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September 18, 2009

...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: “Sign-off the SAP SRM 7.0 Road mapping exercise for an Enterprise” – Part 2

The prelude blog of SRM 7.0 was a fair enough curtain raiser to demonstrate our intentions.
In this blog we will focus on what exactly goes in during the “Road Map exercise”, the length and the breadth of the exercise.
i.              Roadmap Scope Definition
ii.             Questioning the holy cows
iii.            Intent for a BPR (Business Process Re-engineering) initiative, YES / NO
iv.            Identification of an SRM council
v.             Pre-Blue Printing (powered by Workshops)
vi.            Revisiting the Roadmap Scope definition
vii.           Roadmap review and Sign-off
Most of these look repetitive, but believe me, these in itself are a masquerade if not dealt with properly.Lets try and understand what we do in each of these phases and the Exit Criteria for the exercise.
i.             Roadmap Scope Definition
In this step, the consulting partner throws all the gyaan in his basket to the customer on the offerings of the Solution and also analysis of the Spend Analytics report / any such strategy document that led to the birth of the SRM initiative. The customer, at a very high level picks up Enterprise specific areas of interest to narrow down on a rough scope
Exit Criteria: Initial Road map draft
ii.            Questioning the holy cows
It isn’t necessary during the course of scope definition to accept all that’s currently identified as the core business processes to get carried onto the Future state SRM solution that’s in mind. This step gives us an opportunity to look at Questioning the way business processes are carried out currently and also identify those cumbersome wasteful processes that can be eliminated.
Exit Criteria: List of Processes that can go into BPR
iii.           Intent of a BPR
This step gets called, if step 2 reveals a big list of wasteful processes that require an elimination via adoption of Best Practices. This step becomes highly critical for companies that have opted to evaluate a Best of Breed SRM solution tailored on Best Practices to give them the competitive edge.
Exit Criteria: BPR document with an identified list of processes that needs tailoring
i.             Identification of an SRM council
It becomes all the more difficult now to look for the Super User community that actually influences the BPR initiative and drills down to the user community that are going to be impacted with the futuristic changes coming in. It’s a key responsibility of the Customer to identify the SRM council that can join hands with the consulting partner to craft the process and the Transformational roadmap
Exit Criteria: A highly sound SRM Cross-functional SRM Council
ii.            Pre-Blue Printing (powered by Workshops)
Now, we have the team, lets start work and arrive at an acceptable SRM transformational roadmap that will leverage the investments of SRM which would help CPO desk align themselves to the Overall Strategy and Business plan driven by the CEO desk to report meaningful KPI’s vide successfully implemented initiatives. Rest assured, an influential strong team will be able to delivery the ideal pre-blur print that has the Roadmap Scope definition enriched with the identified Transformational initiatives.
Exit Criteria: Pre-blue printing document
iii.           Revisiting the Roadmap Scope definition
Performing a rapid gap analysis will help content consolidation of Brainstormed initiatives, some of which will be knocked off and some will get in and become the final roadmap line items.
Exit Criteria: Finalized Roadmap draft
iv.           Roadmap review and Sign-off
Customer will review the Finalized roadmap draft and suggest modifications / sign-off the initiatives. This will give birth to potential projects and implementation scope to reach the future state adoption of SRM.
Exit Criteria: Signed-off Road-map document
This blog was long, but am sure would have given you a dope of a basic minimum walkthrough of events during a SRM Roadmap exercise.
I would wait to hear from you on similar experiences or a thought on “architecting a more complex result oriented road-map exercise”
In the next blog we will discuss on a selected case study of a customer on what they perceived out of the Roadmap exercise and the next steps towards the SRM journey.
Regards, Tridip

September 13, 2009

What drives China’s Supply Chain – Quality, Cost, Time or Flexibility

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.


Pick a random Chinese manufacturing/services firm and you have a 50% probability that it would rate Quality as its prime competitive priority. That is what a survey result, conducted by Tsinghua University in 2007-08 among select firms, states. Of the four competitive priorities – Cost, Quality, Time/Delivery and Flexibility/InnovationManufacturing firms rated Quality (51%) as the highest followed by Cost (26%), Flexibility/Innovation (17%) and Time/Delivery (7%) in that order. Services firms also rated Quality (46%) the highest. A careful reading of the outcome helps in unraveling the under-currents in the country’s supply-chain.

For starters, anything that is “made-in-China” has a strong quality perception issue; so it is but-natural for the Chinese manufacturers to be paranoid about Quality in their Supply Chain. After-all, this plague, thanks to sheer greed or plain ignorance, continues to haunt the country’s manufacturers and consumers alike.    

Interestingly Cost, which comes a distant second (26%) in ’07-08 was in third spot (after Quality and Flexibility/Innovation) when the same survey was done in 2001. What caused the firms to become more cost conscious during this period? A combination of three factors - appreciation of the RMB against the $ resulted in Chinese exports becoming expensive, rising input cost and slower growth in demand – have led firms to extract every possible yuan from their supply chains.   

What can be the reason for the Services firms rating Quality so high? It is because of Responsiveness, one of the sub-dimensions of Quality. The response-time in China’s service industries has much scope for improvement; in fact, Service operations hold a lot of promise given the visibly long queues at public places (banks, super-markets, call-centers, ticket counters..). A study by Wang et al (2003) on Chinese retail banking found that it took, on an average, a ridiculous 86 minutes for a customer to be serviced!!  

What can one say about the future? A safe bet can be on Cost moving down the ratings and Flexibility/Innovation coming up in the competitive priorities. The financial crisis has made the industry shift focus from exports to domestic market. The growing affluence combined with the buying power of the young generation (referred to as ‘little emperors’ courtesy the single-child policy) will certainly make the firms switch from a cost-focused mentality to one that promotes differentiation & innovation. What can be the consequent impact on their supply chains? I leave the floor open for your comments.

Keep it simple and Stick to basics

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…

Till very recently, I was working on an assignment with one of our client which is a leading global organization in its industry, much ahead of its peers consecutively for so many years. The client is running an organization-wide global supply planning program to standardize its various processes that are fairly local in nature, and build a strong alignment with other critical stakeholder functions such as Demand planning on one end and Sourcing on the other. As it sounds, scale of the program is really big covering almost all the business units, product portfolio and geographies it operates in. And therefore, when I interacted with the business community of this organization, I was expecting to hear and use all those ‘heavy’ jargons such as supply chain agility, responsiveness, collaboration with partners, supply chain visibility, performance management, global data synchronization and what not… But when I heard them and had detailed discussions to understand their problems and issues, I realized that I was actually wrong. Even though the organizations grow bigger and bigger, the business issues stay well grounded and contextual in nature, with each client having its own way of working around a set of problems and constraints. Therefore, in my opinion, it is very important that the language we talk is well understood by our clients, and that to me will happen only when we stick to basics and provide solutions that are simple.

I will not get into further details but I would just like to provide few examples here to convey my point of view. For instance, you may have heard and talked too much about ‘supplier collaboration’ but I don’t think a business user is going to share set of issues that he or she is facing in that language. The issues could be related to may be, what all information we need to publish to suppliers? can we build the capability to publish only a selected set of information to only a selected set of suppliers? what is the most user-friendly format that can be designed to capture all the information? how do we set the process and timeline around locking a supplier response etc etc. Now handling such specific business issues is far different than you can imagine when you talk about ‘supplier collaboration’.

Another interesting example could be about ‘supply chain agility’ – I don’t think you are going to hear business users talking about having an agile supply chain. What most likely you will hear is (from a supply planning perspective): how quickly can I do a rough cut capacity analysis on products for which I have received a big customer order? how quickly can I do MRP run, cut processing time for breakdown and generate component level forecast? how do I build the capability to identify products for which I have component shortfall etc etc…

So, no doubt, it is good to appreciate all those ‘great’ words. But in reality, for the business issues that a client has been facing day in and day out, I feel one should definitely stay grounded, stick to basics and keep things simple. Please feel free to comment and contribute; your ideas and experiences are welcome to enrich our opinions on this subject.

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