You ordered a product online and it gets delivered to you by end of day. Surprised!! But you would simply say WOW!!! We as consumers would feel delighted, lot more excited and confident about e-shopping.In US many retailers have started experimenting with same day delivery option. Few such examples are: Google is inviting its employees in the Santa Monica area to try out its Google Shopping Express service for same day delivery pilots. Walmart exploring same day delivery option for fulfilling their online orders from physical stores. E-bay launched a similar program with shoppers who spend more than $25 at local store can pay additional $5 for same day delivery. Amazon getting closer to reduce delivery lead time with their patented 'speculative shipping' model. This blog articulates about how e-retailers can get closer to same day delivery.
Preventive Maintenance? - The spine of maintenance philosophy, we all do it, don't we?
Predictive Maintenance? - hmm..gadgets, graphs, analysis etc. heard it's expensive, very expensive, we don't even go near to it!
Reliability Centered Maintenance? - Strategy, an engineering framework, failure mode analysis maybe..phew! Which fancy maintenance book are you reading these days by the way?
You might be wondering what is this all about, right? So let me tell you, this is an extract of conversation which I was having with one of my good friends, a Manager at the equipment bank of a leading construction company. Some candid responses which appeared contradictory to what I was thinking about the latest maintenance practices being followed in leading industries. Now what makes these evolving practices such as predictive maintenance and RCM dreadful names? Why is there an inhibition in leaping the boundaries and looking beyond practices such as corrective and preventive maintenance?
The companies today need a Warehouse Management System (WMS) that can be implemented quickly, configured easily and which is cost effective. Well imagine that you get a WMS solution and various functionality as and when it is required for business. This implies - speedy implementation with no costly Upgrades! This blog explain into the benefits of new evolution in WMS adaptability i.e. WMS Apps which can help grow business by having immediate performance gains.
Safety is an important aspect of Work and Asset Management (WAM) process. The Safety standards form an important evaluation criterion for Work and adherence to the safety norms are scrutinized thoroughly. For industries like Oil & Gas, Nuclear, Aerospace, Energy and Utilities etc. dealing with high risk Assets, safety is a critical factor and a mandate to follow. So if we already have such a high standard and even a higher scrutiny, why do we keep hearing about safety related incidents? The reason here could be a missing link of control, accountability and information exchange between the Safety and WAM function. Now why do we say that? Here's why..
Within Infosys, we have a renewed focus on Energy Industry which primarily involves Oil & Gas companies for us. For some time, we have been working on finding out key trends and defining strategies for next level of growth for us in this area.
Asset Management being my key research area, I took a holistic approach and reached out to many of our project teams working for Oil & Gas clients, colleagues and researcher in this area. The result was not something new and I guess majority of these trends are often seen in Asset Intensive industries. However, some trends certainly have critical importance for Oil & Gas industry.
I am back again in Vegas for IBM Pulse 2013. Last year, I covered the event live with daily blogs, but this time my whole schedule was so packed that I hardly had any time to write. Hence summarizing the whole event in one blog.
One of the biggest challenges for an enterprise today is to constantly upgrade and optimize their IT infrastructure to cope up with the fast growing technology and never ending business demands. As the IT consumers have to transform their heavily customized old school enterprise applications to a standard technology platform, the Enterprise application developers and the Companies are having a stand of between customized application and a configurable solution.
It is generally recommended that you plan critical products and components in SAP APO [or an APS system] and non-critical products and components in SAP ECC [or the respective OLTP system]. The critical products have some typical characteristics that can be used as guidelines to identify them: long replenishment lead times, usage in multiple Upper Level parts and A-Class products [based on ABC Classification that I had discussed in my earlier blog]. The non-critical parts are planned in ECC with the assumption that the planning for these parts does not need advanced algorithms and the parts can be procured easily and quickly on a need basis.
However this consideration misses one critical aspect - the Supply Planning Organization Structure. The above recommendation works generally well where we have planners that are dedicated to plan just these non-critical components. However, we have seen in multiple clients that the Planners are responsible for planning the entire Product Family across all the levels of the BOM for both the critical and non-critical parts. The planning done for non-critical parts in ECC requires the planners to access not only multiple transactions, but also multiple systems and then execute on the system proposals. Also, with increasingly shorter lifecycles for the components, it is getting increasingly important in the High-Tech industry to plan the components considering substitutes, before placing a buy signal to the Suppliers. We have seen that due to these reasons, the planners prefer to have both the critical and the non-critical parts being planned in APO and the proposals presented to them in a consistent manner for them to make decisions.
GREEN SUPPLY CHAIN MANAGEMENT (GSCM)
What is Green Supply Chain Management: Green Supply Chain Management is all about delivering products and services from suppliers, manufacturers to end customers through material flow, information flow and cash flow in the context of environment. Traditional Supply Chain Management focuses on Total Quality, optimum Cost and best service which in some way contributed to environment. Today's Green Supply chain management mandates to incorporate the environmental idea in each and every stage of the product and service in a Supply Chain. Hence Supply chain managers have a great role in developing innovative environmental technologies to tackle the problems faced by the economy on environmental problems and communicate this to every stake holder in the chain. Lean Manufacturing is eliminating waste in every stage of supply chain. It focuses on producing economically and environmentally friendly quality products which meets the customer expectation. It is the best practice to be followed since it reduces inventory, saves space and energy. Hence Lean manufacturing contributes to the Green environment. EPI is to measure the effectiveness of environmental performances of a country. This measure provides the details on how close the countries can establish environmental friendly policies and procedures.
Guest Post by
Bob Ferrari, the Founder and Executive Editor of the Supply Chain Matters Blog, and a periodic guest blogger on the Infosys Supply Chain Management blog.
As was the case last year, the 2012 holiday buying season will be very much about the continued leveraging power of consumers in exercising multi-channel buying preferences and technology-enabled online tools. An equally important test as we swing into the 2012 surge will be how online, brick and mortar retailers, along with their respective direct ship suppliers, exercise capabilities in multi-location stocking and fulfillment capability. From this author's lens, expect the 2012 holiday buying surge to yet another stress test for managing fulfillment complexity among online, retail and B2C goods providers.
Guest Post by
Rajeev Ranjan, Global Practice Head, Oracle Practice in Manufacturing Vertical, Infosys Limited
Infosys, a named Diamond sponsor, will have a major presence and will premiere its Oracle specific service and technology offerings. One of these capabilities is termed Demand to Deliver (D2D) which has been initially tailored to address supply chain business process and information technology challenges within the high tech and consumer electronics industry. I recently had the opportunity to be interviewed specifically regarding packaged D2D capabilities by Bob Ferrari, the executive editor of Supply Chain Matters blog.
My job as a heavy equipment engineer saw a transition phase marking a shift in the organization from a pure manual maintenance approach to a Computer based Maintenance Management System (CMMS). The growing popularity of CMMS at that time and the organization's experience in ERP for managing its steel manufacturing were enough reason for the management to think on investing in a system to streamline their Maintenance operation in their Heavy Equipment division. To start with, the SMEs were required to identify the must have features in their respective areas. This listed feature was also referred to as the "Wish list". This helped the management to make a decision on procuring the right system fitting the bill. The business case presented to the Management was that of a "Revolution" which was going to transform the mundane Maintenance process. But did this really happen?
It is still early days in India for the 'Online Retailing' industry. Right now the industry is fragmented as there are many players in this space. Hence there is a stiff competition among the players. One of the ways by which E-Retailers are attracting people to buy on the net is by offering 'Cash on Delivery' (CoD) payment option. This is helping them overcome the reluctance of customers to shop on internet. This payment option tries to overcome the trust barrier which prevents customers to shop on internet.
Warehouses of today are facing increasing challenges in their picking operations. On one hand, they are required to support the growing e-Commerce sales where picking happens by unit (individual item or each picking). On the other, they continue to support existing store operations, where items have to be handled either in eaches or cases. Also, they are now forced to strike the right balance between the high-order-volumes-and-less-order-lines scenario of the e-comm world and less-order-volumes-and-high-order-lines scenario of stores.
Guest Post by Bob Ferrari
Bob Ferrari is the Executive Editor of the Supply Chain Matters Blog, and a periodic guest blogger on the Infosys Supply Chain Management blog.
In an Infosys Supply Chain Management guest commentary in March, I commented on the fundamental reinvention that is underway in the retail industry, which comes with significant implications to current and future supply chain organizational, process and information technology capabilities and investments. Online sales have been growing at double-digit rates and the implications profoundly point to the reality that consumers prefer online tools and have shifted their shopping and buying preferences. The "Clicks and Bricks" business model is rapidly unfolding as retailers counter the juggernaut of online retailers such as Amazon. Online providers are disrupting the retail industry because of innovation, in the true spirit of the Clayton M. Christensen book, The Innovators Dilemma.
I recently came across an interesting write-up from consultancy firm, Arthur D Little, on how a few Oil majors have re-structured their E&P ops by combining three divisions - Projects, Technology and Procurement (PTP). Calling for the emergence of a new organizational form, the paper highlights how today's battles' - increasing size and complexity of oil projects with a majority of them going over budget and exceeding schedule targets; skills shortage; and resistance to new technology adoption - can be countered by dissolving a few internal walls. The challenges gripping the industry can be effectively tackled by "...integration of all relevant Projects (including Drilling), Technology (including R&D) and Procurement units into one single, integrated global division which is then tasked with the full burden of delivery".
Last month, we were discussing our new Maximo Utilities Amplifier Solution with Ralph Rio, Research Director, ARC Advisory Group (http://www.arcweb.com/analysts/pages/ralph-rio.aspx). This Amplifier solution would help Electric Utilities clients in better realization of their work management goals in the area of Capital works, Budgeting, Work Scheduling, Regulatory compliance and Customer Self Service. It also brings in the much required process automation and adherence, thereby ensuring a robust process adherence and control mechanism.
When a colleague forwarded the news of SAP (finally) buying Ariba past midnight India time on Wednesday (http://www.bloomberg.com/news/2012-05-22/sap-agrees-to-buy-ariba.html ), my first response
was roughly on the lines of "better late to the dance than allow Oracle to steal your partner". That said, the "Ariba on the bid block" has been now a since-2006 story ever since Oracle kicked up some serious acquisition dust during the Peoplesoft, JD Edwards, Siebel years. With IBM acquiring Emptoris and folding it into the Smarter Commerce theme, all eyes in the procurement world was on Ariba.
Over the past few years, I've watched Ariba's stunning repositioning as a serious on-demand player (yes, cloud hadn't become so fashionanble in 2007-08) with a lot of admiration, though as an SI, this meant a steadily eroding revenue pie. I've always felt that this was one good management case study of charting out a strategy and staying true to it, in spite of quarter-on-quarter setbacks.
Emerging business needs and stiff competition are forcing organizations to rethink on the business strategies, often requiring them to identify avenues for improvements and leading them towards what is known as "Transformation". Various reasons for a business transformation would include smart ways of working, effective information sharing, continuous improvement in the operation model, availability of vital information for better decision making etc. These forms key contributors to an effective transformation exercise. For any such program to be successful, it is important that the key contributors are identified and implemented effectively, but how often are we sure of completely meeting our transformation objectives? The answer is, rarely! What did we miss then? Was there a flaw in charting out the transformation ideologies? Or did we lose the business context while implementing the transformation program?
Joint Post by
Gopi Krishnan GR, Practice Manager - Business Application and Services, Retail CPG, Logistics and Life Sciences, Infosys
Arun Kumar, Principal Consultant - Business Application and Services, Retail CPG, Logistics and Life Sciences, Infosys
In part 1 of this interview blog series with Supply Chain Matters, we have already analyzed the readiness of both IT and supply chain functional industries for the need to go for broader visibility, more timely and accurate decision-making, and predictive process capabilities which are more frequently expressed in the context of supply chain control tower (SCCT) capabilities.
In part 2 we have shared our views on the mode of expression of SCCT and our view for the best approach for adopting SCCT. Please read part 2 here.
Joint Post by
Gopi Krishnan GR, Practice Manager - Business Application and Services, Retail CPG, Logistics and Life Sciences, Infosys
Arun Kumar, Principal Consultant - Business Application and Services, Retail CPG, Logistics and Life Sciences, Infosys
With the current scenario of rapidly increasing base of business in terms of geography, customer base, varied suppliers and voracious line of products, the complexity of the global supply chain is becoming more difficult to manage.
In lieu of this, modern organizations are spending a lot to re-define the needs for broader visibility, more timely and accurate decision-making, and predictive process capabilities in their supply chain methods. These needs are more frequently expressed in the context of supply chain control tower (SCCT) capabilities.
We have expressed our views in an interview with Supply Chain Matters and posted it as a 2 part blog series on "Supply Chain Control Towers Readiness". In part 1, we have analyzed the rationale for SCCT in the IT industry as well as supply chain functional areas; and whether the readiness is coming from specific industry sectors. Please read Part 1 here.
During last couple of weeks, I had some discussions with few of my colleagues from our Utility practice. The reason for discussion was an Asset Management consulting assignment where these folks were helping a utility company to define asset management strategies for them.
This client of ours does not have a centralized asset centric repository and information is scattered in multiple applications - leading to substandard processes, data duplication and inconsistent data - to name few of the problems. So, this team's focus is to suggest best practices for Asset Management which may ultimately lead to selecting an enterprise package for managing their assets.
Guest Post by
Bob Ferrari, the Executive Editor of the Supply Chain Matters Blog, and a periodic guest blogger on the Infosys Supply Chain Management blog.
The Economist featured an article in its February 25th print edition with the title: Clicks and Bricks. The gist of this article is one that many business and industry analysts have been frequently dwelling upon, namely that retailers are feverishly trying to reinvent themselves for this rapidly changing new age of online shopping and multi-enterprise commerce. The stark message delivered by the Economist was: "To build a profitable online business, retailers must integrate it seamlessly with the bricks-and-mortar operations. Many keep them separate, increasing the risk that they fail to communicate or work together properly".
Woke up with a nice sunrise view as seen from my hotel (Tropicana Las Vegas) window. Had to skip the general session for some unavoidable reasons. Heard from other folks that it was quite interesting which was more on gaining visibility, control and automation to enable Business without limits.
I am back again in Vegas for IBM Pulse 2012. Though I have attended all Pulse events since its inception in 2008 (last year I gave it a miss), it still looks new every year. Probably every time a new interesting theme from IBM makes it worth attending. Also, the horizon of the event is increasing every year, which makes it more exciting. This year, 7000+ people are scheduled to attend this event.
In some of my recent conversations with clients and colleagues, while discussing asset management, we also discussed "green" which was little unusual some time ago in EAM context, but not any longer.
Enterprise-wide supply chain transformations begin with a clear articulation of business objectives that the program is expected to achieve. They expand into an analysis of revenue-accruing & cost-optimizing functions, and result in the identification of capabilities that the organization aspires to develop or enhance. Distillation of such capabilities leads to the establishment of the right solution set (package or custom solution) through an evaluation of alternatives. Finally, a phased roadmap is laid out that sequences the timelines and roll-out of identified solutions. After spending nearly a year to narrow down the roadmap and solution set, the execution phase begins with the actual implementation and roll-out of the identified solutions in a phased manner. This structured approach has been followed for a long time with very good results. And when results turn out not so good, 'execution' gets blamed.
Supply Chain Agility represents how fast a supply chain responds to the changes in environment, customer preferences, competitive forces etc. It doesn't talk about random variations in executing day-to-day supply chain operations. It rather specifies how a company's supply chain responds to changes, once business is aware of external changes which can negatively/positively affect the business in achieving its objectives. It is a measure of how companies adapt their supply chain to these changes and then how fast it is able to achieve it.
Supply Chain Agility comes with a cost and sometimes that cost might be huge enough to turn down the profitability. Companies have to decide how much agile the business has to be and where in the value chain they need agility and whether it fits in well with overall strategy of the company.
Guest Post by
Bob Ferrari, the Founder and Executive Editor of the Supply Chain Matters Blog, and a periodic guest blogger on the Infosys Supply Chain Management blog.
In late November Supply Chain Matters penned a guest commentary on the Infosys Supply Chain Management blog that outlined our belief that retailers should anticipate different supply chain fulfillment capabilities for the upcoming 2011 holiday buying season. Because of the reality of a rather challenging year of supply chain disruptions in 2011, we warned on the possibility of retailers not having the most popular and desired products the consumer wanted because suppliers would fall short of meeting holiday demand spikes. We further noted that the upcoming 2011 holiday buying season would once again drive home the premise that MCO and responsive supply chain inventory management are often the best complement to effective multi-channel and online commerce plans.
Guest Post By
Bob Ferrari, Executive Editor, Supply Chain Matters blog
Just about a year ago,I penned a guest posting on the Infosys Supply Chain Management blog that commented on the pending 2010 holiday buying season and how consumers would test retailer multi-channel operations (MCO) and synchronization. In our commentary, we cited three trends that would manifest themselves in 2010, namely.
1.Far more value-oriented shoppers would embrace just-in-time shopping techniques, balancing perceived best price with product availability.
2.A more empowered consumer who would gain the information advantage by deeper utilization of online shopping and research tools.
3.The state of product demand planning and inventory management among retailers becoming more advanced.
Yesterday, I, along with a couple of my team members, had the opportunity to present the progress on our Distributed Order Management (DOM) solution to Kris, our Executive Co-Chairman (and CEO till last month). Kris's objective was to understand the solution innovation in what we have done - i.e, building a Reference Implementation on the foundations of Sterling Commerce's base DOM product offering.
This Reference Implementation has been our answer to clients increasing need to get onto the Multi-Channel Commerce (MCC) bandwagon. We've had some good successes of late focusing on the merits of starting off the blocks with a reference implementation in an agile-like manner (I use such terms carefully!) as against blue-sky sessions with a bunch of assorted business analysts and their managers with highly varying interest levels with the finished product looking nothing like what each person there had envisaged in his/her mind.
The focus was on setting parameters like product groups, customer groups, planning horizon and frequency.The next important question is how to effectively distribute supply amongst multiple demand channels during periods of constrained supply.
This is in continuation of my previous blog http://www.infosysblogs.com/supply-chain/enterprise_asset_management_it_asset_management/ on Role of EAM packages in Smart Grid.
This note of mine is focused on debate of ownership issues of Asset Register - where asset date to be kept - EAM system or GIS or both based on data classification.
Our two and a half year Supply Chain transformation journey with a leading CPG player in the industry is coming to a much anticipated eventful, yet a successful end. While the 7 rollouts of scale and scope of Global ATP project were crucial watershed moments in the program, the intervening period was completely marked by emotions such as surprise (at customers asking some feature bordering on the ridiculously "impossible"), suspense (when we were unsure of meeting seemingly challenging targets of volumes of work and tight deadlines), despair (when sometimes we discovered we were closing all doors to possible solutions to a business problem), hope (when tired minds in the project started looking at problem laterally giving glimmers of a solution) and exhilaration ( when we as a team miraculously came over a challenge that we surprised everyone with including ourselves). The mix of emotions that we as consultants went through was akin to a high-adrenalin Hollywood or a Bollywood blockbuster.
As we close in on the curtains for the program, let me share some thoughts and learnings that could make such programs have a better success rates in future
The market for cloud-based services is expected to reach nearly $150bn by 2014. Gartner expects that one-fifth of all businesses will own absolutely no IT assets by 2012.
Manufacturing companies around the world, with their inherent penchant for low IT budget, are paying much closer attention to cloud computing and its potential value to supply chain processes - from sourcing to after-sale service.
Supply Chain Management space is, according to me, the ideal breeding ground for cloud computing. Let's explore how and look at its impact on various facets of supply chain management in a manufacturing company. Let us also look at some of the pitfalls that should be avoided.
Now that that the impact of consolidation on people, process and technology in supply chain management has been analyzed,(refer my previous blog on this topic), the next area to focus on is role of consolidation of business architecture building blocks in supply chain execution.
A) Consolidation of Business Rules for effective Supply Chain Control
As supply chain organizations are becoming more and more global with greater customer focus, business functions and processes need to respond the changes appropriately. As a result of this business dynamicity, every day presents new challenges to the Enterprise Architect to maintain or improve supply chain effectiveness.
One of the key challenges among them is to provide better control by globalizing processes and technologies, but at the same time remaining flexible enough to accommodate local processes, language, compliance etc variations. This is not an easy task for Enterprise Architect since critical analysis of consolidated business rules, processes and governance is required to distribute them across the global and local boundaries.
This is continuation to my previous blog. In this blog we can see Reverse logistics and Packaging in detail, which can give quick results to the green vision.
What have you done after finishing Pepsi, Coke or Dominos? Yes, tossed the can/bottle/box into litter-box. You do not need it once the contents are over. At the same time you cannot have drink alone without can or bottle, or Pizza delivered without a box.
Long time back, when I was managing shop-floor operations, I was asked by a senior production manager from another company "Why do you give so much importance to green in your operations, whereas it is a marketing gimmick for many?" My answer to that was it has a marketing angle, cost saving potential and is a sustainable approach. Is it true? Yes, there was a time when green initiatives always used to fall in the tail end of organizational initatives' presentations . But now it is more likely found on the initial slides of such presentations.
Guest Post by
Bob Ferrari is the Executive Editor of the Supply Chain Matters Blog and Managing Director of the Ferrari Consulting and Research Group LLC. Bob is a guest contributor to the Infosys SCM blog.
This spring's supply chain conference season is drawing to a close and it has been a rather busy one. With the economy and optimism slightly improving in the U.S., conferences dedicated to supply chain came back in a resurgence during this first part of 2011.
It seems that the topic of supply chains, along with their capabilities, challenges and shortcomings contrasted to a continued era of business volatility has once and for all become a common theme for discussion and discourse. In this Infosys guest commentary, I will summarize what I found to be common themes and topics of discussion among supply chain and procurement professionals these past weeks.
Every marketer dreams of a manufacturing facility that is without any constraint. If marketing people had their way, they will expect all the products available "On Demand" whenever customer places order. However real life manufacturing does not work on such utopian considerations. Every manufacturing facility in the world, howsoever sophisticated it may be, has some constraints. Hence not all products can be made manufactured "On Demand". By extension few products have to be manufactured in Campaigns. By Campaign, I mean, manufacturing them at set frequency (Example - Once every quarter at scheduled date). Forecasted demand between campaigns is aggregated and campaign quantity decided accordingly. Campaign manufacturing is common practice across all types of manufacturing - Discrete, Repetitive and even Process manufacturing. This is because every technical asset has some sort of limitation and cannot manufacture everything "On Demand".
I am just back from attending the IBM event - Software Days at Dubai.
Infosys was one of the GOLD sponsors of the Event. Primarily meant to show case the Smarter Planet initiative, the event had a reasonably good participation from customers and partner community. Apart from the 8-9 partner's stalls, IBM had put up separate stalls to show-case their capabilities in various verticals like Government sectors (I found the smart city story from Rio de Janeiro quiet interesting- too good to believe! This can potentially take E-governance to the next level), Retail sector (Sterling Commerce et al) and Natural resources.
Consolidation in Supply Chain Management: The Focal Point of Chain Effectiveness
I don't wear spectacles, but I do understand the pain my friends and colleagues undergo because of incorrect power, or in physics terms, focal length of spectacle lenses. It not only creates blurred visibility but also impacts effectiveness in responding to external changes. The role of right "level of consolidation" is similar in providing right supply chain visibility and ensuring its effectiveness. Over a few blogs, starting with this one, I plan to cover how level of consolidation defines harmony between supply chain players within its ecosystem.
Growing data analysis need of business users was evident when a super user expressed the desire to generate an operational report which will not only help him to know how many units of a certain product did a business unit sell in a retail store in Irving, Texas but would also state how much revenue did that product generate during the last four months broken down by individual months, in the south west territory by individual stores, broken down by promotions and demographics, compared to estimates (previous forecast) and compared to the sales of a previous version of a similar product.
The above user request clearly validated that today's decision managers must be able to analyze data along any number of business dimensions, at any level of aggregation, with the capability of viewing results in a variety of ways. They must have the ability to drill down and roll up along the hierarchies of multiple business dimensions.
Next week, starting Feb 28th till March 2nd, I'll be at Las Vegas attending Pulse 2011 conference. Pulse has been the stage over the last few years where IBM has propounded the use of Maximo as THE one solution for all asset management blues, regardless of asset categories (MRO/facilities/IT), industry vertical you may belong to or modular footprint (work management vs inventory management vs procurement, for eg). We are a Gold sponsor this year and you can meet me and my colleagues at booth # 305. We have a host of activities lined up :
Lets travel back in time in the 19th century, to take a quick look at the very interesting observation made by the Italian economist Vilfredo Pareto - 20% of the population possessed 80% of the country's wealth and the same was observed for other countries and over different periods of time. This has been known widely as the 'Pareto's Principle' or the 80/20 rule or the 'Law of Vital Few'. This principle has been adopted in the ABC Classification, which also happens to be the topic of my blog, with the 'A' group items [the 'vital few' representing 20%] contributing to 80% of the phenomenon, the 'B' group [representing 30%] contributing to 10% of the phenomenon and the 'C' group [the 'trivial many' representing 50%] contributing to only 10% of the phenomenon.
This law asserts that the outputs are not always equal as the inputs; that a small set of inputs, contribute or influence significantly the outputs. The principle plays an important role in depicting the imbalance, which may be 70/30, 80/20, 95/5 or 80/10, 90/30 or any set of numbers in between. The key to note is that this relationship is between two different sets of data [input & output or cause & effect] and hence need not add up to 100.
The chains of habits are too weak to be felt until they are too strong to be broken.
Can Existing Supply Chains be Modeled for Results?
There are a variety of supply chain models, which address both the upstream and downstream processes. The SCOR is one such model.
The SCOR or Supply Chain Operations Reference model, developed by the Supply Chain Council, measures total supply chain performance. It is a process reference model for supply-chain management, spanning from the supplier's supplier to the customer's customer.It includes delivery and order fulfillment performance, production flexibility, warranty and returns processing costs, inventory and asset turns, and other factors in evaluating the overall effective performance of a supply chain.
The Global Supply Chain Forum (GSCF) introduced another Supply Chain Model. This framework is built on 8 key business processes that are both cross-functional and cross-enterprise in nature. Each process is managed by a cross-functional team, including representatives from finance, logistics, production, purchasing, finance, marketing and research and development. While each process will interface with key customers and suppliers, the customer relationship management and supplier relationship management processes form the critical linkages in the supply chain.
Supply chain leaders must investigate current business processes and practices for fitment to SCOR. When Supply chains can be measured in terms of dollars and units, metrics and parameters - modeling for results and cross-functional collaboration happen.
Performance is a function of defined process, its constraints and outcomes. Consistent results and lost opportunities must be recorded for sustaining benefits. Modeling is just the begining of a journey to create a successful and un-surprising Supply chain. Changes to behavior in decision-making is the point when one can be certain that their Supply chain model is working.
As we are welcoming the New Year 2011, I tried to figure out what Asset Management software users (mainly Asset Intensive organizations) should look for from their Asset Management implementation in next few years. Based on my experience from some direct & indirect client interactions in last couple of years, I tried putting together a list of trends and here is the synopsis.
Recently some of my Infosys colleagues attended MUWG (Maximo Utility Work Group) conference and while they shared their experience about the conference, they mentioned about one of the most discussed topics which was "how to define boundaries for supply chain operations between EAMs & ERPs".
The other day, a colleague of mine sent me the brochure of Oracle's fresh pitch to the multi-channel world titled "Oracle Fusion Distributed Order Orchestration - The New Standard for Order Capture and Fulfillment". While the DOO terminology is a slight tweak on the more popular Distributed Order Management (DOM), I read through and noticed a fundamental difference in the pitching of the offering. The text goes thus:
It all starts with a desire to forge a long term partnership. The supplier impresses you (the customer) with his ability to do what it takes to exceed your expectations - ramping up volumes at a push of a button; reducing time-to-market; pushing cost down or not flinching to make capital investments just so that you get the desired quality....and then comes a day when you realize that the long term partnership has morphed into a dependency that you cannot get out of; at-least not without a painful divorce proceeding. Was Apple in this frame of mind when Foxconn attracted a spate of negative publicity recently?
In this blog I would try to put forth my understanding on the point as to why Distributed Order management is deeply rooted within the supply chain function and why to me it turns out to be a founding member of the SCM club.My thought process strated here. This is an attempt to draw parallels or bring out the core SCM areas Order Management addresses and also talk about few classic supply chain concepts from which the OMS way of problem solving has emanated from. I believe manufacturing is the genesis of all Supply Chains so excuse me if my points/cues are skewed and towards planning in Manufacturing.
We recently concluded our All Hands Meet where I got an opportunity to meet my fellow colleagues from a practice called Next Gen Commerce. As the name suggests, it is associated with clients that are aggressively forward looking and ready to take bold steps in leveraging new technologies and venture into new domains to gain consumer mind share. One of the great things that I heard was about how companies especially in developed economies are trying to capitalize or monetize information that's available on net - basically using what we all call "social media" to gain competitive advantage.
While I was thinking all this and trying to imbibe all great things that I heard, I was wondering if there could be an impact of social media on supply chains. This blog of mine is therefore of an exploratory nature (since I have little awareness on this subject) where I would like to share my thoughts and seek your inputs and comments.
I am sure Social media is something that all of us know in bits and pieces, and it touches our lives today in some form or the other. The typical examples of social media are facebook, twitter and blog sites such as ours. Some of these are subject-specific and lot of these are fairly generic and provide a platform for people to share their experiences, ideas and opinions in this borderless world. Although, it is just a platform for people to exchange information, but I am sure, it has a powerful influence to businesses and of course, to supply chains.
Every distribution warehouse in supply chain network holds inventory and has some safety stock maintained. How much safety stock or inventory should be kept at each warehouse is the topic I am going to address in this blog. In fact my focus will be on one common mistake that is made in the process of setting inventory and safety stock norms.
Through this blog, I would like to share critical drivers and few design principles for a right postponement strategy and urge each one of you to give comments, share your opinion and point of view.
As most of us know, postponement is one of the strategic initiatives adopted by companies to build an AGILE supply chain. There are various ways in which companies adopt postponement in supply chain. More prominently, it can either be a Manufacturing postponement that aims at delaying the differentiation in product offerings to customers or a Location postponement where goods are customized either at factory or a DC based on physical proximity to customer locations. Ultimately, it's about postponing some value-adding supply chain activities until a customer order is received.
Why do companies resort to this strategy? What's so special about it and what are its pros and cons? Please read on and do let me know your experience - really look forward to read your comments ...
In my last blog entry, we addressed core SCM concerns like special transportation needs, inventory management and reverse logistics and how these are instrumental for an efficient healthcare function. Breakdown at any point in this function has life or death implications. Taking this discussion further, let us touch on the need in this sector to collaborate better to leverage on the supply chain efficiencies of the intermediaries involved.
Dennis Gaughan of Gartner in his blog dated 29-Jun-2010 wonders whether its time for corporations to rethink their enterprise applications portfolio strategy (http://blogs.gartner.com/dennis-gaughan/2010/06/29/is-it-time-to-rethink-your-enterprise-application-portfolio-strategy/). Well, I think organizations are thinking about it all the time, sometimes when they do their annual planning and are reminded of the morass in their application landscape and sometimes thanks to M&A (esp for financial institutions) forcing them to look at what to sunset and what to fold in.
If government policies dictate supply chains, Contracts are the essential glue that keeps the supply chains chugging. After-all, without a contract in place, no sane buyer and supplier is going to transact for long. For the past two months that I have been swamped in contracts - one recently signed with a client and the second one currently under intense negotiations with a product vendor - I have realized how painstaking the negotiation process can be; particularly when the stakes are high, when uncertainty prevails due to complexity of work and geographical barriers and when you do not have a past relationship.
Ever since the IBM acquisition of Sterling Commerce (http://www-03.ibm.com/press/us/en/pressrelease/31742.wss), the standard questions I get asked is essentially variations around the theme of suitability and impact on our practice - Wasn't this acquisition purely for the BIS B2B integration piece which suddenly gives IBM access to 18,000 customers? Was the SCM piece of Sterling Commerce some kind of an afterthought or collateral benefit, if you may? If at all, it would fit in, where would it be? And most importantly, what happens to Infosys next, being by far (by a few light years, if I may say so myself) the leading player in Sterling SCM package related services in the SI space?
Let's get to the last question first.
Recently a client of ours had asked a question, which TMS solution provides us with the best capabilities. There are multiple TMS solution providers in the SCM space such as i2, Manugistics, SAP, Oracle, Red Prairie, Manhattan. Though all claim to be unique in their own respects and provide a bundle of functionalities, but there is a common search for the best. The question usually rests with the respective consultant's ability to grasp the depth of the product, client needs and the client's views of the product's alignment to the business goals. So, this blog corresponds to me putting down my thoughts on the various TMS solutions available in the market. Off course this comparison would comprehensive with expert comments from the supply chain community.
Primarily, one can categorize the TMS functionalities into planning (both strategic and tactical), execution (standard OOB TMS functionalities), Financials (Freight payment and cost allocation, though not looking at TMS as a financial tool), Fleet and yard management, door to door scheduling coordination.
In a generic sense almost all products have the basic TMS functionalities in terms of tactical planning, execution and the basic financials with a small degree of variations in terms of these capabilities. But when it comes to the functionalities pertaining to strategic planning, the more specific cases of fleet & yard management and scheduling the differences start to come up. I personally feel that i2 TMS and Oracle TM cover a wide range of functionalities and can be considered as leaders within this space. With respect to Fleet and yard management, Oracle TM has some capabilities which allow it to be ranked higher as compared to other TM products. Having spent the last few years working on TMS products (primarily i2 and SAP TM), i2 TM ranks ahead in terms of various capabilities when compared to the current SAP product. Though yes, as an obvious fact the integration between SAP ERP and SAP TM would be more seamless as compared to i2 TM. Also, the TMS solutions from Manhattan, Red prairie and Manugistics do not fall much behind the leaders in terms of the various functionalities.
Another stream where I feel that various transportation management solutions have shown innovation and created a differentiation is by offering on-demand solutions. This uses the concept of SaaS by providing the application to the client as a service on demand. The customer here does not need to install the software on the site, but subscribes to the hosted application of the vendor. This innovative delivery model has greatly reduced the organization's total cost of implementation and thus helped in the early realization of benefits. Currently such solutions are being provided only by the larger product vendors. I also feel that in the years to come this innovative delivery model would pave way for a paradigm shift in the way TMS solutions would be implemented , leading to substantial cost reductions and shrunken timelines.
Do share your feedback, thoughts and comments on this topic.
During the recently held Sterling Commerce Customer Connection 2010 Conference, I had the opportunity to speak and interchange with a number of various industry supply chain and IT executives. The good news was that unlike previous conferences, the mood among supply chain and IT teams is much more upbeat than 2009. There is a sense that the days of dark gloom are behind and teams can now focus on what really needs to get done across global supply chain business processes.
One highlight of my activity was the opportunity to sit with some members of the Infosys supply chain leadership team to discuss the state of global supply chain as companies approach a period of post-recessionary transition toward growth. My discussions included Gopi Krishnan, delivery manager and lead for SCM, Atul Pandey, Industry Head-Enterprise Application Integration and Services, and Jai Sankar, Vice President, Enterprise Solutions. Discussions also included other members of both Infosys and Sterling Commerce technology marketing and implementation teams.
Logistics is a considerable part of supply chain costs. So far as profitability goes, this can be a true driver to improve supply chain costs. Logistics is an area of best practice that can contribute to your managing rising supply chain cost.
I was recently sitting in a café a flipping through a magazine on Green Architecture for Retailers. It included the entire gamut of retailers - apparel vendors through grocery vendors and how they wanted their stores to be green; Emphasis on green paints, green lights, recyclable paper towels and so on; the investments and the returns thereof; testimonials that justified the idea, the ones that stressed on the longevity of these implementations and those that cautioned the reader.
One of the key objectives in the existing challenging environments is to develop long-term, productive relationships with the internal customers who are stakeholders within the procurement business team. This is interesting observation and SRM techniques can help organizations in building strong relationship with internal customers through foothold strategies that leverage long term relationship.
So the “Report cards” of the automotive manufacturers in US are out!! There are contrasting realities and some startling facts!!!. Do the Japanese and American car manufacturers behave the same way in the face of recession? How do their manufacturing and supply chain strategies reflect on their overall performance? Are there any “dark horses” among the American manufacturers who would pose the biggest threats to the Japanese in future? Are there laggards among the Japanese who would have to face the threat of survival in future? The numbers convey their behavior!!
I had the opportunity to attend a seminar on "How to Gain Competitive Advantage with End to End Supply Chain Visibility" sponsored collectively by Sterling, Deloite and GS1 held at Oxfordshire, UK sometime in November last year.
Deloite presented how important it was to maintain focus on business operations, with a clear emphasis on working capital optimization.
GS1 (They design and implement global supply chain standards) delved on the need of standard based solutions that enable organizations to gain visiblity of specific assets and how this in turn is driving process improvement throught the entire supply chain.
It’s the beginning of the year and our campus here at Bangalore is abuzz with client visits, with sometimes the Bangalore campus alone hosting 4-5 client visits in a single day. Budgets are being cast, everyone is looking for the right drop box to put their IT dollars and wait for maximum magic for the amount spent. While I am not involved in a majority of these visits, there's one industry vertical where SCM practice consistently gets invited to present their point of view, viz., Retail. My reasoning for this is that there’s really no other industry where one encounters so many best-of-breed SCM packages strung together by each of these retailers in a collage uniquely their own.
Well, this blog of mine is different in many ways, from the ones that I have posted so far. I am not going to write too much to describe this topic but I am more interested in knowing what you all know. I want to reach out to each one of you to know what you have seen in industry either as an operations guy or as a consultant. Even if you have not seen it being practiced in real life, I am sure you would have some serious opinion on this matter.
The topic is very simple and well-intuitive. My question is: Have you seen “lean principles” being practiced in supply chain in any industry (preferably consumer goods/discrete manufacturing). I know the term “lean” has been used or mis-used very often, but I am open to hear anything from you – just take a pick, think and find out instances from your experience, that you can bucket under being “lean in supply chain”. Do not just restrict yourself to manufacturing...
Let me give you one example: recently, I had a discussion with a Supply Chain Head of a leading consumer goods organization and they intend to implement a “pull based” system in their supply chain.
Consumer goods companies have been pioneers in supply chain and their performance in supply chain has been best-in-class by any standards. Traditionally, we have seen organizations especially, consumer goods, running a typical push model where sophisticated forecasting is done to predict demand, goods are manufactured and distributed to various POS locations as per the dispatch plan. The product is actually pushed down in supply chain and focus is to improve forecast accuracy because that really drives everything else.
On the contrary, here is this company that would like to implement “pull system” and do away with forecasting to the maximum possible extent. To me, this is one true example of being lean in supply chain. I have always seen companies focusing on improving traditional push model that I described, but I have never seen a “pull model” running anywhere and hence this blog…
Going back to my question to all of you:
Do you think such practices exist in companies (esp. consumer goods)? I don’t know any company implementing a pull methodology in supply chain (please provide examples other than Toyota)? How do you marry push and pull in the supply chain, and where does it exist? Where is the Customer decoupling point? What tools do you use? How do you drive this initiative – what are the critical success factors?
Please share your experiences and insights – looking forward to hear from this great group of supply chain leaders…
Hope you had a great time with your family this Thanksgiving. For me, Thanksgiving was an excuse to maximize my time with my family before they left for India this coming Sunday on a three month long vacation.
Anyway, coming to the topic of this blog, today I watched this amazing show on CNBC called Warren Buffett and Bill Gates - Keeping America Great, where the two greatest legends of the current times took questions from Columbia B-School students on various topics ranging from the economy to philanthropy.
Global Available to Promise is one of the most promising modules of SAP to manage a sales order. The module has far-reaching impacts on business processes right from Sales Order acquisition to the warehouse level fulfilment strategy. In this blog, we will try to understand how gATP implementation (one of the core supply chain modules of SAP) is having far reaching consequences on warehouse management processes.
Fresh from a study tour to China and tired after submitting a lengthy thesis on China’s Industry context, let me quickly pen a few lines on the competitive priorities that drive China’s Operations and Supply Chain.
This time I am going to share something that I have observed over a period of years working in industry and now as a consultant in supply chain domain. And, it is not based on just one or two experiences, but something that I have really seen at many occasions. I am sure, most of us would have experienced it too, that business users don’t need and talk those ‘big and heavy’ words or jargons. On the contrary, they look out for some simple solutions to take care of their business problems. The problems could be and in fact, are multi-dimensional and fairly complex but what they need is a ‘simple and basic’ solution that works fine for their set of constraints.
In my opinion, lot of times, people tend to talk in air without actually understanding issues that the client is facing, and use such heavy jargons as if that’s one quick pill that will solve all the problems. I personally feel, that we should be extremely careful and cautious of ‘just’ talking jargons; I am sure if we just stick to our basics, it will be more than enough for most of the problems that people face in business. Let me share few instances that made me felt so…
I recently got a chance to go through an interestingly titled research report from Bill Polk of AMR going by the headline "Asset Management Algebra: EAM = ROI". In these times of increasingly deficient attention-spans, reading a 2-pager is always better than reading a 20-pager with authors belaboring the same point in multiple ways.
Apart from the usual benefits of EAM (ROCE, efficiency improvements, structured information etc) and its new found importance (movement from tactical to strategic), an interesting point which I haven't come across in many other places was about "Capturing and preserving data from an aging workforce". While implementing EAM systems, we typically think of labor management (thru the EAM app or via a little help from more high brow "Workforce Management Systems or WFMs") as a way to capture skills of the maintenance personnel thus making sure the right party is assigned to the right work order.
IDENTIFYING CAUSES FOR UNSUSTAINABLE BEHAVIOR
Efforts for sustaining supply chain benefits have been under fire. Business requires supply chain programs for implementing their strategies. Variability, especially uncertainties in operations dim the chances for even the best solutions to return results in a consistent manner. Sustainability, is taking center-stage for CXOs and I see them scramble for ideas that have demonstrated results.
This blog is a representation of my feelings and thoughts about the significance of supply chain as a function. I have been associated with supply chain for little less than a decade now, and based on my experiences and interactions with supply chain practitioners, I feel that supply chain function has slowly started gaining importance in the industry. We know that companies are driven by functions that drive business, get revenue and manage money. And therefore, functions such as Sales, Marketing and Finance have always been the pillars of any organization, independent of its size and scale. Having said that, I feel that over the past few years, supply chain as a function exists as a more formal organization and has grown from a mere supporting function to the one that has a direct impact on a company’s balance sheet. As per one of the articles in AMR Research, the average tenure of a supply chain organization in consumer products is eight years. So, there is still a long way to go from here.
I’ve been globe trotting lately - India, UK, US and such. Living in Seattle puts a tacit yet obliging pressure on you to visit Starbucks. Ordering a cup of coffee after 9 months was an all new experience from the previous time I was there. Double-tall, non-fat, de-cafe, extra-hot cappuccino for instance, Sugar free, soy, cinnamon dolce, and no-whip latte for another. So I couldn’t stop but notice the granularity of the orders and what Starbucks had accomplished in the past 9 months.
In the current downturn, organizations are typically looking at spending only on sustenance and not wanting to start any new projects/initiatives- however there are organizations which have a clear focus of ensuring that they make the right investments in a downturn to overcome the challenges faced and also be ready when the economy revives. Organizations are always thinking of planning and optimizing their investments and this is more relevant in the current economic scenario. Areas of investment in Supply Chain during the current dark period’ gave us some interesting outcome.
Recently I read a great news article in Supply Chain Digest titled “Triple-A Supply Chain” that actually talks about the article published in Harvard Business Review in the year 2004 by Hau Lee. I am sure most of you would have read it but for those who haven’t, I sincerely suggest that it is a must-read for all supply chain practitioners. Although the article is more than four years old, it is very pertinent in current business environment. Let me just provide the objectives of the three A’s mentioned in the postingf and then, I would like to share my viewpoints with respect to one of the A’s that I feel is the ‘most relevant and critical’ capability for all the companies. The three A’s that have been talked about are:
a) Agility – it is about how quickly a company can respond to any change in its business environment. It refers to short-term changes.
b) Adaptability – it is the capability of a company to adapt to business changes that are more permanent in nature and therefore, it is strategic and has a long lead time.
c) Alignment – it is the ability to have common and shared interests across the supply chain including vendors and customers.
In the previous two blogs I have talked about the possibility of creating a cloud of SCM functions and commoditizing’ em to relieve the user from the tedious task of choosing, procuring, implementing and customizing SCM functions for his business. The general trend these days with the advent of grid and cloud computing is to focus more on the application and its use for the business rather than worry about scalability, reliability and security which are now an integral part of the cloud offerings.
My recent hunt for stem cell banking information in South India got me excited on a subject of high interest in the biomedical world. Stem cell therapy is the latest medical wonder discovery and supposed to be a cure for 70 odd complex maladies of humans, especially interesting because till late these ill’s were supposed be hard to win over with the conventional medical treatment methods - treatments which were more focused on treatment of the symptom or providing a patch solution for the life threatening diseases, not usually a permanent cure.
DNA is the building block of all life and living on this planet. They are the smallest finite elements which determine the characteristic and personality of any individual. DNA or gene therapy gets to the root cause of the problem. They provided the paradigm shift in medical treatment from the symptomatic treatment of the yesteryears to treating or correcting the diseases cells at source.
What has DNA therapy got to do with Supply Chain Management?
There have been numerous articles or reports written on building a ‘world-class’ or a ‘best-in-class’ supply chain that you would have surely read. Few of them definitely outclass others in terms of the focus and clarity they provide to the supply chain enthusiasts and practitioners. One such report that I would like to bring to your notice is recently published by McKinsey & Company called “The Race for Supply Chain Advantage” – an outcome of an intensive research done, with large multinational companies participating from multiple industry segments. The report provides the six key practices that would drive supply chain performance, and make companies world-class with outstanding results in some of the most critical parameters such as customer service, cost and inventory. I wouldn’t like to comment anything on the practices listed but I do feel worth mentioning an interesting finding in this report and that’s about the better performance of companies with fewer formal IT systems as compared to the ones that have invested heavily into technology.
Because we do. Is it that simple? No way.
I guess the answer to this question manifests when we take a close look at any SCM application environment and the landscape of the hardware and software technologies associated with it and the amount of effort required to integrate these applications.
The global economy is changing. That's arguably the only thing that can be stated as fact about this change. The only other thing that could be stated as fact is the continuous need for corporations to make profits, serve customers and to provide value to shareholders. This is true for 3PL providers and their customers too. So, what do 3PLs do to be prepared for the coming change? What are the IT hooks they hang their business coats on?
I will be sharing my experience with the facets of 3PL IT force multipliers on 24th Feb 2009. Please register here to be a part of the webinar.
First of all I must let you all – the readers, know that this is the first of the three parts blog on Agile SCM Cloud. So please stay tuned for the “AGILE SCM CLOUD – Why do we need one?” and “AGILE SCM CLOUD – How to implement one?”
We are living in great times as far as Information Technology is concerned. There is a wave of information explosion and a corresponding need to process it efficiently and effectively. For example, search for new energy source or satellite downloads for weather forecasting. On the other hand almost contrasting to the computing needs Moore’s law is reaching its limits considering atomic sizes of the transistors leading to dual, quad and 8 core processors. Companies like Intel are even rolling out instruction sets to support multiple operating systems. All of this has an impact on the way we have been computing so far – a piece of software tied to a piece of hardware and both of these tied to a business need. We are now thinking of dynamic environments that grow and shrink to meet the demands. Not to mention the biz terms like Grid Computing, Virtualization, Software-as-a-Service, Utility Computing, Green Computing and Cloud Computing in that order to go with it.
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.
Demand and Supply go hand-in-hand. One would be forgiven to associate such a statement with best-in-class supply chain supported by best-in-class IT support systems. This could be a distant dream for few other aspirants. However what I am referring to is the not-so-obvious-but-omnipresent power sector.