China is apparently strengthening their intellectual property rights protection. What does this mean for the price of hair-loss treatment? Glad you asked...

We were recently interviewed for a blog posting by Lextech Global Service.  Lextech helps companies use technology to generate revenue and were interested in learning how we at Cadent Resources, Inc. applied technology to expand our service offering with our DemandCaster Outsourced Demand Management Software with a Service (SwaS).

We are please to announce that we will be presenting "LEAN DEMAND MANAGEMENT: Demand & Supply in an Imperfect World" at the Tooling and Manufacturing Association on September 9, 2008 from 8:00 am to 10:00 am. 

The presentation will discuss how achieving the ideal demand and supply pull system where there is a clean flow of data and information from the point of sale all the way to the supply of raw material is nearly impossible. We will provide methods that can be used to improve the synchronization of supply and demand and will establish the financial benefits that can be realized when doing so.  You can download the flier here.

The Tooling & Manufacturing Association is located at 1177 S. Dee Road in Park Ridge Illinois.  The cost is only $10 to members and $20 to non-members.

AC/DC has jumped on the Wal-Mart bandwagon in a big way, offering their next album exclusively through the superstore.

Recently the TSA instituted a trial process of allowing people to self-select the security line using as a way to speed up the security process.  The test has resulted in a moderate improvement in throughput and is a great application of the power of visual management, a concept core to lean manufacturing.  Though not the same scenario, it did remind me of the time when I was a member of my churches Board of Trustees and decided to apply some lean manufacturing techniques to speed up communion. 

The old method of taking communion was chaotic with parishioners filing into the center aisle regardless of their location in the church. It was simply the fastest to the aisle would dictate the order of communion. Often people in the back would thrust forward cutting off people in the front aisles. This in turn caused a traffic jam of parishioners yielding long communion times and frustration.  

Realizing the problem we instituted a process that controlled the flow of parishioners to the aisle in the spirit of one piece flow.  We simply placed ushers in the aisle with the direction that they only allow the front row pew to proceed into the aisle for communion first. Just as the first row of pews would finish entering the aisle the second row of pews would be allowed to enter and so on. In doing so we were able to control the rate into the aisle based on the tact of the priest providing communion. This in turn eliminated the traffic jam and cut the communion time in half with significantly fewer complaints and chaos.   Over time as the parishioners became accustomed to the new process, we required fewer ushers to control the flow.

Rising commodity prices and record breaking oil costs are creating more of an inflationary climate than has been seen for many years. In this posting, Herb Shields, CMC of HCS Consulting recommends that companies need to focus on their Purchasing functions and make sure that there are procedures and policies in place to deal with price increases from their suppliers. 

Herb is one of our partners and is a top supply chain expert.  Please free to contact him directly at 847-498-9510 or you can learn more by visiting his web-site at www.hshieldsconsulting.com. 

DemandCaster is what we here at Cadent Resources, Inc. call a Software with a Service (SwaS).  This is a new term we have coined to differentiate DemandCaster from the traditional hosted software solution known as Software as a Service or (SaaS). 

SaaS solutions are typically hosted subscription based solutions that are available to users to use as if it was software loaded on their servers or desktop as described in our Why on Demand musing. The distinction with DemandCaster is that it benefits from all that traditional SaaS applications provide but acts as an enabler to allow the deployment of an actual service offering that is provided by a dedicated expert. This differs from another software category called Software plus Services which is a wholly software-centric solution.  Software plus Services combine hosted services with capabilities that are best achieved with locally running software.

SwaS does not apply to a business that uses software to simply supplement their core business such as banks, brokers, on-line retailers, and credit card companies.  A SwaS provider works in the business to business realm and uses the hosted software as an enabler to facilitate communication, analysis, and delivery to address a specific concern of a client company.  In the case of DemandCaster it is used to help a client company optimize their inventory and capacity to increase their return on working capital. 

For over 10 years, I have been applying a simple 7 step process at my manufacturing and distribution clients to help them gain control over their order management and execution activities. The process is called the 7-F’s of Demand and it is based on a few simple ideas.

The next time you are in your facility stop and take a look around and watch all the movement.  As you do this look for processes that appear to require a lot of travel and then measure the distance and the number of times throughout the day the travel is repeated. 

As a rule of thumb, each meter of movement is equal to 1.5 seconds of time.  So multiply the distance by the number of times the travel is repeated and then multiply the result by 1.5 seconds to establish the total travel time required in a day.  Extend the result by the number of working days to get your total travel time for that process.  The result may be staggering.  Now ask yourself, what if we can cut that travel in half, how much time will we save?

Here are some metrics to consider:

• 5 min/day of extra movement is equal to 2.5 days of lost time per year.
• 30 min/day of extra movement is equal to 3 weeks of lost time per year.
• 1 hour/day of extra movement is equal to 1.5 months of lost time per year!

As you can see it does not take a lot of lost time in day to amount to a significant loss in productivity throughout a year!  How much extra revenue can you fill in that 1.5 months you are wasting?

When performing demand planning, the subject of lead times always come up.  On April 11, 2008 I attended the APICS and CSCPM sponsored Passport to Supply Chain Effectiveness Forum. The key note was presented by Mr. John Lanigan, Executive Vice President and Chief Marketing Officer of Burlington Northern Santa Fe (BNSF).  His presentation opened my eyes to the current and future challenges of our transportation infrastructure and the impact it will have on our supply chains.

As a follow-up to our post concerning the actions Boeing took to gain control of the enormous delays it has incurred in its supply chain, Crain’s reported that The Boeing Co. delayed its 787 jetliner program again, pushing back its expected debut in commercial service to the third quarter of 2009.

I read a short but telling article in Crain's regarding Boeing and their purchase of one of their key suppliers.

We love to share our client testimonials.  Here is one recently sent to us from Larry Waltz, President of Waltz Brothers.

I love data and the stories it can tell. 

There are two types of forecasting that are performed in business: Demand forecasting and sales forecasting. At times people use these terms synonymously, but they are in fact quite different. In this posting we will discuss the differences and when one should be used over another.

We recently added to our site an article we wrote called the Principle of One.  It was first distributed last year as part of our newsletter with wonderful feedback by our readers.  I have also included the companion 1% Rule spreadsheet we prepared that can be downloaded for those interested in evaluating the financial benefits of making small 1% changes to your organization.

An article posted on March 26, 2008 in SDCExec.com argues that even though the continuing weak performance of the U.S. economy is straining economic expectations around the world, the weak dollar has a positive side as the United States becomes an attractive procurement prospect for European companies.  This is in line with a few of my recent posts on the positive side of our struggling economy.

Comparing e-commerce to the seedy world of online board gaming

How often have we seen management initiate change with great enthusiasm and expectation and then passively manage the process to a failed outcome? A leader’s capability to manage change is often the determining factor behind a successful processes implementation. Without good change management, our business speed initiatives are doomed to fail.

Some thoughts on a few time-tested ways to capture un-fulfilled parts of your demand curve.

It's not all bad news in manufacturing.  I recently touched base with one of my prior manufacturing clients and got some great news.

A recent article by Rene Jones in Supply and Demand Chain Executive provided some key warehouse KPI's that I found interesting. 

A recent article in Supply Chain Digest made an excellent point about the lean manufacturing process:
It pointed out that Toyota, the long-term flagship and ‘inventor’ of the lean process, was not working in a totally lean environment because they carried an implied inventory that resides outside their company.

A focus on the lowest price as a reason to off-shore manufacturing is a riskly proposition especially if you may undermine quality.

The most basic reason for outsourcing to China, cost savings, is being challenged by the reality of today's global economy.  A recent article in Industry Week raises some interesting questions.

On Monday, March 10 the Commerce Department reported that sales at U.S. wholesalers rose at the fastest pace in nearly four years in January, helping them to work down their inventories. 

A recent article in E-Commerce Times outlines the order fulfillment hurdles specific to the e-commerce industry and poses some interesting solutions, incorporating robotic search dogs and futuristic optimization algorithms.

I was recently perusing the web and looked into one of the most widely recognized software as a service applications Salesforce.com. 

It's never a bad time to wax poetic about your favorite things. Especially when you can find them in the baking aisle of your local grocery.

Being that I am a mechanical engineer, a friend of mine sent me a few jokes about engineers. This one stuck out:

To the optimist, the glass is half full.

To the pessimist, the glass is half empty.

To the engineer, the glass is twice as big as it needs to be.

(This is especially true of a warehouse with poor turns!)

There are 2 primary drivers to determining how much inventory you carry:

1. Volatility of Demand
2. Volatility of Supply

In this posting, we will review the volatility of demand.

I was recently perusing a folder of clipped magazine articles I have collected and an article in the February 25, 2007 issue of Business Week caught my attention.  The article was a a special report written by Michael Arndt called "McDonald's 24/7." The article discussed how the move to a 24/7 operating format at McDonald's has increased the overall performance of the company.

As announced on our home page, we have finalized the integration of the Forecast Pro DLL into DemandCaster.  What this means to our clients is now the forecast portion of the service utilizes proven forecasting algorithms perfected by over 20 years of practice by the folks at Business Forecast Systems in my home town of Belmont, Massachusetts.  The DLL includes the following forecasting models using their patented automatic expert selection:

Simple Moving Averages
Discrete Data Models
Croston’s Intermittent Demand Model
9 Exponential Smoothing Models
Univariate Box-Jenkins Model
Event Models
4 Curve Fitting Models
Dynamic Multiple Regression

We are excited about the prospects this new partnership and it's ability to elevate the performance of our service.

Reading through a web of articles on RFID improvements the other day, I noticed a conspicuous gap in most of the stories being told: improving the quality of your data may not have much worth without first improving the quality of your analyses.

I am one of those unfortunate souls who wanted a Wii for Christmas but was too slow to make it known to my family to make a purchase while they were still in stock.  Now that it is creeping toward the end of February, to my amazement you still can't find one on line (at the list price) or in the stores.

There has obviously been a lot of negative news in the economy of late. People are hunkering down with all the bad news and have pulled back on their spending. The price of gas and the cost of everyday items such as milk and other essentials have hit the average consumer in the pocket crimping their disposable income.

About a year ago there was a Visa Check Card commercial that does a nice job in exhibiting a few key principles necessary for a fast and responsive business. The video was called lunch.  Unfortuneately, the commercial is no longer available but the newer versions represent the same basic idea and can be viewed here.

We are pleased to introduce our new blog that will cover all things demand and supply.  From inventory optimization to economic trends we are committed to helping our audience make better decisions and implement robust processes to enable them to Deliver at the Speed of Demand!

Enjoy!