How Well Do You Respond? And How Fast Do You Do It?
Ask yourself… Will my business be more or less predictable in the future?
The answer for nearly everyone is "less predictable." So the next question to ask is… Will my next breakthrough in operations performance come from planning better, or from responding to plan variance better?
So yes, plan, but don't stop there. Complement your planning efforts with a strong response management competency.
What's response management?
Having pioneered the model of supply chain response management, Kinaxis is uniquely positioned to articulate what it means to manage change in your business. Response management is all about what you do when what you expected to happen (forecast) does not match what is happening (actuals).
Response management applies to any forecast, whether it is a traditional sales forecast, the projected cash position of a company, the expected completion of a new factory, or the commercial availability of a new product. If you plan an outcome, then response management is about monitoring performance towards that outcome, and course correcting with confidence when the plan strays outside of tolerance.
The effectiveness of decisions and actions in response to demand and supply variances can:
- Drive customer satisfaction and retention
- Dramatically impact inventory control and management
- Strongly influence business profitability or margin loss
- Have direct and profound implications to earnings per share (EPS)
A control tower solution with RapidResponse delivers the multi-tier operations and supply chain visibility, as well as collaborative "what-if" analysis capabilities to drive breakthroughs in response management across multiple business processes and organizational teams.
The components of response management
What drives the need for response management? It is the fundamental fact that we can no longer predict the future with acceptable levels of accuracy, and our success or failure is dependent on how effectively we respond to present conditions—how we manage in the "now."
What varies across industries, across functions, and across business processes is how far into the future we need to predict events, and how quickly we can affect change. But the common ground is that the time it takes us to detect significant changes and to decide on the best course of action will determine the flexibility of our operations and often the profitability of our business.
Compressing the time to detect
When an event occurs that creates risk or harm to your organization or supply chain, you need to know immediately. It may be that a customer has changed their mind about an order, or a supplier has de-committed on a delivery date or quantity, or that a natural disaster has wiped out a large part of your manufacturing operations capacity. Whatever the change, anticipated or otherwise, you must
- Know what event has occurred as soon as it happens
- Know what the impact is to your performance
- Know who is impacted and must be engaged to course correct
Until you know these three things you simply cannot act with confidence. With RapidResponse you can identify these critical elements in seconds or minutes.
Collapsing the time to correct
Once you know what went wrong, you need to act quickly to find a solution. This must happen through collaboration across multiple functions, even multiple tiers of the business, often amid competing objectives. The timeliness of resolution is a key factor in mitigating any potential damage to your operations. Often, it's the day-to-day events, such as when a customer changes their mind on an order, where most margin or customer satisfaction is lost because either the response to the customer is too slow or actions are taken with little understanding of the financial and operations performance impact.
RapidResponse provides three core capabilities that significantly reduce both the time to detect and the time to correct by:
- Representing a multi-tier, global supply chain in a single data and analytics model. It is imperative to have a single version of the truth that can represent several states of the supply chain—historical, present, and future—in order to detect significant changes and what could do future harm to the business. With RapidResponse, a single version of the truth extends far beyond static input data (e.g. master data, orders, WIP, inventory, etc), it includes key performance outcomes at the same time (e.g. fill rates, shortages, excess & obsolete inventory, order actions, margin projections, revenue projections, etc) in the same space. With all this information in place, your "what-if" analysis of the alternative ways of solving problems will be clear, complete, and confident.
- Determining who is impacted by the change. And therefore who needs to be alerted, not only in your own functional area, but also in other departments within your own organization, as well as in your customer, contract manufacturer, or component supplier organizations. No other solution in the world can both determine the performance impact of change, and simultaneously determine the team that must come together to collaborate.
- Bringing together those people impacted. Most supply chain operations teams are spread over multiple geographies, multiple functions, and often multiple enterprises (e.g. Contract Manufacturing). When unexpected events create risk/opportunity for you, the speed at which you bring together the right people to collaborate will make or break your operations performance. Think of RapidResponse as an online version of a war room whereby anyone impacted by either the original threat or one of the proposed actions are assembled to collaborate and align on a resolution. Each member of a collaboration can create, edit, and provide input on possible "what-if" scenario and ultimately reach a compromise on the agreed-to action plan. RapidResponse Control Tower is the only multi-scenario solution capable of driving effective human collaboration for your response management needs. Period.