Manufacturing
Distribution Intensive Industries: Consumer Package Goods / Fast Moving Consumer goods/Consumer Durables/Apparel
›› The Ayana-Logis Point of view :
One of the most common problems facing Distribution Intensive companies across the globe is to match the demand and supply. While one would argue that this problem exists in most industries, the nature of this industry is such that if the product doesn’t reach a consumer demand point at the right time and at the correct price, the consumer will go somewhere else. Opportunity cost and lost sales can be huge! Within the same organisation, the upstream manufacturing unit is constantly faced with the conundrum of how much to make, what to make and what’s the best possible time to make it. Failing to balance demand and supply has serious consequences not only to the manufacturer but to the entire trading network eco-system.
Keeping demand and supply in balance is a constant struggle. The consequences of poor customer service, high inventories, cash flow difficulties, and failure to meet planned business goals lead companies in search of a process to better manage the delicate balance of demand and supply.
›› The Ayana-Logis solution focus:
Sales & Operations Planning (S&OP)
Sales and operations planning (S&OP) is a business process that helps companies better manage demand against supply. The APICS disctionary defines the S&OP process as “ the function of setting the overall level of manufacturing output and other activities to best satisfy the current planned levels of sales, while meeting general business objectives of profitability, productivity, competitive customer lead times, inventory and/or backlog levels etc.” S&OP enables management to establish the desired levels of customer service, inventory levels, and production plans. More importantly, it guides the organisation towards managing their business proactively towards optimal performance.
›› The Ayana-Logis approach:
› Define the process: The S&OP process is rigorous. Held on a monthly basis in most cases, it includes representatives from most functional areas, including top management, sales and marketing, manufacturing, engineering, finance and logistics. The goal is to reach consensus on demand and supply on the current status and future plans for all product families.
› Break the process into “Demand Improvement” and “supply Improvement”: History has proven that any new concepts are easier to swallow if administered in small doses. The logical split is to reach efficiency and consistency in Demand and Supply separately. The entire one number consensus forecasting process establishes confidence in the number. It also gives an opportunity to all stake-holders of demand to provide inputs to the base forecast. Once the organisation has had a handle on the demand and the accuracy is within acceptable standards, its time to plan for the supply. Here we are talking about better distribution planning, better deployment planning and better production planning. The value proposition in this approach is better inventory management in the entire supply chain and at the same time being able to get the right products at the right place at the right time at the right cost!
› Choose tools for improving “demand” and “supply”: Ayana-Logis offers the most comprehensive and proven software tools for “demand” and “supply” management. These robust cutting edge tools are rich in functionalities and are proven in their quality of output. Their strength also lies in the collaborative framework that wraps around these engines, thus getting the latest market inputs from the field. While the implementation of “Demand Planning” and “Supply planning” tools can be done sequentially, the inherent integration that exists between these enables S&OP immediately after implementation.
› S&OP is not a static process: Ayana-Logis has devised a closed loop implementation approach that forces organisations to fine-tune their processes and tools on a periodic basis to keep in tune with the changing market conditions.
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Automotive
›› The Ayana-Logis point of view:
Since the turn of the twentieth century, the automotive sector has led all manufacturing revolutions. From the early days of mass production and component interchangeability, through the years of the “scientific method” of work study, the quality movement and time based improvements leading to the current pressures of lean manufacturing, the very best applications of improvement methodologies have been found in the automotive sector.
Today the principles of lean manufacturing are almost universally acknowledged in the automotive world. The elimination of waste in every area of production including customer relations, product design, supplier networks and factory management is the objective. The methods used by lean manufacturers – the identification of customer value, motivated people having a talent for continuous improvement and the elimination of anything that the customer is not willing to pay for – have gained continuing support and respect over recent years.
But today’s automotive manufacturers are leading a new revolution. The move towards mass customisation and fast order-to-delivery is threatening the key pre-conditions for lean flow control. Stability of factory demand and the steady flow of material with capacity levelled schedules can no longer be assumed. Schedules will have to respond very quickly to changing customer demand and un-forecasted customisation.
At Ayana-Logis we focus on the after-market improvement opportunity. A new study report from Aberdeen group (Strategic service management: Moving beyond the tactics, May 2007) reveals that best in class companies drive 75% higher revenue and 111% higher profitability from service operations than other companies.
In the automotive industry, as product margins dwindle under the intense pressures of global competition and increasing customer demands, the service delivered after the initial sale of a product is becoming increasingly strategic to revenue, profitability and customer loyalty.
›› The Ayana-Logis solution focus:
Aftermarket spare parts management and service management are two key areas of focus for Ayana-Logis. The Ayana-Logis service parts management solution is a comprehensive planning solution, designed to manage forecasting, inventory, procurement and deployment of spare-parts. This, in turn has a direct impact on costs, reduced inventories, increased throughput and ultimately increased profit margins!
Ayana-Logis aftermarket parts management solution for Automotive companies offers demand planning solutions from Logility to address the complex nature of the service parts demand. The rich library of forecasting techniques handles both the fast moving parts as well as the slow moving parts , all within the same forecast engine. An increase in forecast accuracy can result in bottom-line results by reducing the need for safety stocks as a hedge against demand varability. The next phase is the inventory management piece from Logility. This segments the inventory based on profiling and plans accordingly. Traditionally inventory levels for parts have been set using simple rule of thumb without considering demand variability and the multi-echelon layer of the service network. The Ayana-Logis solution focuses on improve this through superior processes and technology.
›› The Ayana-Logis approach:
Ayana-Logis approaches the service parts improvement in the Automotive industry by taking into account the process first. An 80 / 20 rule is established to classify the parts both in terms of consumption as well as dollar per part basis. The tools for demand forecasting and inventory management further establish best practices in the process. This is designed as closed loop process for continuous improvement.
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Other Industries: Chemicals, Industrial, Electronics and High-Tech
›› The Ayana-Logis point of view:
The manufacturing world is in the midst of globalization and its effects are being felt by suppliers, manufacturers, customers, and all supply chain participants. The “bull-whip” effect that used to be more predictable since the flow of goods was more or less defined, is completely out of shape now.
Industry majors are in various stages of transformation from a regional "buy/make/sell" model to a global "buy/move/make/move/sell anywhere" model. This shift is occurring in order to achieve greater scale and cost efficiencies while capitalizing on rapidly expanding markets such as China and India. While making this transition, companies must maintain or enhance supply chain flexibility and customer responsiveness.
As a result of globalization, more and more supply chains are starting to originate in low-cost countries, mainly in Asia and Eastern Europe, while largely continuing to terminate in North America and Western Europe. Economists predict a shift in termination points over the next five years. Traditional organizational structures and business practices are being challenged.
Similarly, in the Electronics and High-Tech space, In order to succeed in today’s high-technology industry, companies must compete to provide customers with world-class, innovative products and services at the lowest cost possible. Poor information management strategies across the extended supply chain—partner connectivity, information consolidation, asynchronous planning, and execution—all pose further risks to achieving business and financial metrics. Add to this increasing volatility in demand, rising customer expectations, and product proliferation coupled with short product life cycles, environmental regulations, cost control pressure, as well as the ever-widening supply chain’s geographical network.
Effective collaboration between suppliers and customers has never been more critical for success. It is no longer a matter of simply striving for improved relationships whose qualitative benefits would one day translate to quantitative results. In today’s world of complex supply chains and demanding customers, collaboration is a matter of urgent necessity and financial performance.
Figure highlights a high-level process view of the ideal supply chain scenario.
›› The Ayana-Logis solution focus:
The Ayana-Logis approach has always been focused around business benefits. This, of course stems from business pains and challenges. In the industrial, high-tech and chemicals space, the familiar business pains that keep on surfacing are:
› Lack of visibility into current business plans
› Lack of consensus from key stake-holders of demand
› Lack of synchronisation between demand and supply plans
› The production / manufacturing is not adaptive to changing demand profiles
› Supply Chains are not agile for short product life cycles, contract based manufacturing, dynamic Bill-of-material situation etc.
›› The Ayana-Logis approach:
Ayana-Logis focuses on the above listed challenges through a combination of people, process and technology. We believe that a big chunk of improvement can come from empowerment of people and creating accountability. We hold supply chain awareness workshops and baselining workshops to make the key stake-holders realise the gap between the As-is and the vision of the organisation. We then start mapping the to-be process to align it to vision. Process improvements are mainly driven by best practices that are driven through process mapping exercises and elimination of “phantom” organisations and steps. Ayana-Logis believes that The Logility Voyager suite of applications with almost four decades of best-practices ingrained in them are a great set of tools for effecting the change.
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Logistics
›› The Ayana-Logis Point of View
Logistics is one of the oldest industries in the world. Ever since the first desire to move produce or products from one location to another, logistics had become a concern. Society eventually realised that the art of moving goods safely is an art which is different from producing or making that goods. The concept of 3rd party logistics business had then begun, without a formal usage of the name.
Business begins as a trust relationship based on the abilities of a body of persons that move goods from one place to another. What ensures continued business, is then service delivery.
Some of the cornerstones of service delivery are basic freight operational information, made available in a consistent and sustainable way, ubiquitous yet private to the parties of the transaction. From the longest time, logistics operated on word-of-mouth, to couriers, to finally a more structured form of document exchange. In this day and age, where a customer can demand for practically any commodity or item, the transactional volumes for information exchange is simply short of tremendous.
›› The Ayana-Logis Solution Focus
At Ayana-Logis, we believe that technology is the key business enabler. Thriving logistics players have maintained this area of their infrastructure as a well-oiled engine. We understand that this is usually out of reach for most of the up-and-coming enterprising businesses. Focused on their core strengths, IT staffing and sourcing will not be one of their stronger abilities, coupled with the fast pace of business happenings and opportunities.
Ayana-Logis as a solution partner, understands the growth patterns of enterprising businesses, and is ready to support them. The Cyber-SCM suite’s Application Service Provider (ASP) model allows for a quick deployment and enablement into best-practise business processes and documentation. The modular approach of the suite enables businesses to start off quickly in their core strengths and enables them to add on functionality as they increase their own solution scope. The full end-to-end design of the logistics coverage means that your business is never too far away from cutting-edge visibility tools and trade connections into many key countries.
›› The Ayana-Logis Approach
› Start Small – Grow Large
Start where you are. Airfreight. Seafreight. Import or Export. Consolidation. Warehousing. Some or all. And more. Operate as a 3rd party Logistics Provider. Or as a Lead Logistics Provider. Cyber-SCM’s modular design enables you to begin practically anywhere.
And you can always give your client visibility and tracking into the freight movement. Even from the order management stage. A stronger data security model ensures confidentiality across each different business entity.
› Instant Infrastructure
Is your logistics business covering a service scope that you can no longer handle with disparate systems or manual processes? Or are you finding it harder and costlier to keep up with the level of visibility or data quality that clients today minimally expect? Because Cyber-SCM is built to cater end-to-end logistics, you get an instant infrastructure that handles your operations, gives your clients visibility that they want, maintaining data quality that you need. At a fraction of the price tag for maintaining your own Business IT arm.
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