Kinaxis Industrial Equipment Brochure

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Industrial Equipment manufacturers have long understood the need to seek out global markets. Construction and agricultural equipment has long been supplied into countries around the world, and more recently manufacturing equipment as the developing nations industrialized. Increasingly components and even sub-assemblies are been outsourced, greatly increasing the complexity of the industrial equipment supply chains. Regaining control of the extended supply chain is crucial to continued profitability in the face of constant change and increased variability. Delivering to global customer expectations while coordinating the extended supply chain in an environment of constant change is the core reason our Industrial Equipment industry customers have adopted Kinaxis™ RapidResponse™.

Industry Dynamics

Industrial manufacturers have seen a trend toward a greater share of supplier content in the products they manufacture as they seek cost savings in an increasingly global market. Many of the supplied parts can only be sourced from one, or maybe two, suppliers, often in a different region of the world, leading to high risk for the industrial manufacturer. And, growing global competition has elevated customer leverage and expectations.

While most industrial manufacturers operate relatively low-volume, non-commodity businesses, this doesn't prevent them from having demanding customers. A growing number of customers expect to make configuration and other changes right up to the last minute, often in conflict with component lead times and frequently jeopardizing their already aggressive delivery timelines. The result is a situation where profitability and customer expectations are often at odds. Increased buyer sophistication in emerging markets have driven up the need for product differentiation across markets, and hence the complexity of the supply chain.

Today's Challenges in Industrial Manufacturing

Many manufacturers lack the required process standardization in manufacturing, inventory and supplier management, and other core business disciplines to cope. And collaboration across the players in the supply chain is often inefficient and insufficient.

The streamlining of manufacturing and distribution processes in order to satisfy demand while reducing unit cost is therefore becoming increasingly important in maintaining profitability, reducing inventories and enhancing competitiveness within the industry.

To meet the many challenges that has emerged as a result of these new industry dynamics, Industrial Equipment companies have adopted process improvements, such as Lean Manufacturing, as well as technologies targeted at removing business "silos," improving collaboration, and increasing productivity. Above all else, Industrial Equipment companies have turned to technology to keep a finger on the pulse of the supply chain in order to detect changes and understand consequences, by providing a collaborative environment in which the all partners in the extended supply chain can create and evaluate alternative responses to the change.

A New Paradigm, for a New World

Solutions must embrace the reality that today's supply chains are multi-enterprise in nature and, thus, must provide clear visibility into the extended supply chain, along with tools that understand this virtual enterprise and its nuances. Today's solutions must:

• embrace and leverage human judgment, since the number of unplanned events with high risk to the business is on the rise
• arm front-line staff with tools for risk trade-off and response, to deal with these situations quickly and appropriately to ensure a profitable response is put into action
• foster team-based decisions that tap the collective insight of the right people in the organization — those that understand the potential impact of any unplanned event and proposed action alternative
• enable people to leverage a single system with one set of data, no matter what the problem — whether it is a demand, supply or product issue that needs to be addressed

Many of these requirements are extremely difficult, if not impossible to capture in a mathematical model — the foundation of an optimization system. And if they can be modeled, the speed at which they change and the time it takes to formulate the mathematical model make it infeasible.

To deal with today's increasingly complex supply chains, you need an integrated solution that empowers your staff with planning, monitoring and response capabilities. Legacy demand planning and supply chain planning systems were not designed for today's complexities.

Meeting the Challenges of Constant Change

RapidResponse starts by delivering supply chain visibility across your multi-tier, multi-enterprise supply chain. By delivering this visibility to all the appropriate staff within your supply chain organization, you regain an understanding of the manufacturing commitments and inventory positions throughout the supply network.

This is an essential pre-requisite to being able to develop supply chain plans and coordinate the right compromise when things don't go according to plan.

RapidResponse proactively brings these situations to light, identifying not only unplanned events, but also identifying and quantifying the consequences to customer service, revenue, margin, and a number of other financial and operations metrics, and thereby flagging those that could do harm to your business so immediate action can be taken by front-line responders.

RapidResponse then delivers your team the tools to evaluate the effects of alternate courses of action on your customers, your inventory and all of your key performance indicators (KPI) so you can detail and select the appropriate course that maximizes your performance to these metrics.

RapidResponse includes specific functionality required by Industrial Equipment companies. From "clear-to-build", to "line-of-balance", to alternate parts and part equivalency capabilities that provide a summary risk perspective on the ability of manufacturers to satisfy demand. This allows management to focus resources and make critical purchasing, manufacturing and distribution decisions.

RapidResponse is a proven solution to today's pressing supply chain management challenges at many of the world's leading Industrial Equipment manufacturers.

For example, one of our customers, a long time user of RapidResponse, was initially faced with the need to give customers a reliable delivery date in the face of constant changes to the forecasts, along with customers ordering items which were not in the forecast. Given the highly configurable nature of their product, they were always faced with a high mix of product that required close coordination with contract manufacturers and component suppliers. Without a quick response, their customer would have sourced alternative equipment from a competitor.

The challenges they faced included gathering existing inventory information from a number of locations, including at contract manufacturing locations, as well as understanding component availability. Equally important was their ability to include suppliers of key components (which are delivered to contract manufacturers) in their decision making process through the adoption of Lean principles and processes in order to reduce the order lead times.

Inventory liability at suppliers of key components was reduced by over 30%, translating in inventory reductions of over $4 million.

In summary, this customer determined that RapidResponse was the best one-stop solution for demand, supply, and inventory planning, simulation, and reporting.

Reaping the Benefits

Deploying RapidResponse will improve operations agility and efficiency because of greater responsiveness to change by being able to plan, monitor, and respond in a collaborative environment that promotes human judgment to reach compromise.

The benefits range from reduced inventory, to improved customer service, to increased margin capture, and reduced excess and obsolete components. These benefits have been proven over and over again in successful deployments across many industries and from large multi-national organizations to small, single site companies.

ABOUT KINAXIS

Kinaxis™ helps manufacturers manage increasing business complexity and achieve operations performance breakthroughs with its proven solution for demand and supply chain planning, monitoring and response. Kinaxis RapidResponse is an on-demand service that enables collective risk tradeoff and response to change by empowering front-line decision makers with integrated tools for supply chain visibility, demand management, supply management, sales and operations planning (S&OP) and supply chain risk management. Global leaders such as Casio, Jabil, Qualcomm, and Raytheon are realizing superior customer satisfaction and a competitive advantage with RapidResponse. For more information, visit www.kinaxis.com or the Kinaxis blog at www.21stcenturysupplychain.com.

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