Supply Chain Insights Can Identify Opportunities to Enhance Performance

How do you use supplier insights to improve performance in your supply chain? This is a transcript of the Supply Chain Insights webinar conducted by Lora Cecere, Founder of Supply Chain Insights, called The Journey of Becoming First, Using Supplier Insights to Improve Performance. The webinar recording is available here.

Lora Cecere, Founder of Supply Chain Insights:

Welcome to our webinar today, and my name is Lora Cecere and I’m the founder of Supply Chain Insights. And I’m excited today to bring you a supplier insights webinar about a new innovative and distinctive technology approach to really help manufacturers and procurement organizations in complex, make-to-order, assemble-to-order processes that drive lean processes. Today, I’m joined by Scott Spencer, he’s the Vice President Supply Chain at Safran-Zodiac Aerospace. He’s a seasoned executive with a proven track record. It’s driven a lot of improvement in operations and supply chain. I think you’ll enjoy his story. He’s worked in the aerospace sector for 10 years, and he is very proud of the roles that he’s had, not only at Zodiac, but Parker Aerospace, Hamilton Sundstrand, and Honeywell. Welcome to the program today.

Scott Spencer, VP Supply Chain at Safran-Zodiac Aerospace:

Thank you for having me, Lora.

Lora:

I can’t wait for you to share your story. And I also have Richard Lebovitz. Richard is the founder and CEO of LeanDNA. I actually, Richard, about a decade ago, I consider Richard a lean visionary. He’s currently built a new, cloud-based actionable program for lean that really helps with procurement and manufacturing synchronization. It’s powered by cloud-based analytics, and Richard has built into his new technology best practices for operational dashboards for lean, and we’ll be showing you some of those today. Prior to building the company LeanDNA, Richard was the CEO and founder of Factory Logic, which was sold to SAP in 1997, and he’s just a lean expert. So I could give you all the details of all the implementations, but it’s far longer than we have time today. Richard, welcome to the program.

Richard Lebovitz, Founder and CEO of LeanDNA:

Lora, it’s great to be here with you and Scott.

Lora:

Yeah, let’s get onto talking about what we’re gonna do today. So Scott, let’s start… just talk to the group a little bit about what you do, your supply chain operations, how do you manage at Zodiac to really delight customers? And what is the story of really driving customer service to be first.

Scott:

Absolutely, I’ll give you maybe just a little bit of a background about what Zodiac is about here. So I started with Zodiac about nine months ago and came in the Vice President of supply chain, and the division that I’m part of is called the cabin interior solutions division. And we really specialize in customized galleys and lavatories. We get into the storage bins. And really, this is where when you get on an aircraft and you walk in, you can see right when you walk in their craft us, you see the galley there, and a lot of these airlines like to have very customized galleys, everything from the counter tops to the different appliances that go into them. And then even when you get into the lavatories and the other decor within the aircraft, most of this highly customized, and again, when people started looking at them, they start saying, wow, how come they’re all different? Well, again, depending on the airline, they can be Delta or American or so forth. They will come in and they’ll pick out specifically what they want. So there’s a lot of demand on that customization that we’re putting together in our facilities and we currently have 11 business units across the division. So again, a pretty wide range of locations, and we’re in North America, South America, Europe, and Africa. So we’re trying to make sure we’re coordinating all the customer requirements across these various BUs here. We have roughly about 600 or so people in the supply chain, and we have about 200 planners, roughly 100 buyers and the rest about 400 or so are in the logistical area of moving the product in and out of the facilities. We currently have over 500 suppliers. And about 60 of those suppliers make up roughly about 80 of our spend. Just to give me an idea of the magnitude of what we’re dealing with on a daily basis. And to give an idea of maybe one of our products, we do roughly about 50 737s a month. We’re doing 50 to 60 832s a month. So from an automotive perspective, people say, well, those are pretty low volumes, but in the aerospace, those are extremely high volumes ’cause obviously these are going on to aircraft and that’s a lot of airplanes that are being built each month. And then when we look at how many parts go into a lavatory, we have roughly 1500 different parts that go into each lavatory. And so when we release what we call an M materials order, or some people refer to the work orders, we’re basically making sure all those parts are coming together. And so part of the challenge we had was we had some sites that were not really performing up to the level of getting to the customers on time. We had some that were in the upper 90s, and we had some that were down in the 80s and even in the 70s range. So part of what we had to do was come in and really work on getting the delivery performance up. And we also had to really address some inventory challenges that we had.

Lora:

Well, a lavatory is not a lavatory, right? It’s not like you can just run down the street and get one from your local store, very specialized this and the aircraft and a lot of moving customer priorities. As we think about your supply chain, Scott, and we think about this evolution of make-to-order and really driving customer performance, one of the things that we see is that the evolution of the software has a lot of change over the last five years in the future five years. Demand volatility, which is behind economic uncertainty. The size of the bubble here represents the risk and the challenge for supply chain leaders. And this is from a risk management study we did a couple of years ago, but we’re redoing this and it looks like the data is still directional. In fact, demand volatilities have actually even gotten larger, and as we deal with globalization versus nationalism, economic uncertainties have gotten larger but also supplier viability as we’ve elongated payables and operations that become more complex. We find that it’s harder for manufacturers to really be effective and working with suppliers around what’s required. So we’re at the intersection of increased demand volatility, supplier viability, and operational complexity, and if we compare that of five years ago versus the future five years, these bubbles are growing. So when you looked at this chart, does this speak to you? Is this representative of what you’re seeing.

Scott:

Yes, as a matter of fact, I think this really kinda highlight a lot of the challenges we are seeing in a couple of them that really jumped out at us. And when I got started here, one was we were looking at a lot of demand volatility. We were seeing a lot of customer orders moving in and out. We also were having some significant challenges on supplier visibility. Were we able to see where the shortages were coming from? Did we know exactly how the suppliers were performing? Did we understand when parts were coming in early or again, when we were having to chase them down? And again, on the operational complexity side, we were seeing that, hey, we’re a fairly complex organization. We have a lot of things that we’re doing internally, so we have a lot of our suppliers being internal, but we have about 60% of our supply basis on the outside. And so we really need to be able to address a lot of these situations that we were facing. Having multiple ERP systems, we had four different ones. We really needed to have a common interface that allowed us to be able to get a common metrics across the board for the BUs and make sure that we’re talking the same language and really understanding what’s happening with the demand. Were we seeing the same thing that was happening, for example, with an Airbus in one facility that we were seeing in another facility where we send the same challenges across suppliers. Did we have opportunities to be able to get some synergies across the facilities. And that’s where we were able to use a lot of the tools that LeanDNA brought together as it kinda helped us bring some of these things to light and really helped us see again, some of the demand trends and being able to see challenges coming up in the future, and see where we might be having some opportunities to really work with our suppliers and be able to optimize some of our inventory levels, some of our delivery performance and such, it really did kind of help address a lot of these key areas for us.

Lora:

Well, Scott, you said you had 4 ERP systems, the average company has seven, and the average company has two to three different planning systems. And of course, we need MRP and it’s kind of baseline, but it’s not enough for complex operations with multiple ERP systems and the needs connected together. Is that your perspective as well here.

Scott:

Yeah, exactly with the fact that we did have four different ERP systems. One of the things having dealt with a lot of ERP systems over the years is that you can’t always readily get the information to come straight out you within the canned reports that they might have lots of times you’re toggling between different screens in order to get some of the data. So we really needed something that could give us the ability to really see what are the targets that we are setting out there. What are the trends that are happening? And again, being able to pull everything together so we could see it in one common area. And the other thing was, when you have multiple ERP systems, lots of times, it’s hard to roll things up to a divisional standpoint. And so we really wanted to be able to understand what was happening within the division. And so again, the LeanDNA tool gave us the ability to start doing that and really understanding, hey, are we measuring shortages the same way? Are we looking at the demand the same way? And are we able to be able to communicate to our suppliers the same way. So the tool really helped us start doing that and being able to address some of those problems of getting some key KPIs that everyone was working together on.

Lora:

Well, in one of the KPIs, and I actually went to the slide early because it has so much data on it, is inventory. And I was talking to a CFO the other day that said, if he had all the money and invested in tools to improve inventory, he would like to have about 10% of that for his retirement. And we’ve been working on inventory a long time. So when I looked at the metrics that matter report series that I was doing, what I saw was, if we look at days of inventory, particularly in the aerospace and defense industry, we’ve actually grown inventory by 40 days. And in other segments, we aren’t making a lot of improvement. But why do you think with all the technologies that we’ve invested in on all the processes that we’ve invested in, that we’ve not actually decreased inventory? What’s going on there?

Scott:

Yeah, I think the biggest challenge in the aerospace industry, if you were to look back over the past decade plus as the chart here is showing, is we had a record number of launches occurring during this timeframe. So you had everything from the A 350 to the 787, you had the joint strike fighter referred to as JS on the defense side, you had all these programs, and it was a record number of these programs being launched by all these airlines coming out at the same time. And you had a lot of new technology that was coming into play. So again, the Dreamliner or in A350 were the first composite aircraft coming out. And so there were a lot of challenges in regards to being able to manage all these new technologies. There’s a lot of supply chain challenges. And so there was a lot of stops and starts along the way there. And so that led to a lot of inventories getting bloated up with some of these delays. And again, was the supply chain able to react quick enough? One would say, probably not, in a lot of these cases. And so we’ve had to get a little bit more sophisticated with the volumes growing in the aerospace industry and really start getting some different tools. And again, as we started looking at our journey, when I got on here, we had started with focusing in on a particular program, I’ll say, and we started seeing some really significant improvements on both on-time delivery, as well as inventory reductions. And so we had seen a year over a year for the Division of almost $80 million that we just had reported on working capital with the vast majority of it coming in on the inventory side. And it was a direct relation to getting some stronger processes, using some of the new tools that we had in place such as LeanDNA. And when we got into our fiscal year ‘18, we projected another 16% drop in the inventory. And right now we’re at about 7 to 8 of that target so far for the fiscal year, and we are projecting to get there. So again, a lot of things cause I’ll say some of the challenges, the aerospace industry faced, but as we realized that things were changing with demand and supply, we had to get smarter with the tools we’re using.

Lora:

Richard, let me bring you in here, as our lean expert. We’ve in doing lean for a long time, and one of the things that I see in your tool is the average company’s been able to improve inventory by 11%. Why did we need a new tool and what’s happening here from your perspective.

Richard:

Yes, thanks for bringing me in. So in terms of my background, as you mentioned, I’ve been working in Lean manufacturing and supply chain for about 25 years and the area that I really focus in on is the system side of lean. So I spend a lot of time in the factory, but the last 10-15 years, it’s been primarily in how do we build good systems. Unfortunately, the typical spreadsheets and macros don’t really work well in today’s world of rapid change and the complexity that Scott talked about in the supply chain. There’s been some great advancements in BI and analytics, but these reports and graphs are typically backward looking. They can tell you how well you performed, but they lack the insights on how to proactively improve and drive specific actions. BI and traditional reporting are good for showing what happened, but not good for decision support. So for example, we find that procurement teams can receive hundreds or sometimes thousands of messages a day, but what’s missing is identifying the top five to ten actions that a buyer analyst can take today that’s gonna actually have the biggest impact on inventory or improving performance. Where we’re headed with LeanDNA is really more of a future, purpose-built decision support analytics tool that’s really targeted to specific business problems like inventory optimization, which are highlighting some of the opportunities here in this chart.

Lora:

Well, thank you very much, Richard, because a lot of times people say, well, I’ve implemented lean, and what I find is that often people have implemented it in manufacturing or perhaps in front office, or perhaps in procurement, but we’re really not aligned horizontally, I think, outside-in with the customer first. Scott, when you got Richard’s tool, how did you decide what metrics to measure and how to get started?

Scott:

Yeah, we were facing several different challenges. Again, we were really looking to make sure that we have some really clearly defined processes in place. And so we started saying, hey, what are those again, key KPIs that we really needed to focus in on. And we were saying, one is we gotta make sure we’re in our customer delivery requirements, whether it was internal or external. Again, we have a lot of the internal movement of product and so need to make sure we’re treating those folks as customers as well. We also wanted to make sure we were measuring quality performance, and so we want to make sure that our suppliers and we’re delivering on time and we had quality being measured and we needed to understand cost. So again, a lot of the basic stuff in supply chain, but we didn’t necessarily have a good process at the time to pull it all together. Again, as we went to different ERP systems, different BUs, they all had their own way of pulling some of the information and sharing it. And again, it was kind of hard to standardize it. So again, we wanted to look for a common interface that could really pull all that stuff together. And so as we started using these tools, we were able to make sure that we were measuring supplier on-time delivery the same way we’re measuring quality the same way, we could see the suppliers across the various BUs, how they were performing, and one versus the other. So those became very, very important. And again, when you’re buying 70% of your product from the outside, that’s a huge thing to be able to manage there. And so we needed to make sure that we were maximizing our supply base in that we were having them focused on hitting those delivery and quality requirements. We also needed to be able to get some good reporting out in regards to, if we had shortages, what does the team need to go expedite and work on? Because let’s face it, the customers are always moving requirements and trying to meet their end customer needs, and so we needed to know where were those problem spots gonna be for us. And so again, we got a common focus now on it by being able to get into certain screen shops that we’ll share a little bit later saying, hey, here’s the parts we need to go get in order to hit these requirement dates. We got some very, I’ll say, proactive stuff too, and saying, these are things that could become shortages as we go forward in the future. So it became very important that we had some of those critical KPIs identified and we could see those trend charts and the other one was really on inventory. When I first got here, we just looked at inventory as a dollar bucket, and we really said, hey, we gotta start focusing in on this and looking at it as a days of supply. Some people look at at the inverse side is inventory turns, and so we were able to get a standard process across all the ERP systems that really looks at how we manage inventory to a DSI standpoint. And we found that some sites we’re performing at a reasonable level for aerospace, we were down in the 60th and 70s, which isn’t too bad. And we had some that were well over 200. So a lot of opportunity, and we didn’t necessarily have all that before, but as we got these KPIs and got the screenshot available for our control towers. We could start seeing which areas needed more help.

Lora:

Well, thank you getting those KPIs aligned is so critical. And one of the advantages of cloud is we can now have new forms of analytics that sit between our traditional technologies. I often call them the alphabet soup technologies. It’s like we’ve got three letter acronyms. We’ve got… sorry, everyone. Just a minute. Thank you very much. We had a little bit of background noise there. I’m sorry, I got dropped off, but what I was saying is that we’ve had the evolution of analytics that evolved this improvement. Richard, do you wanna talk about the work you’ve done here? We’ve got the slide up on the inventory opportunity.

Scott:

This is Scott, let me jump in here. This is really a key tool that we use at all the BUs as well as that the division level. What this kind of chart is showing here is you basically see that orange line, and I think you might wanna go back ahead a little bit there. The orange line representing where you currently are going with your supply, meeting your demand, and then if you look at the blue line there, it represents where the optimal inventory performance would be if you followed all the plan for every part. And if you look at the… there you go. And if you look at the ABC analysis, and if you were to execute to what the actions are telling you. So we use this quite frequently and it’s a very, very powerful tool. It’s powerful visually too, because you can see where you’re projecting your inventory to go. And so when we do it, we look in there and we’ll look at it by programs. We can look at it by buyers. We’ve been getting into a little bit more detail on some of the commodity, and we find that it gives the buyers an opportunity to really work their actions that has an impact on this line. So basically every day, they can go in there and see which actions they have fixed, and it prioritizes it from the top opportunities down to the smallest ones. And so we try to make sure we hit those top 10 every day. And as we work this, you see a nice natural trend line coming down here, and that’s what we’ve been seeing at our business units and why we’ve seen such a dramatic improvement in our overall inventory as we move forward there. So we continue to work on that every day, and we usually have this up at our executive monthly meetings as well, where we’ll have the CEO in there. And so that gives him an opportunity to see again, the performance from a divisional standpoint, and if we wanna highlight any of the BUs, we can quickly switch over to a site and share that. Again, it’s a real live tool and it provides actions, which I think are very important in today’s environment. And really, it’s been very, very helpful for us.

Lora:

Scott, this is a lot of the visualization of how do you really work with suppliers that you were talking about before that you don’t see with the traditional reporting around APS and ERP. How did you move your operations to better use this data? Did it require training? Did you have to implement new processes

Scott:

The best part was we actually just did the training with the folks. We were rolling out the tool. We went to each of the site and as a very user friendly tool, and we got into each of doing an overview for the whole group, and then we actually did one-on-one training. So as we started again in what we call a super user, they would go through and work with each of the buyers. We also use some of the LeanDNA team to help us in getting it up and running with some of the sites, and it really was pretty easy to do. Again, it’s pretty simplistic compare to sometimes an ERP system. The other thing that  really gave us a huge advantage, it doesn’t show it in these pictures, we’re able to put targets on here so we could put, hey, this is what our KPI is for the year, is to reach this level. And then we had stretch targets. So it allowed people to visually see very quickly how they were doing if they were tracking to get there or not. And the great thing was, again, there was actions in place to help the sites to get to the level of performance they needed. So as we rolled out these things, we did spend a lot of time doing some training, but then after a while, because of the simplicity of it, we were able to do more stuff. I’ll say from a webinar such as this, for additional training needs.

Lora:

Well, and here we have the standardization of the dashboards after you identified your key KPIs and tell the group a little bit about how you use this to drive improvement across your site.

Scott:

Yeah, again, we were talking about the need to have a common view from all the different ERP systems and making sure all the businesses were focused on the same critical elements. And so you can kinda see here are some different widgets, what we call, areas that we like to look at with each of the sites. And you can see everything from purchase inventory, POs to action in the next 90 days. And so when you were looking at these charts, again, you can see, is there a burn down happening, or is it growing, and then you can actually drill into each of these widgets and it’ll give you the details behind it. So you can kinda see, is it a particular program that was causing an increase? Are we focused on a particular area that’s showing improvements? And so this became our common talking point, and it gave us both indicators of today of how we’re doing, and also gave us some future indicators of what to expect as we were moving forward. So again, this became a standard part of our operating process within probably about a month or two for each BU. Once we had all the information loaded and the training. It became very easy for the sites to start working with it. And now it’s just become part of our routine and part of how we do business here.

Lora:

People that I’ve interviewed love this visualization, and the other thing that is really critical is that it not only allows the visualization within your operations, but also with suppliers.  The suppliers I’ve talked to really love the fact that the data is synchronized and actionable, and it’s visual versus the old green screens, or the detail, the ERPs, or the spreadsheets that a lot of people use. How do this kind of collaboration change your operations with suppliers?

Scott:

Yeah, this became really important for us, and so I always refer to this chart as our line of balance. A lot of people hear that terminology in the industry, and we use this to be able to really drill down and be able to work with our suppliers. So this is a view currently from what I would call a buyer’s desk, where they can see where they have the shortages, being those items in red and orange, where there’s a potential shortage if we don’t do a reaction to it. And so the supplier is able to log in and they’re able to see the same screen shot. They can only see obviously their information. And so it became more of a talking point between the buyer and the supplier. So lots of times you have those phone conversation and it’s hard to visualize. You’re quickly trying to write down notes or you’re sending emails back and forth. This provided a communication tool of the buyers and the suppliers, being able to see exactly what they were talking about. You could status right on the screen here of when parts would be expected, and then in turn our planners could see that information as well as was being shared. And so that really gave us some really strong powers of getting better communication going between the suppliers as well as the site. So we are able to quickly address things and it’s been very, very good for us. And we continue to use this tool on a daily basis. And it’s nice ’cause it also will roll up to a management level, so we can also do it at the division level to show again, where do we have current shortages by what programs and such? So it’s been really good from a reporting out mechanism as well.

Lora:

If you think about the title of the webinar of “being first,” how did this help you to improve customer service?

Scott:

We’ve seen a tremendous improvement in our customer on time delivery. So one of the things that we had seen before is, again, we have some sites that were performing very well and the mid to upper 90s, and we had some that were down in the 70s and the 80s, and we’ve pulled all those, have shown significant improvements. We got some now that are down in the low nineties, still got some room for improvement, but it’s helped us identify some processes that we really needed to fix on our end as well as throughout the supply chain. So we’ve really been digging into some roles and responsibilities with key people. We found that we had certain customer requirements that we needed to have a better understanding of and how we were loading it into the system. So it’s actually helped us clean up our ERP system as well. And based on that, the feedback from the customers has been very good because we’re able to, one, we’re meeting their needs more now than ever. And then also when they have questions, we’re able to provide them where our challenges are and we’re able to give actions to what we’re doing.

Lora:

It’s a great story, it’s one for you to be proud of, because I think as operations have gotten more complex, we’ve got a lot of tools and a number of people might say, well, how did these tools differ from what they’ve got today? And Scott, I know you have the ERPs got MRP and lots of people on the phone also have advanced planning and they wonder, why can we not just use the demand planning tools that we have to translate demands of procurements and people don’t understand that we’ve gotta convert it MRP. We’ve gotta do constrained plan. We’ve got to actually work on assembly and the whole process of demand and tactical supplied inventory management to Finite Scheduling, NDS, there’s a gap between the traditional sourcing technologies and the planning technologies of how to align, and it isn’t just integration and synchronization, it’s this harmonization of the needs and the requirements to be able to connect these two important pillars of technology together. And there was a gap in people being able to drive lean processes. When I did interviews with people, they would say, I could do it in manufacturing, or perhaps a few of my operations, but I struggle to really bring the sourcing with the manufacturing together for really complex assembly. So, Scott, I know you have MRP, you’ve got ERP, but any thoughts here about how Lean DNA helped you to bring sourcing and manufacturing together.

Scott:

Yeah, it really has helped bridge the gap in a lot of ways, and it’s become the analytics of being able to simplify what’s happening in those ERP systems and the MRP systems, and kind of putting it in an easy to read format and stuff like that. I think Richard will probably chime in here and kind of jump into some of the technical points behind it. But again, we were looking at it as We need some that really simplified it. So again, we have a lot of business leaders that are looking at it, they’re outside of the supply chain, but it helps them understand what’s happening with some of their programs and within their own businesses now.

Lora:

Well, let see if Richard’s back. Richard, how did you realize that you had this gap and opportunity in the industry? Cloud-based analytics allowed you to bring this all to life, but you had to realize there was a business challenge here between procurement and manufacturing. Can you tell the group a little bit about how you evolved the technology.

Richard:

Sure. So what happened is I was working with many leading manufacturing companies like Zodiac across about 10 different countries, very specifically working on how to reduce inventory and improve performance. So we weren’t looking at the technology, but what are the results that we wanna achieve? And what we found is it almost everyone was trying to create their own custom analytics solution and dashboards to solve the exact same supply chain problems. So we took a step back and said, why don’t we build one out-of-the-box software that has all this deep domain expertise built in and specifically targets inventory reduction and shortages. We can host it in a cloud and deploy it on demand in a few days and really start to drive some of these best practices. The reality is, when you look at this graph, every company we work with has some ERP or MRP systems, but yet those technologies typically don’t provide a real end-to-end inventory analytic solution that really helps to make decisions. So as a result, every leader and Supply Chain who wants to be effective in their role has been wrestling with IT and finance to get budgets to develop an internal solution, often using Excel or a BI tool kit. And I know Scott’s probably see this, Lora, you see it as well, but those efforts are very costly to create these own internal solutions. They can take months, and sometimes even after years, it’s hard to get it right. And even when it’s finally working, most of those solutions are just giving you a backward looking view of how did we do in the past. It’s not giving you a forward-looking predictive view of not only what we could do in the future, but how to get there. And the reality is, supply chain leaders don’t want to build their own technology, but they often felt they had no choice. And the net result is from what we’ve seen is that there’s professionals like Scott and many others that are really out there looking for good tools to optimize inventory while improving factory performance. I saw that frustration over and over again with many of the companies that we were working with and looking at how do we close that gap and given my lean background and really decades in supply chain systems, I felt that was an unique position to develop this kind of purpose-built solution that really can be up and running in a couple of weeks versus the months or years of a lot of those solutions that are already out there or existing.

Scott:

I think that became one of the big challenges for us, and I’m sure a lot of other supply chain people would relate with it, is we had a lot of offline systems that we were running a lot of Excel spreadsheets and stuff like that. And we were trying to get people to use even the ERP systems more. But again, because they couldn’t get the reports or the forward looking things that they needed, they were trying to create their own Excel spreadsheets. And so we found this to be a very, very good solution to, again, get everyone on one page. And it’s been really great because now when we talk about what is our forecast and stuff like that, we’re going to the same tool and we’ve got away from having to have Excel as our savior. It’s still a great tool. You can download some stuff to it. But again, when we go back to the main drivers of what we’re looking at from a KPS, the tool allows us to interface those ERPS and actually make improvements in those systems as well.

Lora:

Let’s do some questions here. So Debbie wants to know how did you convince your management team to invest in this when you already had technologies? How did you convince them they needed to do this.

Scott:

Great question. I think one of the things that I was new coming in myself was they said, hey, we gotta fix our ERP systems. And we had this big issue across the board on multiple ERP systems, and to become an expert in each one overnight was not going to happen. And so when we looked at it, we were saying, we got some real process challenges here. And so very quickly, we had put the case together saying, we need something that can really interface with these ERP system and give us a common view, and again, be able to set some common metrics. And so I thank god, I had a very good boss here, still here, and he was able to understand some of the challenges we are facing there and liked the concept of being able to move forward. And so the next thing is getting your, obviously your IT or Information Systems Department on board, and the fact that it wasn’t going into necessarily proprietary areas and stuff like that. And we had a good secure method. We were able to be able to extract the needed information to help drive it. So when people could see the benefits of what we could do very quickly, it became a pretty easy sell on that standpoint.

Lora:

Did they realize the business pain or did you have to educate them? How hard was it.

Scott:

I think sometimes people are very frustrated with the issues going on here in complaints from customers, and you’re having issues out on a floor with shortages, and you have bloated inventories and stuff. So people realize there’s problems around there, and depending on how bad it is, sometimes they think it’s just a supply chain related issue. And so when we started pointing out where some of these processes needed to be improved, they weren’t all necessarily supply chain related, where supply chain can always think it’s the glue that holds the business together, but it actually helped us fix other areas. And so I don’t think they realize where some of the pain was coming from, but they knew we needed to do something. And I think having a solution go forward really helped. And so when you’re in a hard spot, lots of times, you’re willing to take that chance and again for us, I mean from an investment standpoint, it was well worth. It wasn’t something that was gonna break the bank, but it did provide us a very useful tool to get up and go on very quickly.

Lora:

So Richard, I’m hoping you’re still there, Mike wants to know how well you integrate with ERP. Have you integrated with Oracle and SAP and how long does it take? Can you give some kind of guidance.

Richard:

Sure. Yeah. We integrate with Oracle, SAP, and most of the major ERP systems. We already have integration with most. What I would say is that connecting to these systems is not really the challenge, what we’ve found over the years that it’s… how do you take that data, get the right data, transform that data into useful information. So part of what we spent many years doing is not just connecting, but building a workflow to extract the right data that then translates well into a lot of the analytics that Scott was just showing. So we can typically get up and running with these systems within about a week and it kind of amazes people. Why can you do it so quickly? But it really is because we’ve invested really years in developing those extraction workflows to get the right PO commit date, to get the right pricing data for a particular part. And sometimes with systems like SAP, things like pricing or lead time, it can be in two or three different locations and really understanding that domain background and that model the tools and then transform it into useful information is where we focus. And that’s helped us be led to not only connect with these systems, but to get up and running very quickly.

Lora:

Thank you, Richard, it’s time to wrap up and we appreciate everyone giving us questions, any other questions that come in, we will follow up and we will be sharing this webcast with people as a follow up. So you can share. If we think about wrapping up. I don’t know, Scott, if you have any words of wisdom of what you would tell other people about this program and about the work here.

Scott:

Yeah, I think my words of wisdom are, if you’re facing some of those challenges within supply chain, where you know you really are struggling with understanding what’s happening with the processes, you’re not able to clearly get some good KPIs identified, or if you can’t be able to project very easily within your ERP systems and stuff like that, that you really wanna make sure you have the right tools in place to be able to help do that ’cause at the end of the day, you gotta have the right people and positions. You gotta have those processes being very robust, but you gotta have a way of measuring it and being able to see where you’re gonna get to in the future. So I think it’s very, very important. You sometimes gotta take a step back and look at the bigger picture and see where are the teams coming from, and Do you really have good ways to measure it? And do you really have solid processes in place.

Lora:

Richard any words of wisdom for the listening audience from your perspective.

Richard:

One thing I would say is that even over 10 years ago, I think we could have managed some of the supply chain topics and complexities that Scott’s talked about with well-written macros in Excel or some homegrown tools. I think it was possible. But with the increasing complexity of products, more global supply chains, multiple different data sources, it’s really no longer the case today. And if we can’t identify and react to issues within hours, sometimes we lose the opportunity to actually make an impact. So it’s important for companies to really move forward and just try something different, continue to work the way we working, expect something different often doesn’t drive the success that we need. So a big part of achieving the success that I think Scott’s talked about today is because we’ve created technology that is rather powerful on the back end, but easy for people to understand and use on the front end, and we’re excited about the possibilities and what we’re able to do with AI and lean supply chain strategies and bring that into one system that can actually have a measurable impact with some of the leading manufacturing coming in the world like Zodiac.

Lora:

Well Richard, it’s great to see you breaking new ground. And I would just say from the interviews with the people I’ve talked to that are your clients is start with the goal in mind. I love some of the work that’s happening with collaborative sourcing. Some of the interviews that I had with some clients, people have started a horizontal process where they could talk across the operations and share insights about suppliers that they wouldn’t have had before and that kind of complexity. And the ability to work across operations, I think is a great opportunity from the tool. Let’s wrap up now. If we think about the evolution, one of the things I want you to get from this webinar, you gotta have MRP, but it’s not sufficient and it’s not sufficient because you can’t get the visualization of actionable data quickly to be able to collaborate and your significant value for sourcing through better insights, not only for driving customer service, which is really the story here of Zodiac of customer first and improving the value. You might say, well, some of the things talks about whether it’s cabinets or toilets or coffee makers aren’t maybe not as important as engines or rotors, but you can’t ship an airplane unless you’ve got a certified cabinet and lavatory and it’s important, and we have implemented Lean and functions, like manufacturing or sourcing or transportation, but we really not aligned across source, make and deliver. And I think LeanDNA helps us do that. So thank you, Richard, and thank you, Scott, for a great webinar. And again, we will be recording this and putting them on to Youtube and please feel free to share. Thanks very much.

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