Posts Tagged ‘supply chain technology’

Are you Multi-Tasking or Asleep at the Wheel? A Lesson from Home Depot

January 23rd, 2011

So I just finished reading an interesting article in Business Week entitled “Home Depot‘s Fix-It Lady“. The article was from the magazine’s JAN 17-23, 2011 issue and was sub-titled “Chief Financial Officer Carol Tome has a shot at CEO, if she can solve the retailer’s technology problems”. Of course the mention of technology and a brand like Home Depot piqued my interest so I read on. Less than five paragraphs in and I was stopped in my tracks by what was either a blatant editorial misrepresentation or a serious case of rationalization by the Home Depot execs. And by a case of serious rationalization I mean the kind where you break you’re New Year’s Diet Resolution with a Peanut Buster Parfait from Dairy Queen on the assumption that the delectable desert does have milk as an ingredient…and everybody knows milk is a good source of calcium, right?

Well, in Home Depot’s case the article premised that Home Depot was so focused on new store openings through the first decade of the 21st century that they lowered their focus on technology in the stores and their overall operations. Because of this they are now doing what amounts to a “tech catch-up” with Carol Tome leading the charge. Here’s the thing….I have to call some serious BS on this one. Why? Simpy put, you can’t be a publicly traded company with a $60 billion market value and somehow wake up in 2008 and decide that the Internet and technology may be a good idea to explore. It’s embarrassing.

The reality, if I must speculate, is that the executive team at the very top was out-of-touch with the operational environment that the store managers and staff were dealing with. Unfortunately, in today’s market it is not enough just to have operations that can execute effectively. In Home Depot’s case they were executing in the early 2000′s, they were growing revenues and expanding their store footprint. However, the tragedy was they WERE NOT doing this WHILE also improving their technology.

For supply chain companies the lesson to be learned from Home Depot’s story is you have to develop an operating environment in your company that assumes technology is a key enabling tool to facilitate achievement of more revenue, higher profits, and delighted customers.

In the supply chain arena a key reason for ensuring your technological initiatives are a basic part of your operational plans include:

1) Heightened Expectations from Customers – The great thing about technology is that we can now be connected almost anywhere. The bad news for logistics entities is that this era of instant access has altered what your customers want. The 60-year old procurement guy who is nearing retirement will be replaced by a 25 year old. And guess what happens. The 25 year old has grown up with iPods, iPads, Twitter, Facebook and a bad case of ADD. His questions, view and approach will baffle the provider organizations that haven’t caught up.

2) Dwindling Resources – Not to sound ominous but the reality is natural resources like oil and their by-products are not infinite. This limited quantity coupled with a rapidly increasing populous that is entering the middle class creates some staggering calculus. The result of this environment is that companies should always be in a fight internally to understand how they can push initiatives that reduce waste and protect valuable resources. Ultimately this translates right back to the bottom line.

So the moral of the story is simple – Don’t Rationalize. Figure out a way to drive your operational plans while also improving the basic infrastructure of your operation. After all, isn’t that why executives get paid… in the middle-management world its called “multi-tasking“.

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Posted in 3PL Insights, Cost Efficiencies, Process Improvement, Reporting & Analytics, Strategy, Supply Chain Technology, Supply Chain Thoughts

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Supply Chain Leaders Need to Catch up with Today’s Technologies

December 22nd, 2010

Technology, A Key Tool for Your Supply Chain

“Four-who?…Oh FourSquare you say? What’s that – a new coffee shop?”

Go inside your supply chain department and start talking with the folks that make up your broader team and I suspect the above is the type of conversations you’ll end up having with many of your peers and leaders when it comes to new technologies.  I will say right off the bat – I don’t think anyone is a bad logistician or supply chain operator if they don’t know who FourSquare is or how to Tweet. The broader point to be made is that today’s supply chain organizations need to make sure they are keeping up with a broad spectrum of technologies that could mean big changes for their companies and their supply chains.

I think the supply chain, in particular, suffers more than most organizations when it comes to technology awareness because often times the supply chain leaders are those that got their start as operators. Whether they did their time in the supply chain fulfilling positions like warehouse managers, planners, or on the transport side, many of today’s supply chain execs are all people who have come up through the heavy-duty ranks of operations. As most of us operators known, I started on commercial vessels sailing the ocean-blue (see below pic), the operational setting is a spartan one where you often times make do with what you have. This make do with what you have is great for the income statement but not so great for ensuring you’re always one step ahead of your competitors. In the last twenty years, the supply chain has undergone a radical transformation. The advent of MRP and then WMS and TMS systems has created dramatic efficiency in just about every nook and cranny of the supply chain.

I believe the best has yet to be seen and the next ten years of innovation in the supply chain is really going to be incredible. We are just now starting to scratch the surface of various technologies that could all have a significant effect on supply chain costs. Some of these technologies include things such as:

This is certainly good news for all of us. I think the rational majority is clear-headed about the inevitability of higher fuel prices and rising shipping costs associated with higher security standards and governmental regulation.

The message is a simple one for all of us supply chain operators.  Get comfortable with technology and be equally adept at innovating as you are at driving margins and making that operation hum.

About the Author, Douglas Ingram

That's me! This particular ship was a Trans-Atlantic vessel that carrier heated asphalt at 300 degrees.

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Posted in Business Intelligence, Cost Efficiencies, Reporting & Analytics, Software as a Service (SaaS), Supply Chain Technology, Supply Chain Thoughts

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Geolocation Integration the Next Frontier for Supply Chain Entities

November 5th, 2010
Geolocation_in_the_Supply_Chain

Geolocation_in_the_Supply_Chain

As the old saying goes, “change is a coming”. These winds of change are multi-variant and are carrying a wonderfully potent mixture of geolocation, analytics, and SaaS to today’s businesses. In fact, the supply chain stands to be one of the biggest benefactors of this sweeping change.

For many years, supply chain practitioners have discussed and envisioned a future whereby geolocation data could be seamlessly linked with order execution, warehouse management systems (WMS) and or transporation management systems (TMS).  The benefits of being able to assemble this location data in real-time for the supply chain and effectively disseminate out to enterprise decision support systems and business users includes:

  1. Better Planning – understanding inventory flows at a pallet or case level and being able to understand the velocity of movement, in transit product and the position of inventory could have significant impact for corporate planners trying to appropriately allocate manufacturing capability, purchasing decisions and procurement of input materials.
  2. Optimization of Network - today the supply chain network of companies large and small is constantly in flux.  Things such as seasonality, promotions, rain fall, weather, fuel costs and other variables can significantly alter product flows from traditional patterns.  This constant flux makes it difficult for supply chain tacticians to understand their operating environment in real time.  What typically happens in today’s world is that supply chain leadership is always looking at a dated snapshot of the network and resulting product flows.  If supply chain tacticians had the ability to visually understand their environment in real time then the possibilities become quite endless and very interesting.
  3. Audit Precision & Compliance Initiatives – Another benefit of maintaining geolocation data that may not be so obvious is the financial benefit that could be realized.  In transportation, a common variable used in calculation of costs for over the road type movements is mileage.  With geolocation capability tied to various gates in a shipment’s lifecycle such as order confirmed, pick confirmed, in-transit, and POD, a procurement team could use time stamp data correlated with latitutde and longitude information to deduce actual mileage transited, cost estimates, route traveled, and velocity at various checkpoints.  With the same geolocation information described companies could reference rules and ensure compliance with either internal policies or insurance mandates.  An example of this could be the idea that a tractor-trailer cannot exceed some average speed.i>
  4. Green Initiatives – As green initiatives continue to take over old-school industries geolocation data can help  supply chain departments to gather the critical intelligence they need to undertake carbon footprint measurements and other green related initiatives.  Other capabilities provided by having precise location information
  5. Customer Service – An excellent use for geolocation data could include the ability to more accurately measure transit times from frequented origins to destinations.  For example, consider the case where a large distribution facility in a metro area restocks materials to numerous homes, stores or smaller warehouses in the state.  By maintaining geolocation data the distribution facility could more accurately assess transit times to each end destination, by time, by day, etc.
  6. New Service Offerings & Market Differentiation – The market for transportation services and third party logistics services continues to grow and become more competitive each year.  With geolocation capabilities transportation entities can offer new services to their customers and help differentiate their offerings from a sea of competitors and look-alikes.
  7. Safety – As the recent bomb incidents on board UPS planes indicated, we live in an increasingly dangerous world where cargo operations are being used as a mask for potentially nefarious activities by terrorists and wrong-doers.  Geolocation and its integration into asset management systems, inventory control and transport management could help provide corporations with clear visibility into key personnel, assets and product flows at all times.

So the question beyond what benefits will geolocation bring is one of how does it become a reality, what are the steps and what may be some of the most present obstacles today.

To usher in the type of benefits that can be realized from geolocation organizations need to have a few basic building blocks in place.

  • Centralized Data w/ Well Defined Schemas
  • Integration with Key Order Management, Inventory Management and Transportation Systems
  • Modern Applications Frameworks  (SOAP, REST, etc.)
  • Deployment of Applications to Diverse Devices (Web, SmartPhones, iPads)
  • Capability to Assimilate and Make Sense of Data (i.e. Business Intelligence Platforms)

The last point may be one of the more important points to make.  The premise of geolocation by default also means a literal avalanche of data.  In the example that was given above imagine a distribution facility normally has 100 orders a day to local destination points. With geolocation enabled these 100 orders could potentially produce tens of thousands of records with juicy tidbits like latitude, longitude, time, vehicle ID, driver ID, temperature, etc.  Without proper business intelligence platforms this data is somewhat useless.

Geolocation has some awesome capabilities for the supply chain and I am hopeful that with recent announcements and initiatives from government entities and startups alike that the promise of geolocation will soon be supplanted by a more widespread reality and many real-life implementations.

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Posted in Business Intelligence, Event Management, Geolocation, Reporting & Analytics, Sensor Technologies, Smart Phones, Software as a Service (SaaS), Supply Chain Thoughts, Supply Chain Visibility

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Are you a True Supply Chain Partner?

August 15th, 2010
Supply Chain Partners

Supply Chain Partners

You can review a quick video summary of the below article here

I’m sure we have all heard the saying, “You get more bees with honey than you do with vinegar.” Its a fairly common phrase. I was recently involved in a large project that involved many partners and some ground-breaking technology coupled with a very new business model for the supply chain industry.

It was during this go-live, and in the weeks following it, that this expression popped into my collective conscience and spurred a much larger internal conversation about what is a “partner” in the supply chain / 3PL context. For many of us that have worked on all sides of the supply chain and logistics ecosystem from sales to operational delivery the term “partner” is one that pops up pretty often and is part of the standard vocabulary of deal makers and wanna-bes alike.

In fact, I think the word “partner” is one of those words that is thrown around so loosely and incorrectly that it has lost much of its meaning, similar in the way that an improperly used tool loses its efficacy when not taken care or incorrectly applied.  Throughout my career I’ve played both sides of the table, the vendor side where you’re trying to win the business and you use the partner term to connote how much your “vested” in the relationship and the customer side where you tell your vendor you need a (wink-wink, nudge-nudge) partner. The customer definition of “partner” is often code for bend over. Not to be crass, but seriously, most often the “partner” term when used by your customer is another way of saying I need somebody who is going to deliver a Rolls Royce, with all the benefits, but at a Yugo price. Too many times when a customer uses the term partner they are using it improperly. By definition a partner is one that is united or associated in an activity of common interest. This “common interest” qualifier is the area where the partner term sometimes begins to first break down.

Customers and Vendors by default often times have differing common interests. The customer wants to get the best product at the least cost (typically), conversely, the vendor wants to get the most volume sold at the highest price possible with an acceptable end product to the customer. To try and link these two worlds together in a quasi-kumbaya moment is…well… dumb. I am all for partnerships, but when the term is used the buyer and the seller need to be clear on the definition. The partner definition by design should always be oriented towards “we all win”. Often times in my career I see the partner term used in the beginning of the relationship to only find out later that the customer really meant “I win first”.

I would stipulate that a “True Supply Chain Partnership” is one that is focused on a mutual tenet of winning together. Seldom in today’s global marketplace can any one entity achieve true success in their business endeavors without a motivated collective of teams, companies and people helping to steer towards the common goal. Partnerships in the supply chain context are good when both entities have a healthy mutual dependence on one another and have commitment at the highest levels of their respective organizations. Partnerships that are primarily cost-cutting endeavors for the customer should check the fancy partner language at the door and instead indicate what they are really after at the onset of the relationship.

After careful thoughts here are the key characteristics that a true supply chain partner should exhibit:

  1. Deep and comprehensive understanding of the operational & marketplace realities of the environment
  2. Strategic thinkers that are problem solvers by design
  3. Entrepreneurial mindset
  4. Fast movers (*no room for bureaucratic group-think in a high performing partnership)
  5. “We Win” orientation

Here are some additional characteristics of an engagement that will help foster the partnership:

  1. Measurement & KPI frameworks that are mutually agreed
  2. Clear expectations from both parties regarding performance expectations both operationally & financially
  3. Quarterly business review meetings that delve into the health of the partnership (Ops, Finance, Marketing, Sales)
  4. Open communication
  5. Incentives & goals that provide mutual reward to entities involved

In today’s technological environment, the competitive barriers for most companies have dropped precipitously and made “partners” even more of an important concept in business.  This is especially true in the 3PL non-asset world.  An entity with smart, experienced folks can quickly get up to speed and leverage relationships and on-demand models to compete against all but the biggest of providers.  The word “partner” and the partnership approach is something that should be protected and reflected on by each business executive seeking to employ it in their respective pursuits.

In the end, we all know that “You get more bees with honey than you do with vinegar” but …. what we may not all know is this: “The bee stays not in a hive that has no honey.”  I hope that each supply chain executive out there can reflect and begin to understand that partnerships are a two-way street.  Ultimately, a successful relationship depends on empathy, honesty, open communication and a shared commitment or goal.  Supply chain partners should always be mindful of this and seek to create the most high-performing and successful relationships they can to propel their organizations and their partners to the next level.

NOTE: I’ve included an excellent video from Arizona State University’s Carey School of Business regarding Supply Chain Integration.  I thought it was appropriate to include this as supplement to my partnership discussion above.

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Posted in Process Improvement, Supply Chain Partnerships, Supply Chain Thoughts

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