Ep: 2 Make Fast Decisions on Critical Materials with DELMIA Supply Planner

00:08 Therese Snow 

 

Hi and welcome to our DELMIA podcast, Global Operations on the Go. I'm your host, Therese Snow. Today, I'm speaking with Camilo Gaviria. Camilo is the Vice President of Technical Sales at DELMIA. He oversees the DELMIA center of excellence within Dassault Systèmes. He's speaking with us today on emergency services solutions.

 

00:37 Camilo Gaviria 

 

Thank you. Indeed, I'm currently heading DELMIA center of excellence within Dassault Systèmes. And for the last few weeks, and in response to the current crisis, I've been heading a team who has set up an emergency planning solutions based on our standard products. In this case, we're going to be talking about the emergency supply planning solution. And I'm going to be giving you a little bit of an introduction into what we have developed for different types of organizations in the market.

 

01:10 Therese Snow 

 

Okay, excellent. All right, Camilo, well, the Coronavirus currently has a world in its grip with emergency situations being reported everywhere. Really, there are a few areas untouched by the crisis. Supply chains the world over are coming under a lot of scrutiny as they struggle to deal with the huge peaks in demand and disruption on a scale we could not have imagined prior to the current crisis. Why our supply chains disrupted, and what is the ripple effect of the disruption?

 

Different Operations and Viewing Component During the Covid Crisis

 

01:40 Camilo Gaviria 

 

Yes. So in principle, even today, the core of supply chains are still the workforce, right? Machines still need to be operated. Processes need to be overseen. Quality steps need a viewing component to actually sign off on a particular quality test. Right. So there's still today a very heavy core of human workforce requirements. The moment that COVID as a pandemic puts at risk the availability of that workforce, the different operations and different levels of the supply chain such as automotive, for example, at tier one, tier two and tier three level of suppliers, you start seeing all these shorts shortages in workforce, which put at risk their own supply.

That of course, generates a ripple effect throughout the supply chain of not only automotive, but all the associated suppliers. So the entire value network of that particular OEM, for example. And if you can imagine, this happens across all industries, ones more hit than the others. But still, at the end of the day, because of the length and the extent of the pandemic, these effects are starting to permeate across multiple industries. It amplifies itself, right. So the moment that one industry fails or starts failing, an industry which might be dependent on that one immediately perceives an additional pressure on the supply side, for example. And, and that basically just generates long-standing behavior that needs to be intervened via planning via countermeasures, that minimizes the impact of these phenomena.

 

03:24 Therese Snow 

 

All right, excellent. Thank you. One of DELMIA’s new emergency solutions is based on DELMIA Quintiq standard macro planner. I understand it's designed to match supply and demand. So how does emergency supply planning help in this real-world crisis?

 

N95 Masks Supply and Capacity

 

03:40 Camilo Gaviria 

 

Yes, let's take a very real example that I think has been over the news over and over, the availability of masks. If you take the overall availability of N95 type of masks, the respirators that are providing 98.9% immunity, these were in normal supply for what used to be the normal demand pattern that the companies producing them perceived, right? So they were used for multiple applications. They had a relatively predictable demand for what that a particular market sees. It was quite okay, and capacities were well aligned. All of a sudden, you see this huge peak in demand because of the pandemic, right. And unfortunately, the entire industry was at capacity with a little bit of buffer but never enough to cover for a worldwide global pandemic and the associated demand. So, what you end up with is a series of mixture of materials in the hands of the user. They will have some high quality, high protection mask, but they will have to cope with the fact that they will not be enough to cover for the full necessities, right? There's a structural shortage of the materials and the supply chain is not able to react quick enough.

 

05:13 Camilo Gaviria 

 

What does the supply planner help with? You have to accept, you're not going to get more masks to be able to produce – that's a fact. But what you can do is allocate those masks in a smarter way, by covering the more critical cases, for example, or the more critical areas of a particular country or for a particular network. With those masks while leaving maybe less immunity providing masks, so the cloth masks, to cases that are either not as contagious or in locations where population density, for example, is lower. That smarter allocation allows you to increase KPIs such as coverage, so the overall fulfillment of the demand, but better still, the overall fulfillment by level of criticality. From the health perspective, that could be one application, for example. Take it from the commercial perspective; you have a series of customers that probably are buying your product have slightly different margins.

And you also have a series of suppliers that are struggling and are probably not being able to supply neither on time nor in full. So you're trying to literally juggle these two variables and trying to match the best way possible, your orders to get the maximum possible profitability out of your very scarce supply. And by the way, that's changing drastically every day. So you need to be able to recalculate to react to that efficiently day after day, right. And, and that's where such a demand and supply balancing solution works. Now, what can it balance? It can balance anything from materials to people, and going through very creative applications of those concepts, right? So, a material can be a physical material, but it could also be just certifications. It could also be just volunteers, for example. So we can literally manage any type of demand and supply balancing act and drive the KPIs using mathematical optimization. So, also driving towards a very particular improvement of a set of KPIs. And that's how we can support different crises from different perspectives, all related to some type of shortage in supply.

 

07:36 Therese Snow 

 

I'm expanding on your answer a bit. Can you tell us how emergency supply planning can benefit the medical supplies field in areas such as production and distribution? For example, what kind of visibility and support can emergency supply planning provide?

 

Searching for Emergency Supply Solutions

 

07:53 Camilo Gaviria 

 

For example, the first thing that we've noticed has happened at different levels and in different countries. There's not only a central government, but also at regional level is that hospitals and medical associations or the medical organizations are all of a sudden have assumed the responsibility of ensuring the proper supply of this medical supplies to hospitals, are not prepared, neither to manage the process and the complexity that any that it entails, nor to have the adequate amount of visibility as to the level of stocks and needs that a particular site has. This because typically, each location has their own inventory management system, they have their own network and their own procurement approach with their suppliers. The moment that crises, like the one we're living now, kick in, central government immediately takes over the responsibility of ensuring the proper and allocation of those materials, or at least in the majority of countries, that's how it works, right? In that moment, those organizations struggle.

They end up juggling with excels, they end up juggling with emails and phone requests, just centralize that information. So, just the ability to provide a way for these endpoints to enter information or provide, for example, a standard template of information, and load it in a central data repository that gives you a projection of those inventories under the current demand, is already value in itself. You have full visibility as to what the impact of those shortages of supply will be, the shortages in production capacity will be, and how it will affect your end scenario. And then you can start making smart decisions. Okay, if I prioritize a particular set of demands, particular set of patients, for example, or hospitals, I'm going to increase my fulfillment, but maybe the fulfillment of the critical level drops because that region is not particularly filled with critical patients. And that's something that allows these organizations to better assess how they allocate those very scarce resources.

 

10:10 Therese Snow 

 

So DELMIA Quintiq solutions are normally designed to deliver a perfect fit for customers, but the emergency supply planner solution’s designed for rapid deployment in less than 30 days. How do you achieve that?

 

10:24 Camilo Gaviria 

 

It's indeed a very strict approach. We've sat down with the experts that have deployed our solutions in production environments, and indeed, what we typically see is that we aim for 100% achievement of the customer requirements. We also see that in many cases, when we load the data, the initial data that you load is already good enough to provide you very good results to make high-level decisions. And this was one of the critical pillars of how we came up with this. We are trying to solve critical situations in the market, in the governments, in the organizations, so the idea of the solutions is to provide the best possible solution to a particular challenge.

They were not designed to replace full-blown enterprise level, for example, planning solutions, or ERP systems, or MPs systems. No, these are solutions that are designed to support a particular use case that solves a series of challenges, supply chain-related, and to that extent, the particular use case could be how are we going to react in the long term to the ramp up of capacity once things go back to normal? That's a very high level requirement, that probably involves loading the data of the full network. And, and it's perfectly fine. Because the use case is defined. We want to understand how we're going to ramp up.

 

A 30-Day Turnaround and Balancing S&OP

 

12:05 Camilo Gaviria 

 

How do we get it down to 30 days? Turns out that when we load this data, we typically spend much of that time getting it fine-tuned to achieve 100% feasible, 100% perfect results in terms of daily planning. But it turns out when you're managing crises, typically you use the Pareto rule. 80% Good is already better than any other alternative. You go with the first and best solution that you can find with a limited amount of information that in any case, you have in a crisis. So, once you acknowledge that we said okay, our standard solution already supports full-blown processes, like S&OP – supply, and demand balancing in S&OP. So, there is no reason for which if we stick to the core data components, the things that we typically see in all customers, for example, we should be able to get high-quality plants, maybe not 100% optimal or 100% identical to what the customer would typically expect in a production environment, but good enough to communicate with the stakeholders that are involved in this particular crisis.

Again, supplier management, from a commercial perspective, you're not trying to detail out the individual tonnage of a particular order. You're trying to interact with them to understand if 100 tons will make a difference, or if 1000 tons will make a difference, and if you're going to be able to receive them on time. And what is going to be your impact if they don't come up on time? And what is the best possible scenario if that happens? Once you acknowledge that the level of aggregation, the level of complexity, can take a hit in that sense, but you still get the results that you need, and they are still much better than what you can achieve via pen and pencil or Excel. We realized that we can load that data pretty quickly and guide our customers, our prospects, our partners, into what are the standard capabilities doing for them? What are the results that are popping out of the solution as per standard configuration, meaning for them and how to interpret them in a successful way that can be communicated to the stakeholders and that provides the scenarios that they need? And in that sense, the solution has a particular approach.

We're spending significant amount of attention to the customer facing component. We're guiding our customers through the journey of loading the data, identifying it, mapping it, and we're taking to some extent, a hand-holding approach into the planning exercise itself. So we're not only delivering the solution, we're actually delivering the support required to be able to deliver those plans that ultimately go in to the stakeholders. Between those two approaches, a very strict implementation of core standard capabilities and a pragmatic collaborative approach with our customers, we are able to reduce this to 30 days. And again, the usage of this is foreseen to be interim, right? You deal with the crisis, you plan your next year. And once you're executing those plans and successfully, hopefully, ramping up again, then you can decommission the solution and either implement, if you're satisfied with the type of results, implement a production level solution that takes care of more details and probably complexities that you now want to take into account to grow in a robust way. And we can do that via the implementation of our standard solutions and getting there with the complete subset of capabilities. But in principle, the emergency planning solution is an interim solution that supports a particular crises situation. Thank you. This is what we wanted to share with you today around the emergency planning solutions and supply planning. Thank you very much, and we remain available for your questions.

 

15:59 Therese Snow 

 

All right, so thank you Camilo. So how can our podcast listeners obtain emergency supply planner? Send an email to DELMIA.COVID19@3ds.com. Thank you so much for listening to Global Operations on the Go.