled processes. The results, if not thought through, can have repercussions on inventory accuracy, exception management, and operational efficiency.
  • The introduction of driverless vehicles (AGV or ASRS) offer strong advantages in terms of scale and cost, ROI projections in union environments can often deliver break even points less than a year after go-live, even in new projects. However, legacy storage equipment and material flow can introduce limitations. The environments best prepared for the introduction of driverless forklifts are those managing full pallets in bulk locations (where dimensions are predictable and stack requirements are well documented), or those where racking capacity is capable of managing fixed locations that can be tracked in the WMS (if locations can be dedicated to a specific lot), or in the WCS (where multiple pallet locations can be managed by the WCS but the WMS can manage storage/allocation in concert with non-automated areas). In more complex operations, the WCS can take a more active role in determining work and allocation, but this often drives customization and redundancy with WMS functions specific to the needs of the business.
  • More robust, piece level management in advanced pick modules controlled by ASRS such as goods-to-person automation, offer advanced capabilities for high volume distributors and e-tailers. Often, this will require tote storage of product to standardize the storage capabilities, though concessions for non-conveyables must be considered. Integrating pick and pack operations with traditional areas of the same operation also force decisions on how to integrate inventory management with shipping capabilities, adding complexity to projects as WMS and WCS providers offer similar capabilities.

Check back for part-2 of the blog series, where we’ll go into more detail around the technologies driving next generation warehouse automation and digitalization and next generation capabilities.

For more information download the Future Series white paper, “Adopting automation in the digital age.”

About the Author

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Matthew Butler, Industry Strategies Director, JDA Software

More more information contact, 0414 966 232.

Visit www.jda.com