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Kinaxis™ RapidResponse™ represents a new paradigm in supply chain management critical in this new era. Unlike disparate legacy supply chain planning systems built around black-box optimization technologies and used by a small number of highly trained experts, RapidResponse is a single on-demand service used by tens or hundreds of users to solve multiple supply chain challenges."
Source : Kinaxis
Leveraging Response Management in a Super-charged Environment
Response Management is also known as :
Response Management,
Operations Performance Management,
Response Management Solutions,
Rapid Response Management,
Managing Change Effectively,
Response Management Consulting,
Effective Management,
Emergency Response Management Consulting,
Rapid Response Management Solution,
Response Management Supply Chain Innovation,
Supply Chain Management Resources,
Rapid Response Management RRM,
Rapidresponse Global Standard,
Kinaxis Rapidresponse,
Rapid Response Reporting,
Response Management Business Surveys,
Emergency Response Management System,
Managing Change Response Management,
Change Management Managing Change,
SCM Response Management.
Research In Motion: Enabling a Responsive,
Demand-Driven Supply Chain
Research In Motion (RIM) Limited, maker of the BlackBerry®, is a Canadian company
experiencing massive growth in volume output, stafing, and manufacturing infrastructure.
The combined pressures of a rapidly expanding customer base and shortened product
lifecycles have led the company to add more contract manufacturers to the supply chain,
which means that more complex decisions need to be made in less time. Existing software
was not up to the challenge, so the implementation of a new decision support tool was
essential to keep RIM positioned as a market leader.
Company Proile
Founded in 1984, RIM provides wireless solutions for the worldwide mobile communications
market. The company offers seamless access to time-sensitive information through phone,
email, text messaging, instant messaging, and Internet and intranet-based applications.
RIM's technology supports multiple network standards and enables third-party developers
to enhance their products and services with wireless connectivity to data. The company's
primary revenue stream is generated by the BlackBerry solution, which includes wireless
devices, software development tools, radio-modems, and software/hardware licensing
agreements.
Headquartered in Waterloo, Ontario, RIM has ofices in North America, Europe, and
the Asia-Paciic region, with more than 6,250 employees in 18 different countries. It is
the world's largest wireless design group and one of the top 15 research and development
investors in Canada, with 2007 total revenue over three billion dollars. The company's
end-user base has expanded by about 18 percent every quarter for the last three years,
and overall production has more than doubled in the last year.
Dany Toniutti, outsourcing program manager for RIM, described the company's strategy
for overcoming the challenges inherent in this super-charged environment during a recent
IndustryWeek Operational Excellence Web Conference sponsored by Kinaxis.
Innovation Leads to Explosive Growth and Complexity
The remarkable success RIM has experienced in recent years has created a unique set
of challenges. "We've introduced seven new models in the last 18 months," Toniutti says.
"The average lifecycle of these products has gone from just over two years to less than
a year, and in some cases, less than six months." The company's product portfolio has also
become increasingly complex, from 18 possible end conigurations in a few basic models
to more than 100 possible combinations in seven different product lines.
RIM's Waterloo facility began operations in 1997 and moved to its current location in
2002. All handheld units are built at this site, which also houses point-of-sale box assembly,
customer order fulillment, and a 24/7 repair services operation. In 2005, RIM added two
outsourcing partners'Elcoteq, which builds some of the handhelds at three additional
locations, and Celestica, which provides two more sites for point-of-sale assembly
and fulillment.
Handheld manufacturing has soared 310 percent in just two years and continues to grow.
"We shipped over three million units in the last quarter, and we're aggressively adding
capacity to make our projected numbers," Toniutti says.
While RIM's customer base is still focused in North America and Europe, it is expanding
rapidly. In 2003 the company had 20 networks in fewer than 10 countries; by 2007 there
were over 300 networks in more than 100 countries. "We're on every continent except
Antarctica, and there are many, many more customers that we need to service," Toniutti
notes. More carriers mean more sources of demand variability. "But the Pareto rule still
applies: 20 percent of our customers drive 80 percent of our business," he says.
Keeping up with such growth has been dificult. "We've had to deal with a burgeoning
workforce and a shifting organization structure that's expanded by over 30 percent in each
of the last two years," Toniutti says. "Our supply chain has increased from a single fully
integrated manufacturing site to six sites utilizing two contract manufacturers in six different
countries." Aggressive ramp rates, often executed from multiple manufacturing locations
simultaneously, are further complicated by more than 200 engineering changes each month.
Earlier launches were often aimed at just one carrier and were fairly limited in scope.
For example, the company launched ive new Blackberry models in 2004, one of which
comprised 85 percent of approximately 200 end items. In contrast, the 2007 Pearl model
had over 660 end items by itself. "And all of these units are far more complex to make
and much more fully featured than those of 2004," Toniutti points out.
The Need for a New Solution
Supplying more carriers with an increasing number of units for multiple sites has meant
less time for RIM to respond to changes in demand. The company was also inding it harder
to stay on top of the cumulative effect of its order commitments. Staff needed faster, more
accurate answers to questions such as what would happen if one carrier's order was
pushed out before another's, disruptions occurred in the supply chain, or how to best
handle order increases of 50 percent or more for multiple carriers in different geographies.
"When RIM was a single site manufacturer, demand changes still caused havoc to the schedule,
but at least they got acted on right away because all you had to do was walk down the hall,"
Toniutti says. "Now forecast changes ripple out across multiple entities and different time zones."
As a result, decision-making became much more dificult. "Because of the increased complexity,
it isn't always obvious to any single individual what the implications of those decisions will be
across the supply chain," Toniutti points out. "It really can't happen in real time due to the
intricacy of our supply chain and all the orders that are in progress at any given moment."
The spreadsheet-based methods RIM had been using weren't effective in this environment.
Too much time was being spent ireighting, which reduced resources for other projects.
Shorter cycle times also increased the need for better decision-making tools. "Launches
now take less time to ramp to full production, and more units are being produced
during the ramp-up period," Toniutti says. "We're often launching in more than one site
simultaneously." And as product lifecycles shrink, RIM constantly introduces new products
that can potentially cannibalize existing product sales. "We have to properly plan these
introductions, since many of our higher-cost components are product-speciic and could
easily become excess inventory."
Moreover, a 225 percent increase in supply chain staff in the past two years made it crucial
for RIM to ind a solution that was easy to learn and use. "That kind of growth brings a level
of instability in terms of people having to learn the processes and tools we have," Toniutti
says. "It also increases reluctance to use new tools, even if they're vastly better than
the current methods, because there's so little time to internalize new features."
Response Management'The Key to Managing Change Effectively
RIM turned to Response Management and Kinaxis RapidResponse as the solution to
these issues. So far, the system has been implemented for in-house manufacturing, with
daily feeds of information going from SAP into RapidResponse. "We've established an
internal support organization and connectivity with one of our outsourcing partners, and
our second one is imminent," Toniutti says. These connections will provide a more
comprehensive view of the supply side of RIM's supply chain.
Multiple Advantages
RIM has already gained a wide range of valuable capabilities from implementing
RapidResponse, and expects to realize more beneits in the months ahead. For example,
a full view of the extended supply chain provides not just the data, but also the analytics that
go with it. "In RIM's case, this breadth of data is not available in any other formal system,"
Toniutti says. "We anticipate that our commodity managers, master schedulers, outsourcing
supply specialists, and inance personnel will all be able to use this information to
understand what's happening across the supply chain and make better decisions'and
also to ensure that what we think should be happening is actually happening."
The decision-making process has also been accelerated. "All the standard features of
RapidResponse will help us keep pace with our explosive growth," Toniutti says. "We
need to be able to investigate different ways to resolve issues very quickly and see what
the impacts will be on materials, costs, and customer satisfaction." In addition, ease of
simulation encourages people to try out more possibilities, since it doesn't take as long
to assess various response scenarios as it did before RapidResponse.
Scorecarding capabilities provide a multidimensional assessment of any given solution,
ensuring that staff can make objective decisions as opposed to subjective or gut-feel
reactions. "The ability to easily share scenarios and work collaboratively should reduce
the amount of spreadsheets that we send across our email links, which has been
extremely high," Toniutti says.
The Excel-like interface of RapidResponse makes training easier, improving retention
and reducing resistance to using the new tools. User-friendly online procedures help RIM
personnel remember how processes should be done while providing a mechanism to
share best practices.
Fast Results
"RIM has only been using RapidResponse in any signiicant way for the past ive months*,
but in that period of time we've seen some pleasant surprises, especially with regards to
reporting," Toniutti says. Getting reports out quickly has been a huge beneit for all parties,
especially the corporate IT group. Now that some reports are done in RapidResponse,
IT resources have been liberated for other development efforts. "We're inding that
the corporate IT folks have taken to referring people to RapidResponse whenever
their requests can be handled by the system," Toniutti says.
Some of these reports offer unique insight into the applications RapidResponse can
facilitate. For example, one report allows RIM to look for purchased parts that it certain
criteria. "We feed that back to our continuation management folks so they can determine
what should go on a planning bill as a separate item, and what doesn't need to be there,"
Toniutti explains. "Before RapidResponse this was very time-consuming, but now we've
reduced that down to an hour or two."
Another report deals with situations where a PO change is entered into the system after
commitment to a customer order. "The PO change will affect delivery, but unfortunately
maybe the buyer doesn't inform the master scheduler," Toniutti says. "This is something
that happens all too often in our environment. It's not exactly what you'd think of when
you think of Response Management, but that's one of the uses we've been able to make
of this tool in a short time."
Future Plans
RIM looks forward to using RapidResponse for demand and supply planning. "Right now
this is a monthly cycle of consolidating demand and then building a supply plan to meet that
forecast demand," Toniutti says. "We anticipate that the ability to rapidly simulate supply
options will help us select the best possible plan."
The company also plans to use some of the more specialized RapidResponse options.
"We believe these tools will help us reduce our costs and be more effective at dealing with
the change we see on a constant basis," Toniutti says. The constraints manager module is
one example. "This will allow us to view our supply chain in a capacity-constrained manner,
which will make our selection of alternatives more feasible," Toniutti says.
Finally, connectivity with customer data will provide a more interactive understanding
of customer demand. "This will help us better collaborate with our customers and give us
a much better picture of demand than we can expect to see now," he says.
Overall, RIM is pleased with the results it is achieving. "The key is to have visibility in
demand, and having the right data and the right tools to quickly and effectively respond,"
Toniutti says. "That's what RapidResponse is giving us."
About Kinaxis
Kinaxis delivers an on-demand Response Management service that enables customerfocused
companies to achieve breakthroughs in operations performance and customer
satisfaction by rapidly and more proitably responding to constant changes in demand,
supply, and product. Kinaxis RapidResponse combines personal alerting, multi-enterprise
visibility, collaborative "what-if" analysis, and rapid decision support to empower front-line
supply chain staff with tools for risk tradeoff and response to daily changes inside the sales
and operations planning horizon. Global leaders such as RIM use Kinaxis RapidResponse
to establish superior responsiveness within their fulillment networks and supply chains
and gain competitive advantage. For more information, visit the Kinaxis web site at
www.kinaxis.com or the company's blog at blog.kinaxis.com.
To view the on-demand webcast on which this paper is based, click here.
Kinaxis Inc.
700 Silver Seven Road
Ottawa, Ontario, Canada K2V 1C3
1-877-KINAXIS
www.kinaxis.com
- Research In Motion: Enabling a Responsive, Demand-Driven Supply Chain
- Company Proile
- Innovation Leads to Explosive Growth and Complexity
- The Need for a New Solution
- Response Management'The Key to Managing Change Effectively
- Multiple Advantages
- Fast Results
- Future Plans
- About Kinaxis