Supply Chain Management

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.

Let us understand this with an example. Take the case of Kitting that needs to be carried our for a certain product before it needs to be packed into a shipping carton. The cost associated with the kitting task would be labour cost, equipment cost, consumables used,and so on. This would all pile up to the cost that incurs to kit a finished product.

The WMS needs to provide capabilities to define such costs. Next, there needs to be a margin applied to each of these cost and also a overal margin over and above the total cost. This will define the profit that the warehouse will make when product comes out from this kitting process. The cost plus margin is then charged as customer who utilizes the kitting services of the warehouse.

There may be many such activities that can be defined within various warehousing transaction for which a customer can be charged for. Cost of other expenses can also be factored in like Pulley cost, Batteries, Labor unloading from Truck, Security Cost, Salaries of Labor, Cleaning Expenses and so on. These costs need to be associated with relevant warehousing transactions and need to be tracked as and when these transaction are being executed. These costs are accumulated over a period, say a week or month and billed to the customer, of course, with the margins added to each of them.

Next, we will delve into the other side of costs that can be defined and charged to the customer utilizing the space. This is known as storage based costing.
This can be defined as Storage Unit of Measure (UOM) based costing, Package UOM based and Fixed rental based costing. These are the three types of costing that can be defined, tracked, captured and billed to the customer.

In my next blog, we will delve much deeper on each of these storage based costing on how they need to be setup, with real situational examples. 
 

Posted by Lokmanya Rawat at 05:14 PM | Permalink | Comments (2) | TrackBacks (0)

 

The network quickly became complex as the nodes were either geographically dispersed or did not talk the same language as the other.  They used different tools for communication, were bound by a local legal structure and sometimes had divergent/adversarial/competitive positioning compared with other entities in the network. What came out of the mass fragmentation and dispersion was a complex supply chain structure dropping under its own weight no longer nimble as before.

Then came a phase of consolidation and tool revolution where the partners in the network started or seemed to start working towards a global objective of serving the customer - the only objective agreed upon or could have been agreed upon by all the entities in the network. Good sense prevailed and the common objective gave a common ground for innovation and service to the customers. So far so good.

However one aspect of supply chain that was not able to get due attention and focus was the service side of supply chain - the after-sales service. This is pertinent towards Hi-Tech supply chains in particular. As the customers become more demanding, the after-sales service model became increasingly complex requiring tracking and management at multiple service points. Supply chains  of today have become increasingly  more complicated on this reverse side of supply chain. 

Some of the broad challenges that Hi-Tech supply chains in particular are facing in the service side include
- Increasingly complex service models towards customers requiring guarantee schemes that are very difficult to price
- Due to miniaturization and complex designs, full part replacement has become popular but very expensive for supply chains
- Product Portfolio proliferation has led to maintenance of increasing pipeline inventory in terms of service parts
- Shortening Life-Cycles add even more complexity to service side business. Though laws require 7 years of service, as an example, the composition of the installed base of finished products is a dynamic target for planners to chase for planning service parts
- Aggressive selling in forward supply chains burdens the service supply chain, since this leads to consequent "freak" sales-returns
- Fragmentation in the forward supply chain leads to a huge complexity in the service supply chain, since the failure component needs to be replaced/repaired by coordination with a diverse set of component suppliers
- Forward supply chains have to absorb, adapt and adjust to the "regurgitation" levels in the supply chain to come up with a better evolved forward business models

This has made the supply chains of today non-linear in nature and very different from what we understood conventionally. There are entities in supply chain that are becoming core-competent in service side playing sometimes equal role as the forward side entities. All of the above has created a market opportunity for software product vendors to come up with appropriate tools to address this service side of supply chain. The marketplace of today have forced businesses to evolve from a point offering positioning to a an end-to-end offering positioning.

Times of today and future will be very interesting for service side supply chains.

Well, on a philosophical note, selling an offering to a customer is a lot like being accepted for a marriage proposal.  As one wise old man said - all marriages are happy. It's the living together afterward that causes all the trouble !

Posted by K. Srinivas at 08:21 PM | Permalink | Comments (2) | TrackBacks (0)

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”.

Often used to describe the road-map journey of an e-Procurement program, these three words (or correctly put, phases) represent in simple terms the crux of what needs to be done. e-Procurement transformation leaders aim to build the foundation by automating manual procurement processes there-by eliminating manual buying and moving towards electronic transactions. They focus next on integrating the planning and execution systems to move initially towards contract compliance and eventually towards an Analyze-to-Source (or Source-to-Analyze) closed loop mechanism. And finally, they aim to not just reap the obvious benefits of their investments incurred in the first two phases but Extend it by generating a self-sustaining “benefits momentum” via enhanced supplier collaboration, design/engineering collaboration, opportunity analysis, cost analysis, supply risks assessment and governance and control.  

While the ROI is seen in all the three phases, it is usually in the “Integrate” and “Extend” phase that the initial drizzle has the potential to turn into a down-pour. And key to the benefits down-pour is a 360 degree enterprise wide Spend Analytics initiative. A recently published white-paper, Managing Costs by Leveraging Procurement Information Intelligently, offers a comprehensive yet refreshing look at achieving this 360 degree view of an organization’s cost structures via an ‘inside-out’ and ‘outside-in’ approach. “To overcome cost management challenges it would be imperative to get comprehensive knowledge about enterprise dollar outflows and the available opportunities (internal or external driven) to control it” says the paper. This statement couldn’t be more true today when the down-turn is causing the CPO to find innovative ways to reduce cost. So much so, that the mantra, Automate, Integrate and Extend, has right-fully given way to “Automate, Integrate and Exploit”. It is time to look “inside”, to review the investments made, to open up those flashy business-case with promised savings to make sure that those investments are truly exploited

Posted by Amit Tambi at 09:08 AM | Permalink | Comments (0) | TrackBacks (0)

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.

1.       Operations managers across supply chain typically operate in silos. Although they are extremely well versed with their functional area, their understanding of how their function will impact the entire supply chain is often missing. They are not to be blamed for this, as they were never required to develop that view. This is the first major obstacle in implementing SCRM program. Developing a holistic view of multiple supply chains within the organization and how each function knits, is the first and foremost requirement.

2.       My first reason could be wrong as I have come across Operations Managers, who are in effect, are supply chain managers in all aspects but the designation. The holistic understanding of supply chains is a hygiene factor, but that’s not enough. Ability to assess and quantify risk scenarios is of vital importance. Quantification uses anything from gut feeling to experienced speculation – and not always scientific tools and techniques. Organization needs to invest into researching and designing methodology to assess risk across all supply chain functions and processes.

3.       Supply Chain Risk Management is in a nascent stage. Early adopters have developed in-house solutions to enable few processes. However, enterprise-wide SCRM solution remains a white space. Such a solution can contain simulation capabilities to aid business users in making informed decisions in context of Supply Chain Risk. It could also contain integrated view of supply chain processes and how, mitigation strategy employed in one area could benefit the entire supply chain. It should provide dash-board capabilities where the Supply Chain Owner could monitor on day-to-day basis, how much risk he/she is posed with.

While such tools are under evolution, one need not sit idle. Supply Chain Risk Management starts from - bringing the change in mind-set which by itself is a herculean task. Enabling “risk-conscious decision making” approach is the next step and that can aided by a plethora of research done by academicians. Supply Chain Operators can be equipped with simple excel tools to assess and report Value at Risk (VaR) on periodic basis – starting on a monthly basis and reducing the frequency as the process reaches the desired maturity level. The assumptions for the assessment should be well documented and reviewed monthly by monitoring council within each function. The same exercise needs to be repeated at organizational level with key stakeholders such as marketing/sales, finance and operations/supply chain functions being involved. Early adopters should leverage this opportunity for creating awareness to shareholders about the best practice for gaining their confidence.

Posted by Mitul Shah at 10:34 AM | Permalink | Comments (1) | TrackBacks (0)

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?

Posted by Sharad Elhence at 07:24 AM | Permalink | Comments (1) | TrackBacks (0)

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.

Summed up eloquently by David as the Five “I’s” the five capabilities that would make for a great personal productivity software also can be extended to become the critical capabilities of an ideal supply chain visibility and control solution:

Interception: The solution must be configurable for line managers to place process sensing “listeners” that actively seek process deviation. For example a fulfillment manager might place a “listener” to intercept any delays in picking an express parcel due to labor shortage in the warehouse. An elegant solution would have an easy to navigate visual modeler that can be quickly configured by business managers and process owners.

Interpretation: A signal becomes a message only when it is correctly interpreted. The visual representation capability of the solution must allow the managers to quickly deduce the impact of the event intercepted by the “listener”. For example the alert from delayed express shipment should not only trigger alert to the fulfillment manager but also display if any linked shipments to the customer need to be rescheduled or expedited. This can be specifically useful if the express shipment was a part of customer’s scheduled plan for a critical project and it needs appropriate communication and resolution.

Investigation: A supply chain event cockpit would provide the manager a single control dashboard to not only monitor and interpret the critical events across the supply chain but also to quickly access other required information to take the corrective action. This goes beyond the plain vanilla BI offerings and should have “what-if” scenario generation capabilities to help manager quickly decide the best solution to get out of the soup.

Integration: Once the manager is through with the interpretation and investigation, the application must go beyond being the visual dashboard and analytical tool. Capability to trigger changes in other applications or start workflow do seem surreal like a Star Trek pilot control board, but with companies on their way towards SOA enablement and  a robust portal strategy, this capability would certainly deliver the maximum bang for the buck.

Implementation:  There are many products in the market that promise the proverbial manna of complete supply chain visibility but not many are easy to implement and integrate with existing applications. An ideal solution should cause minimal disruption to existing processes and infrastructure and act as an “ether” layer on top of other applications.

Now where do I start looking for such solutions?

Posted by Amarpal Sanghera at 05:14 AM | Permalink | Comments (2) | TrackBacks (0)

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).

 

Inducing the customers to part with their money would be the first part of the course of action. This could be via any number of variants of the currently much-maligned “enjoy now, pay later” model or something more innovative – what about pay-per-use for a finished good – akin to the rental businesses, even for B2B? At the supplier side, there may be greater focus on contract management - terms & conditions would get rewritten, supplier rationalization could trigger a wave of consolidation across commodity or geographic lines and contract compliance projects could get a second look. However, in these times, I feel that more than the sell-side and the buy-side supply chains, there would be renewed focus on the delivery vehicle as well. Of late, we’ve seen a spurt in requests on viewpoints around WMS consolidation (my colleagues Sat, Girish & I had written a paper also on this available in the white paper section http://www.infosys.com/supply-chain/white-papers/WMS-consolidation.pdf ), Multi-channel commerce initiatives, transportation optimization, inventory sync and so on.

 

The reason that here at Infosys we haven’t see a whole lot of slowdown in SCM domain could be that SCM is core to the business and hence is not considered a cost centre – not anymore anyway. Even functions like procurement, in lean times like this, can look at self-funded projects which should be able to feedback savings from quick hit initiatives back into more significant ones. The tie-in to a business case would become a whole lot more rigid, but SCM would be swinging ahead anyway, even in times like these.

Posted by Gopikrishnan GR at 01:15 PM | Permalink | Comments (0) | TrackBacks (0)

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?

A dipstick survey of most retailers’ online stores reveal an attempt to get the customer quickly to the merchandise, help them to easily choose, to easily get better views of the goods, and then to help them checkout faster. Check out any retail site and the pattern is: Search of items, add to cart, (add more to cart), proceed to checkout, login/register/continue unregistered, address details, payment details, (attempts to cross sell and up sell), order confirm, thank you screen.

Customer experience is enhanced in some cases by making this process non linear, where the customer is allowed to do things in any order and the ability to hop between steps. Some sites let you edit the cart from any page, some sites show you the cart contents at all times, some show the order total. Sites strive for efficiency and many do achieve that objective. The experience is further enhanced by achieving true multi channel visibility, allowing customers visibility to inventory in their local stores, allowing them to reserve and pick up. This still does not get into warm fuzzy feeling territory.

So the question I have is how does a site make me feel nice about the shopping experience. Is being efficient good enough? While working with a few large retailers recently, I could not figure out an answer to this question. In your experience, what have you seen retailers do in this space? If we think efficiency and convenience is all there is to it as far as the online experience goes, then that is not really a differentiator, because every good retailer is already there or will get there soon. So how do retailers give customers a nice feeling online? Does this matter at all, or will this be the next evolution for online retailing?

Posted by Chandradeep Bandyopadhyay at 06:32 PM | Permalink | Comments (0) | TrackBacks (0)

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.

Recently, the Supply Chain Council chartered a team to research the best way to approach risk management in the supply chain. The team found four key components of successful risk management programs:
•a comprehensive, formal risk management approach;
•clear, structured identification and quantification of risks;
•coordination of risk management throughout the organization and across supply chain partners;
•and effective conversion of mitigation strategies into operational reality.
Across these four elements, the team found the Supply Chain Operations Reference (SCOR) model to be an excellent framework for structuring, communicating, and executing a supply chain risk management program. Using SCOR ensures the risk management program achieves real business results.
SCOR provides a structure that allows managers to overcome some of the common pitfalls in implementing risk management programs. Using the SCOR model forces a comprehensive view of the supply chain and, therefore, a comprehensive risk assessment. SCOR also adds structure to risk programs, which focuses effort and supports effective prioritization of risks.
The core of a SCOR-based risk management program is a common metric for quantifying risks so they can be prioritized according to their potential impact on operations. To do this, SCOR uses Value at Risk or VAR. VAR measures risk in terms of the probability of the event occurring and the financial impact to the supply chain if the event does occur.
For example, if a distribution center is located in an area that has a ten per cent probability of experiencing a hurricane, and a hurricane strike would disrupt the supply chain resulting in $1,000,000 in costs and lost sales, then the VAR for this one event is $1,000,000 * 10% or $100,000. In reality, this measurement would be a continuous curve ranging from the probability and impact of a storm that disrupts power supply for an hour to a direct strike from a category five hurricane that disrupts operations for weeks.
The power of VAR is the ability to put all risks—adverse weather, labor disputes, equipment failure, etc.—into common terms for comparison and prioritization. VAR also takes risk out of supply chain terms of late shipments and stock shortages into terms that make CEOs and CFOs take notice: financial impact. This also, in turn, makes it easier to allocate resources to mitigation programs because a clear return on investment can be calculated. VAR also supports collaborative efforts with supply chain partners. With risk in financial terms, companies have a foundation for cost or profit sharing arrangements that reduce risks across the supply chain.
Supply chain managers are increasingly being asked to take a more comprehensive view of supply chain success and sustainability. To accomplish this, managers must broaden their perspectives of efficiency and effectiveness to include the environmental and social impacts of operations and the impact of disruptions in the supply chain. A well structured, comprehensive risk management program is a critical component of a sustainability strategy.

Posted by Taylor Wilkerson at 08:17 AM | Permalink | Comments (0) | TrackBacks (0)

After doing a deep-dive into the procurement professional’s role in green supply chains in my previous post, I cannot resist but take a step “up” to offer my view on whether Green supply chains are here to stay

I have come across several voices, discussions, posts and opinions that speak about the “falseness” of this entire green movement. That companies are resorting to green initiatives not because of their new found love for environment but instead, are suavely marketing their cost cutting initiatives under a green cloak to win some social brownie points. Compounding this situation is the fact that some companies are blatantly misleading the public on their green campaigns (Terrachoice, an environmental marketing agency, in a survey on green claims of six category leading big-box stores reviewed 1018 products and found all, except one, making a claim that mislead audiences).

While I agree with the above views, here is my take on the way I see this green movement unfolding. The increase in oil, energy and commodity prices coupled with tight regulations paved the way for companies to adopt the “first wave” of green supply chain initiatives. The first wave that saw companies acting on the “low-hanging fruit” – reducing packaging and transportation cost. This wave is certainly questionable. Was green thinking driving these benefits or was it clever marketing? But the “second wave”, which incorporates green thinking into each and every supply chain function, will be propelled predominantly by heightened customer awareness and buying patterns. And once that rolls-in, companies will have no choice but to integrate environment thinking in their supply chains.

I saw a preview of this scene in my apartment complex. A recent awareness campaign on global warming and environment sustainability measures led to several apartment folks touting their green strides. This small awareness campaign catapulted to such a crescendo that a person today would rather be caught speeding in the apartment campus than with a plastic bag in his hand. As a result, majority of the mom-and-pop retailers in the vicinity have switched over to paper bags or at-least provide that as an option. How long would it be before the consumer starts demanding green products? While I may be over-imagining here, a recent McKinsey report talks about the need for businesses to make consumers walk the green talk. To quote “businesses should play a leading role in the green movement in order to shape their market opportunities and manage potential regulation of their industries”. If this were to happen, we could see companies doing a lot more (and more devoutly) in making their supply chains green and customers responding in tandem to buy more green products. The result - not a vicious cycle but instead a sustainable cycle!!

I do acknowledge though that a recessionary economy, which causes priorities to change overnight, can lengthen the time it will take for this sustainable cycle to pick up momentum. But considering that the green seeds are sown and are germinating well, the cycle has indeed started. As the economy trudges along and the impact of global warming increases, I foresee the cycle picking up speed. To wrap-up, I do see that Green supply chains are here to stay and that companies will be compelled, sooner than later, to invest in greening their supply chains

Posted by Amit Tambi at 08:42 AM | Permalink | Comments (1) | TrackBacks (0)

In my last blog, I shared my point of view about the importance of contracts during the “R” times. Now I would like to share my thoughts on the challenges in leveraging contract management and best practices in contracts management.

One of the major challenges is that Organization’s contracting principles are sketched around the package they use and not with respect to the way they would like to do their business. Late 90s and early 2000 is when organization started to invest on Contract Life cycle management packages / tools. This definitely provided a host of tangible business benefits to the end users and also to the buying organization. But, very soon, companies (esp. in Retail and Manufacturing) realized that the package is not flexible enough to manage the growing business needs such as Globalization, changes in business processes like invoicing against contracts etc.

 

Addressing these challenges has always posed multiple challenges. But like all other packages, Contract Life cycle management packages too will go through enhancements and upgrades. Creating a layer of best practices and plug-ins can definitely help. Some of other challenges include

• Lack of collaboration internally as well as externally,
• Absence of clear metrics and measurements of contract values and compliance,
• Penalties for non-compliance unknown,
• Lack of tools to track and manage contracts
• And finally poor implementation due to poor articulation of user requirements and organization TCM – Transition Change Management aspects not addressed.

Best practices suggest that before investing on any contract management solutions;

• Create a compelling business case by auditing internal contract management processes, systems, and controls. This will ensure there is no inflexibility in the system.
• From the implementation perspective, a typical package implementation methodology needs to be followed.

Some of the other best practices are:

• Central Repository to store all the contracts and all authorized parties should have access to the past and the current contractual information.
• All sub-agreements should roll up to the parent agreement like Item level to Commodity level to Supplier level and Department to Company to Regional org to the HQ.
• Template based contract creation ensures that the appropriate clauses, terms and conditions are used. Item based, service based, geo based... Templates can streamline contracting cycle time, minimize risk, and maximize compliance.
• Event driven notification and alerts on contracts is the latest trend adoption and use of clause library to reduce lead time and reduce risks.

Finally while running the business by measuring program performance and results, look at the areas of improvement to keep the business evolving.

 

Posted by Raj Rajendran at 10:02 AM | Permalink | Comments (0) | TrackBacks (0)

In this dynamic and challenging global environment termed also as “Recession”, I read a series of blogs

• on ways to manage recession,
• worst innovations mistakes in recession,
• Is re-negotiating during these tough times ethical?
• “R” word can be a boom to sourcing and procurement world etc (http://www.supplyexcellence.com/blog/2008/10/30/renegotiate-contracts-recession/, http://blog.sourcinginnovation.com/2008/02/25/the-10-worst-innovation-mistakes-in-a-recession.aspx)

The “R” word is probably not a welcome term for sourcing and procurement world – buyer as well as supplier, but it will definitely help in restructuring most of the processes. Contracts Management (with sourcing on the left side) plays a vital role in achieving this – Compliance, Collaboration, Commitment etc

To start with, you will have to focus on COMPLIANCE to make sure that you are not getting overcharged and   not overpaying. To achieve this, organizations will have to move towards reducing their maverick spends.  Contracts will help in achieving this goal. Leveraging contracts during the “R” period will benefit both buying as well as selling party meet their commitment.

Second measure is to COLLABORATE and be transparent with internal buying community as well as external suppliers. In one of my blog comments (http://blog.procurementleaders.com/procurement-blog/2008/7/21/suppliers-strike-back-as-big-boys-stick-boot-in.html), I had talked about having tiered payment terms as an option in difficult times and this can be achieved purely with transparency and collaboration. Contracts play a very important role in managing this.

Apart from compliance, collaboration and commitment - globalization, re-sourcing, re-negotiation and innovation will continue to be the focus areas in procurement world and Contracts can help these initiatives see light. I was reading on one of the focus or theme of Emptoris Empower 2008 Conference – “forward thinkers driving greater results in supply and contract management”. The timing is just right and organizations trying to fight against the recession are all forward thinkers.

Posted by Raj Rajendran at 09:56 AM | Permalink | Comments (1) | TrackBacks (0)

……..Looks like we are reaching the saturation level in designing a Supplier relationship management system that can milk the supplier to the extent possible, thats what the enterprise expects the buy side to have on the top of their mind rather than looking at the bigger picture.

It’s a realm for the buy side to have it their way. Let’s listen to a small story.

Customers often ask me this very simple question, and trust me its intimidating at times
“Can we really make an SRM solution like Amazon or eBay”, a solution that doesn’t really need to be that complicated, easily configurable, highly intuitive”, is it that difficult for SRM (Supplier Relationship Management) product vendors to vend out mint fresh, rather than following a grandfather approach. They show me a reverse auction powered by the www , so simple and robust, that am speechless. But I have to explain to them what’s more to SRM from the broader perspective…
 
But the question is
- Why are they comparing?
- Why is the customer still craving for more?
- What are they comparing?
and then the Million dollar question
- What’s more to the story than just auctions and bidding?

To give them the magnitude of an effective SRM solution, we emphasize on the latter being an end to end system that provides them with the Supplier Intelligence through an enterprise-wide, integrated view of a company’s relationships with its suppliers and the commodities or services they provide.
Enabling them collect, analyze and leverage all aspects of their supplier data and purchasing history, giving them that vital insight into their supply base and purchasing history.
Then I go down a level below trying to explain how product vendors have grown beyond standalone ERP solutions and emerged into B2B, trying to get the best out of the internet, its dynamics of enablement, managing relationships electronically and eliminating paper.
The recurring Gartner Quadrant shouts out loud on what’s cooking, where customers should actually be looking, for best of breed bundled over their core applications.
But with the hard hitting IT budget cuts, the Product vendors need to prove to existing and new customers in a Rapid Prototyping mode
Customers have no more patience left, they are confused beyond hope, they are no more flaunted with flashy demo’s or workshops..
 
…….they are looking for a real solution that can be a mash up of “The real enterprise wide solution in its magnitude with a down to earth ease of use”
It’s for us to wait and watch whether its SaaS, homegrown ERP, or the traditional B2B solution providers that will emerge market leaders in the SRM space. Lets see who wins the rat race and gulps the market share "bottom's up"

Whatever it is, it has to be real!!!!!
- Tridip

Posted by Tridip Chakraborthy at 12:58 AM | Permalink | Comments (4) | TrackBacks (0)