Digital Forbes

Supply Chain Analytic Technology Continues to Advance


Steve Banker, Contributor

June 12, 2014

A recent report published by ARC got me thinking about the evolution in analytics I have seen over the past two decades.  I’ve covered supply chain applications in my tenure here at ARC.  These applications are of course a rich source of analytic data. But when I came into the industry reporting tools were the way in which that data was analyzed.

These reports were published on a periodic schedule and by the time they were perused, an important event that needed immediate attention may have been languishing for days. If a user wanted changes in the metrics they were looking at, IT help was required, and this never seemed to be a priority for IT.  The reports were not user friendly; users had to pour over reams of data to find nuggets of useful information.

Then the major supply chain and enterprise companies either acquired Business Intelligence (BI) firms or partnered with them. The results were dashboards. These dashboards came prebuilt with many of the metrics important to the supply chain discipline. They were user friendly – the metrics were often color coded red (pay immediate attention to this), yellow (take note), or green (all is well).  Many of the metrics were near real time in nature; some were based on data that was at most a day or two old at most.  If a metric was red or yellow, users could drill down and see the aggregated data and better understand where problems were originating.  And users could configure which metrics they wanted to see and how they wanted to see them.  This was a minor revolution.

Nevertheless, these solutions came pre-cubed, which means the data was being pulled from the supply chain solution providers own supply chain applications.  In reality, to fully evaluate an end to end solution, data needs to come from a variety of different applications, and perhaps even spreadsheets, not sold by the supply chain vendor.

But analytic technology is continuing to advance: it is more extensible and easier to implement. My colleague Janice Abel, who researches manufacturing analytics, wrote an article about Palmer Foundry’s use of manufacturing analytics.  One of the interesting things is that even though this foundry had purchased a solution from Northwest Analytics to use statistical process control and continuous improvement techniques to improve product quality, the solution had been extended.

After using the system on the shop floor for ten months, Palmer Foundry extended the technology to provide decision support for management in a variety of business operations, including the supply chain area. The foundry is now using the solution to examine the quality and timeliness of the raw materials they are receiving from suppliers.  According to Palmer’s general manager Jim Legrant, “They know that we are more savvy today and that we will hold them to deliver what we want, when we want it.” And they are using the solution to understand “external scrap,” which I take to mean damage caused by things external to the manufacturing process like shipping.  According to the article, “the software manages how Palmer allocates resources, makes workforce adjustments, and modifies incentives. By using the application to monitor capital spending, employees can determine how their actions will impact the business.”

I was also astounded by just how fast this solution was implemented. Despite the fact that the software was being connected to a variety of different data sources, the initial software installation with IT was performed in one afternoon with phone support from the supplier. The foundry spent another week configuring the reference manager that scans the databases for new data and updates for the control chart. The dashboards and alarm notification servers were also configured to send an email message when a rule or specification was violated. “The result was going from zero to full … capabilities in less than three weeks” according to Mr. Lagrant.

The project was quite successful. Customer loyalty and brand reputation are very important in this business. “Shipping bad product is one of the worst things that can happen, because we live and die based on customer feedback, our reputation, and word of mouth,” emphasized Mr. Lagrant. One customer commented, “You are doing something no one else is doing in the foundry industry – which is unique for a company of your size.” The technology has helped the foundry win new projects.

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