Building the Supply Chain future : Kinaxis RapidResponse for better Concurrent Planning in 2030

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Sales and operations planning (S&OP) is a process for better matching a manufacturer's supply with demand by having the sales department collaborate with operations to create a single production plan. The broader goal is to align daily operations with corporate strategy. As the companies are expanding tremendously in today’s era, it is necessary to have a centralized view which would allow everyone to be on same assumptions. Even with the same data, the procedure a particular thing, for instance, the days of coverage is calculated in Microsoft Excel may defer person to person or department to department within the same company. To get rid of such errors and to centralize these planning activities, it was necessary to take a step ahead in the digitalization era by adapting a software which would revolutionize the planning activities. One such software that is the greatly used in the supply chain industry is Kinaxis Rapid Response. Implementation of Kinaxis Rapid Response in the supply chain grants an upscale degree of control in location mapping, process status, and end-to-end visibility. It is a great tool for what-if scenarios, which allows to visualize the impact of the slight change in the planning scenario. Presented in this paper, is a concise review of Kinaxis Rapid Response software, and its applications in the Sales and operations planning (S&OP). It also explains the implementation of this software in the industry and the adaptation of the employees towards the new software. It also explains utilization of the data generated by the supply planning network by performing analysis, to better understand factors contributing to the problems faced in the supply chain, which in turn, helps in better decision making and alternative measures for improvements. The paper discusses the implementation of this technology to maintain trusted centralized visibility in the complete Supply Chain Management system, to avoid misinterpretation of information and maintain the integrity of promises made amongst the involved people.

1. Introduction

Focus, alignment and synchronization are continually achieved among all functions of the organization by the executive/leadership team through the sales and operations planning (SOP) process. The sales plan, inventory plan, production plan, strategic initiative plan, new product development plan, financial plan and customer lead time plan is a result obtained from the SOP process. The frequency of the plan and planning horizon depends on the type of industry. A tighter SOP is required for the short product life cycles and high demand volatility, than steadily consumed products. Supply chain management is also enabled in the SOP process, if they are done well. (1)

 Customer demand and supply resources are reviewed periodically in the SOP process, if properly implemented. RapidResponse re-plans the demand and supply across the planning horizon. The primary focus of the re-planning process is on future actions and anticipated results. It helps the management team to understand how the company achieved its current level of performance and the changes made from the previously agreed sales and operations plan. (1)

Kinaxis is a company based in Ottawa, Canada. It focuses on supply chain management and sales and operation planning software. (2) RapidResponse is the most subscribed product from Kinaxis. Supply planning, demand planning, order fulfillment, inventory management, capacity planning, supplier collaboration, master scheduling, material requirements planning, and SOP, are some of the applications of RapidResponse. (3)

 

2. History

Cadence Computer Corporation was founded in 1984 by three former Mitel engineers. The goal was to do a supply-chain analysis of using custom mainframe computers. Cadence Computer Corporation was later named to Carp Systems International, inspired by the nearby Carp River. The name was later changed to Enterprise Planning Systems, then Webplan in the mid-1990s. The focus of the company shifted from making hardware to providing the software. (2)

In 2000, it was renamed as Kinaxis. The venture had raised 33 million USD. It started selling software by subscription instead of its old method of a one-time fee. It raised a total of 100 million USD as an IPO on the Toronto Stock Exchange in June 2014. Thereafter, its market capitalization has increased to $1.7 billion, as of August 2017. (2)

3. Kinaxis

Kinaxis is a company based in Ottawa, Canada. It focuses on supply chain management and sales and operation planning software. It is listed as an IPO on the Toronto Stock Exchange. It is an SP/TSX Composite Component. (2)

Cadence Computer Corporation was founded by Duncan Klett and two others as in 1984. The company went public in June 2014. It has more than 500 employees. (2)

Kinaxis used to provide supply-chain-management software on a one-time basis but later changed it to a subscription basis. The subscription is primarily taken by the large, multinational companies. Its customers include Ford, Avaya, Qualcomm, Bristol-Myers Squibb, and Cisco. Kinaxis also provides support services to their subscribed customers. Their contracts generally are into action for about five years. RapidResponse is their main product. The subscriptions generated about 77% of their revenue in 2017. Companies such as Deloitte and Bain Company share a percentage of the subscription revenues to install Kinaxis software. South Korea holds two data centers for Kinaxis. With approximately 100 customers, Kinaxis makes a profit with their software related to supply chain planning, for about 5% of an estimated $4 billion. In 2016, revenue generated from the US, Canada, Asia, and Europe were 85%, 4%, 8%, and 3% respectively. SAP SE and JDA Software are among the major software competitors in the supply chain industry. One of the most important customers unsubscribed from RapidResponse in 2017 which impacted 3% of lower revenue for the company. (2)

4. RapidResponse

Kinaxis RapidResponse is a software that provides supply chain management solutions which could be configured in order to attain multi-level planning for large enterprises. RapidResponse has a great potential to manage multiple interconnected supply chain planning processes within an organization which requires supply chain planning and analytics capabilities. (3)

RapidResponse assists with a financial and operational performance by connecting the data, processing the data, and people in a single environment. Aerospace and defense, industrial, automotive, semiconductors, consumer electronics, consumer products, and life sciences are some of the industries where RapidResponse is greatly used. (3)

Supply planning, demand planning, order fulfillment, inventory management, capacity planning, supplier collaboration, master scheduling, material requirements planning, and SOP, are some of the applications of RapidResponse. Customers usually personalize their subscription agreements with Kinaxis based on their applications and the number of end users in the organization. Kinaxis has its headquarters in Ottawa Canada. It was founded in 1984. It has offices in Europe, North America, and Asia-Pacific. (3)

5. Implementation and learning curve

RapidResponse is implemented by large, multinational companies by taking its subscription from Kinaxis generally for about 2-5 years at the beginning. It is linked to a large data retrieval system such as SAP. Rapid response has many modules such as supply planning, demand planning, order fulfillment, inventory management, capacity planning, supplier collaboration, master scheduling, material requirements planning, and SOP process. Kinaxis also provides support services for the product to its customers. The implementation of RapidResponse by connecting it to the data retrieval system is achieved in a month, depending upon the requirements of the customer. However, the learning curve behind this technology is considerably large.

Kinaxis does provide training for its customers on the purchase of subscription for a certain period of time. However, as new users are being added daily in an enterprise and it is essential to train them, the enterprise needs to spend lot of money and resources to train their users and modify the modules as per the demand of the users.

Many users are observed to complaint about the complexity of the system. It is important to understand that all software and database retrieval system have a long learning curve. A new user cannot learn system like SAP over a day, it takes about six to twelve months for a user to excel in it. Similar is the situation with RapidResponse. It has a long learning curve, but once the user understands the principles behind it, RapidResponse would then become a blessing for the user. RapidResponse is great for scenario planning, it allows the user to visualize how a change for example a delay in a particular batch would impact on a long term basis. The user could then select the best scenario for the enterprise after seeing the impacts. RapidResponse is also good for multi-level planning, i.e. suppose a company has to manufacture 5000 cars, RapidResponse would allow the user to understand the demand for the number of nuts and bolts required for it and would allow the user to plan for it accordingly. RapidResponse allows the user to do it in the most optimized method.

Below is an example of the RapidResponse console looks like. It shows a planning sheet which includes demand, supply, available date (if late), late quantity, balance, expiry risk (date), expired quantity, months of coverage, and safety stock target (months).

Figure 1: Planning Sheet

 

Below is an example of production plan volume, it is a comparison of last month plan v/s this month plan

Figure 2: Supply Plan Dashboard

6. Users able to make smarter and faster decisions

Kinaxis RapidResponse provides the user with the speed, efficiency, and flexibility, which is required to manage the supply chain volatility of the 21st century. RapidResponse is the key to achieve concurrent planning. (4)

RapidResponse allows the user for concurrent planning to make collaborative business decisions faster. End-to-end visibility reduces unexpected risks and lets the user track performance. The user would be able to plan better over time. With planning automation, the user could cut costs and improve productivity. RapidResponse allows the user to streamline workflows and responsibilities. (4)

What makes RapidResponse unique?

Synchronization: The user can understand the performance of the system as per the current plan. The user can also interpret the impact of a change across the end-to-end network. RapidResponse is a single cloud-based platform, code base, and data model that allows the user to synchronize all aspects of the supply chain within the enterprise. The result is a dynamic supply and demand balancing. (4)

What-if scenarios: The user may access the historical data or may look future forecast for any planning horizon. The user can run any number of scenarios, create complete supply chain replicas, and capture the historical context in seconds. The result is KPI and accountability-based decision-making. (4)

Personalized experience: RapidResponse allows users to work smarter instead of harder. The responsive role-based RapidResponse interface lets the user tailor metrics and data and guides the user throughout the day with workflows, playbooks and alerts. The result is a planning tool the user actually likes to use, with no coding required. (4)

Smart collaboration: RapidResponse segregates the responsibility in the matrix organization. It allocates the job to the right person and shares the required information with that user. The responsibility matrix shows the user who to collaborate with. It delivers the context that is required by the user. It archives the decisions made by the user across all within the platform. This result in quicker and smarter collaboration. (4)

Practical innovation: RapidResponse is very effective to implement real-world solutions to the various supply chain problems. It is constantly innovating which revolves around practical applications, filled with a ton of benefits. (4)

Augmented intelligence: RapidResponse allows the user to automate various routine process and focus on the exceptions. Its predictive algorithms is always working and synchronized. The user can now focus on issues that are really critical, since the machines would be doing the time consuming activities. (4)

Flexible maturity and scalability: SOP, demand, supply, capacity, and inventory varies incredibly with time. Since the RapidResponse is based on a single platform, it lets the customer to add the various required capabilities easily. RapidResponse give the customer ability to mature and scale their supply chain. This is achieved by the customer at their own pace. This process does not require the customer to run a custom code for each process. (4)

Planning and execution alignment: RapidResponse reduces the gap between planning and execution. The ERP-agnostic solution provided by the RapidResponse allows the user to connect all internal and external data sources. These data sources include multiple ERPs. There are no duplication of ERPs. This results in a unified, connected, digital enterprise. (4)

7. Major Competitors to Kinaxis RapidResponse

SAP, Oracle, Logility, Llamasoft, SAS, E2open, Infor, Manhattan Associates, Blue Ridge, Anaplan and Aspen Tech are few of the major competitors for Kinaxis RapidResponse. Anaplan is considered as the biggest competitor for Kinaxis RapidResponse.

When compared on the overall peer rating based on the customers rating, it was found that the order planning received similar rating on both the platforms. Kinaxis RapidResponse has a better overall peer rating in Collaboration, Ease of Use, SOP, Production Planning, Manufacturing Scheduling and Replinishment Planning with a delta of 10% and below. Anaplan received  bettern overall peer rating for scalability by 3%. Scenario Management, Demand Planning and Inventory planning was better in RapidResponse according to the overall peer rating with a delta greater than 10% and less than 20%.

Figure 3: Overall Peer Rating

When the experience of the customers were analyzed, it was observed that the flexibility of pricing was better in Anaplan than in RapidResponse. Vendor Response Timeliness was equal when compared across both the platforms. Evaluation Contracting, Integration Deployment, Ease of Deployment, Service Support and Quality of Technical Support was better in RapidResponse than in Anaplan according to the customer experience. But the difference wasn’t considered significant, as the delta of the customer experience was no greater than 10%.

Figure 4: Customer Experience

 

8. Implementation of Kinaxis at Bristol-Myers Squibb

Bristol-Myers Squibb (BMS) has been using Kinaxis RapidResponse for over 3 years now. The main purpose for which they use this tool is for concurrent planning and for complex analytics.

There are four phases that the journey of RapidResponse can be divided at BMS:

1. Evaluation Contracting

2. Integration Deployment

3. Service Support

4. Product Capabilities

 

1. Evaluation Contracting

There were four factors that were considered by BMS while purchasing this product/service:

1. Improve business process agility

2. Create internal/operational efficiencies

3. Improve business process outcomes

4. Enhance decision making

 

Anaplan, E2open and Oracle are the other considerations along with Kinaxis RapidResponse taken by the BMS.

Anaplan was the tool that was highly considered with Kinaxis RapidResponse. The super users from BMS used both the tools and voted for the selection amongst them


Figure 5: Willingness to recommend: Kinaxis Rapid Response vs Anaplan


Figure 6: Analysis on Figure 5 above

 

 

The key factors that drove the decision towards Kinaxis RapidResponse:

1. Product functionality and performance

2. Product roadmap and future vision

3. Strong customer focus

 

BMS greatly appreciated Kinaxis for the following factors during evaluating and contracting:

1. Overall rating of evaluation and contract negotiation with the vendor

2. Ability to understand your organization's needs

3. Timely and complete response to product questions

4. Pricing and contract flexibility (pricing and terms)

5. Satisfaction with the value the product provides for the money spent

 

2. Integration Deployment

Kinaxis RapidResponse requires some amount of Master Data transformation coming from ERP. The implementation strategy was working with both the vendor and 3rd-party service providers. Accenture is the third party service provider to BMS. The deployment took about nine to twelve months. The quality and availability of end user training was appreciated highly by BMS. Ease of Deployment and availability of quality third party resources was also commendable.

 

3. Service Support

Services and support received for Kinaxis RapidResponse was also highly appreciated by BMS. This was dependent on the following factors:

1. Overall rating of service and support

2. Timeliness of vendor's response

3. Quality of technical support

4. Quality of peer user community

 

4. Product Capabilities

The overall rating of the product capabilities received from BMS for Kinaxis was high. (7)

9. Insights about the Kinaxis RapidResponse Users

The type of industry where Kinaxis RapidResponse is emerging and expanding includes manufacturing, retail, transportation, services, communications, media, energy and utilities and finance. Manufacturing sectors are the major benefiters of Kinaxis RapidResponse. This can be clearly seen as they hold 58% market of Kinaxis. Retail industry is the next major user of Kinaxis RapidResponse. They are equivalent to 21% of Kinaxis’ customers. Transportation industry and service industry are about 5% customers of Kinaxis individually. 4% of the customers are from the communication industry. There are some other industries such as media, energy and utilities, finance, etc. that hold together 8% of the market for Kinaxis.

Figure 7: Type of Industry where Kinaxis RapidResponse is used

The diagram below shows the company size of the customers of Kinaxis RapidResponse:

Figure 8: Size of the company where Kinaxis RapidResponse is used

 

It can be seen that the major proportion of customers have a company size of greater than 1 Billion USD. 1 Billion USD to 3 Billion USD, 3 Billion USD to 10 Billion USD, 10 Billion USD to 30 Billion USD and greater than 30 Billion USD companies are major customers with approximately holding 75% of the market together, i.e. 20%, 20%, 18% and 16% respectively. 6% and 4% of the customers have a company size of less than 50 Million USD and 50 Million USD to 250 Million USD respectively. Companies with a size of 250 Million USD to 500 Million USD and 500 Million USD to 1 Billion USD hold the market share for Kinaxis by 9% and 7% respectively.

10. Future Scope

Following 3 predictions could be made for the next 10 years:

Data will be shared across all platforms in the supply chain: Great level of supply chain data would drive into the supply chain across all industries, be it a major car producing company coming up with a new car or a drug manufacturing companies selling its products at a pharmacist. Sharing data with the trading partners will become a standardized procedure in the next 10 years across many enterprises. Some organizations have already started with the practice. (5)

Job functions would be changes in the companies: Kinaxis sold their RapidResponse subscriptions by campaigning that the customers won’t require positions like “supply planner”, “demand planner”, and “master scheduler”. The functions of these positions have been collapsed into a single data model in RapidResponse. There would be more end-to-end supply network planners instead, in the next 10 years. (5)

More collaboration would be observed across all stakeholders: Sales and marketing were facing challenges while participating in scenario planning because the techniques used to solve these were old. All enterprises would be dependent on the collaboration and scenario planning among all members of the enterprise in the next 10 years. Based on the key performance metrics, the best strategy could be picked by the members of the team. (5)

11. Conclusion

RapidResponse is a great tool to see the future impact. Its strength allows the user to run what-if scenarios and see instantaneous impact of each scenario. Many enterprises have greatly appreciated RapidResponse, since it allows them to analyze their current situation more effectively. It allows the user to analyze the root cause of the problem and come up with a solution that might be a potential fix for the same. (6)

The market have turned volatile and fast-paced. Customer expectations rises day-to-day. The ability of an enterprise to respond rapidly to changes in the market, sets it apart. RapidResponse enables its customers to meet the needs of the market customer along with the internal objectives. RapidResponse was able to respond effectively to any changes in the customer’s business. (6)

This is a very significant paradigm shift, and organization-wise and skill wise, many enterprises are still learning and figuring out how to incorporate and change their process so that the user thinks about and manage things vertically, versus layer by layer. (6)

 

12. Reference

1. Sales and operations planning

(https://en.wikipedia.org/wiki/Sales_and_operations_planning)

2. Kinaxis

(https://en.wikipedia.org/wiki/Kinaxis)

3. Kinaxis RapidResponse Software

(https://www.softwareadvice.com/scm/kinaxis-rapidresponse-profile/)

4. Make smarter supply chain decisions faster

(https://www.kinaxis.com/en/our-platform-rapidresponse)

5. 3 Predictions for the Future of Supply Chain by 2030

(https://blog.kinaxis.com/2016/10/3-predictions-future-supply-chain-2030/)

6. Kinaxis Testimonials

(https://www.featuredcustomers.com/vendor/kinaxis/testimonials)

7. Kinaxis Peer Review

(https://www.gartner.com/reviews/review/view/589143) 

Comments
Steven Van Aken 2 yrs

Very interesting Tejas. Are your overall peer rating based on published studies?