Supply Chain Management

Will there be impact of economic downturn on eCommerce platform investments?

Sun, 04 Jan 2009 17:01:11 +0000

The answer is an obvious yes. In eCommerce or in multi channel retailing the focus is on cost of effective fulfillment options, reducing working capital and inventory. In the last 6 months there has been no extreme step such as eCommerce program put on hold due to the ongoing crisis. While long term strategy will be intact but eCommerce investment is likely to be spread over longer horizon. There is definitely much more emphasis on prioritizing eCommerce platform technology investments.

Ownership of forecasting function

Fri, 02 Jan 2009 10:37:58 +0000

Organizations treat forecasting function differently based on their maturity levels; with a lagging organization having an ad-hoc approach to the entire process. There is hardly any focus on forecasting process and a dominant function decides the final numbers that also keeps changing and always remains a moving target. On the other hand, a mature supply chain organization would try to incorporate systems in place to ensure that forecasting as a process works fine and achieves the overall business objectives. I have seen and experienced that “right ownership” of this process is a very important and critical element to ensure that the forecasts are not biased and serves its desired purpose.

Attribution Analysis in Supply Chain

Thu, 01 Jan 2009 02:18:14 +0000

Supply Chain function in most organizations is multi-faceted and requires management through a complex hierarchical organizational structure. At one end are Forecasters who manage the most upstream function and at the other end are executioners (production and procurement managers) who manage the most downstream function of supply chain. These functions have evolved over a period of time, found to be most optimal and is based on simple principle of segregation of duties.

What is selling in my stores?

Mon, 29 Dec 2008 05:51:00 +0000

As an emerging trend over last year or so, retailers are warming up to the idea of store level collaboration with the suppliers. Supplier collaboration can enable retailers to improve the three most important store level metrics - availability, cycle times, and cost. When the retailers start sharing the POS and inventory data to the vendors in a near real time view and define business processes to support action on the data, that allows the supply chain managers at both ends collaborate to make decisions.

Outsourcing in supply chain – a unique way to deploy global supply chain programs

Thu, 04 Dec 2008 05:50:35 +0000

This is based on my recent project experience with one of the leading networking companies in US, which is running its strategic supply chain performance improvement initiative globally. Usually, companies tend to implement such initiatives as a pilot for a select few customers and markets and once the pilot is run for a certain period of time, it is rolled out to other areas incorporating learnings from the pilot phase. The rolling out of such strategic initiatives to all the markets globally is imperative to achieve the desired financial benefits, finally leading to revenue and profit growth. The key is the global execution that becomes a real challenge in a global scenario, especially when it demands a significant amount of investment in terms of time, cost, talent and effort from teams located regionally.

....Customer demands "Where is the tangible translation of my Compliance to revenue you promised from my SRM solution, show me? "

Wed, 03 Dec 2008 01:39:56 +0000

Has a post implementation experience ever hunted you down with such statements from the customer?
Are you ready with the metrics, have you even thought about how to have these metrics strategized and signed off even before you could possibly track them.
How can you measure it, how will you show that realization from day 30 post go-live, 1month would be a very tight time frame to really show benefits on the P&L, but today’s customers, for sure are going to.
Trying to pitch in for a recent SRM proposal, I have been asked these questions on what your strategy is going to be, to make me realize on post implementation benefits.
Are you going to fool us in the rhetoric of an opportunity by showing flashy Aberdeen figures on what best in class people have reaped, and wash your hands off, post implementation, or you’ll assure us with metrics, track them post go live.
Will you reassure us of getting feedback from the CFO desk comes back saying “what a wonderful solution you’ve implemented, you’ve reduced transactional, operational costs with the auditors being really happy with the compliant transactions, processes etc, WOW we can see the affect on the P&L, great job done!!!!!!
Now let’s go one step below trying to collaborate the thought process of the SRM fraternity to arrive at some strategy, can we build a template that’s true by itself to help consultants keep their face upright with metrics to address heavy customer questions.
What are those possible metrics?
Q) What are those metrics that can translate compliant transactions to remarkable tangible savings (indirectly the revenue)?
Track maverick spend before go live and directly compare with contractual spend post go-live
Q) Should we do this category wise before and after the implementation
Identify those top 10 categories accounting to the highest spend, give a percentage that is achievable and then track it post go-live
Q) Implementation of Enterprise wide Contract Management v/s a customer situation with no such traces
Most companies wouldn’t have had the thought for Buy/Sell side Contract management, will this before and after comparison help?
Q) Analyzing Spend and giving them the facts about their very own state of affairs with the existing SRM landscape if any
This would typically translate to running the spend analytics tool and giving them a picture of their spend health, where they stand in terms of compliance, maverism, their weak links, whether they need strong backing from kicking off Sourcing projects (typical category management) or even do a business process re-engineering before opting for a full blown implementation.
This is what all I could think of, if there are real facts that you’ve faced in the demanding regime of tough customers, let’s arrive at a broader discussion frontier
I would say there is no demanding customer, lets reasonable customer. We are all Customer’s at the end of the day.
“Why would I be investing in a solar powered heating system in my house, would I benefit on lowering my electricity bill, on an average I want to see @least 200 bucks saving every month, so do you call me demanding or questioning something I’ve been promised of”.

Let’s work towards building some metrics around these lines coming handy in getting the customers, Value for their money, their lean IT budgets.

I repeat what I ended the last time with, "Whatever it is it has to be real"

-Tridip

Capturing Warehouse Costs and Margins

Wed, 26 Nov 2008 17:14:36 +0000

This is my third blog which is an extension of my previous one, "Channels to Leverage Warehouse Revenue". In this blog, I will explain what a WMS software needs to scale up to in order to capture revenue related information.

First, it must be able to capture costs for warehousing tasks carried out or space utilised. Having said this, tasks carried out will be treated under activity based costing, wherein each activity carried out within a WMS transaction will have an certain cost associated to it.

The Other Side of Supply Chain

Sat, 22 Nov 2008 20:21:40 +0000

Supply chains have been traditionally linear in nature. Let me explain what I mean by a linear chain.

Raw materials are procured from sources such as vendors, transformed into a sub-assembly and/or into a finished good again at factory and transported to a distribution center or a warehouse. The number of echelons in the chain vary based on industry structure and resulting dynamics. Each echelon adds a finite value by either transforming the product into something more worthy of consumption or moving it closer to a consumer. This chain quickly became a network when organizations felt strongly about leveraging core-competencies of other organizations and developing one of their own.

Automate, Integrate, Extend….err Exploit

Wed, 19 Nov 2008 09:08:14 +0000

Continuing from one of my previous blog post on the need to make Information Management central to spend visibility initiatives, I offer my views today on the pivotal role spend visibility initiatives play in Procurement transformational journey. And I do so, on the back-drop of three simple yet powerful words - “Automate, Integrate and Extend”.

Where do I start Supply Chain Risk Management in my supply chain?

Tue, 18 Nov 2008 10:34:44 +0000

Implementing Supply Chain Risk Management (SCRM) is as much about changing the mindset of people, as much it is state-of-the-art tools and processes. I firmly believe that if every person operating within the supply chain is made aware of the risk associated with each decision, half the distance to success is traversed. Ability to foresee and assess the impact of the risk is probably the toughest thing to instill across supply chain, rightly so, for multiple reasons.

Good and bad news in Supply Chain improvement programs

Thu, 13 Nov 2008 07:24:47 +0000

I have had several discussions with clients and prospects in the last few weeks regarding their supply chain related transformation initiatives. Despite (or perhaps driven by) the macroeconomic challenges, most of the companies I have come across are moving forward with such transformation initiatives. It’s possible that there’s a sampling bias here and I may only be in touch with those companies that are actively pursuing a supply chain related transformation program. Irrespective, I consider that the good news.

However, as you might have guessed, there’s some bad news too. Let me illustrate the bad news with a specific example of a client that I recently met. This is a large F100 class company with a well-known track record in supply chain excellence. The client organization is expanding in new markets and channels and is clearly hurting in the supply chain aspect of that expansion. The challenges exist at multiple levels – strategic issues of where/how to compete at one end and tactical issues of supply chain execution at the other. The challenges the client organization faces are, however, so significant that the organization seems completely consumed by it. Each individual seems to have their own view of what the #1 issue is. There doesn’t seem to be a clear prioritization based on shareholder value (or similar metric) and no clear roadmap that helps resolve the various perceived #1 priorities. So the bad news is that some clients are finding themselves in a situation of panic where “we are so busy that we don’t have time to prioritize”. Are you seeing a growing sense of ‘do something’ panic around you?

Five 'I's' of Supply Chain Visibility

Thu, 13 Nov 2008 05:14:29 +0000

While reading a thought provoking blog on a speech by David Allen, famous author of “Getting Things Done”, I could not help but find a corollary between capabilities, what he calls as five “I’s” , of personal productivity software and an ideal supply chain visibility solution. A day in life of an executive is a quite interesting corollary for Supply Chain. There are constraints, demanding customers, reluctant suppliers and unforeseen meetings/happenings that continuously disturb the meticulously planned schedules. Executives pay a lot of attention to their personal planning gadgets and hire great assistants who help them maximize their day’s worth. Just goes to explain how much would be the worth of a supply chain visibility solution that allows the supply chain managers similar control over their processes.

SCM in a time of downturn

Tue, 11 Nov 2008 13:15:14 +0000

With recession fears taking over large swathes of economy and the new mantra - actually pretty old really - being "cash is king", how would this impact SCM as a domain? There’s a fundamental business angle to this and then there’s an IT program/project side to the story as well. At its core, SCM needs to look at three constituents, suppliers at one end (including the folks toiling for you in the intermediate chains), customers at the other end (retail or B2B across various channels) and the partners through the supply chain, primarily your logistics providers (the movers).

I can’t see you but I want to be nice to you.

Mon, 10 Nov 2008 18:32:35 +0000

Brick and mortar retailers have focused on the customer experience; store layouts, customer amenities, sales people, returns policies all contribute to the customer experience. There are retailers for whom the customer experience is an integral part of what they mean to their customers. So, when such retailers start selling through multiple channels, how do they ensure that the customer has a seamless experience across channels? Even more difficult to understand is, if one of the cornerstones of the experience is the “nice” feeling customers get in the stores. Over the phone I could still take orders and leave you with a nice feeling. How do I ensure a nice online experience? As a retailer, I can be fast and efficient. But when I can’t see you (and usually can’t talk to you) how do I be nice to you?

Managing risk for sustainability

Thu, 06 Nov 2008 08:17:21 +0000

Many companies are focusing on supply chain sustainability—looking beyond pure financial results to minimizing the environmental and societal impacts of operations. Ultimately, sustainability is an effort to preserve the long term operations of a company, its supply chains, and its community. Building a sustainable supply chain requires a keen focus on long-term strategies; maintaining a sustainable supply chain requires a focus on operational excellence and management of risks in the supply chain. In fact, effective risk management is an essential component of any sustainability strategy.