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HazMat in SCM Needs to Worry About New Tech Impositions!

During the last couple of weeks, I have been associated with the brainstorming around how best to manage Hazardous Waste or Material (HazMat) for a major US retailer. The client management team is focused on having a solution that covers HazMat of all kinds across the enterprise since that is the core KPI of the department. Most of our initial discussions have been around two threads:
1. Understanding our Point of View on Reverse Logistics (RL) since HazMat typically need to flow in the opposite direction of the regular product supply chain flow
2. Figuring out whether SAP EHS solution is the best bet versus IBM Sterling Commerce RL capability and IBM Maximo's work management capability.
Personally, I wasn't too keen on going for either of these approaches.

For me, the fundamental question was neither RL as a functional domain nor the three competing product offerings in question, but that of who are the people using HazMat and when/where do they use it. Broadly, this meant classifying HazMat occurrences into two buckets:
1. HazMat coming out of core supply chain operations at various stages triggered by product returns via multiple combinations like (a) returning entity - customer returns or vendor returns (b) disposition type - product returned via backhaul or handled via one of the authorized disposition mechanisms for that SKU (c) Damages during receipt in the inbound PO-processing cycle at the warehouses.
2. Hazardous consumables being used during Facilities Management (FM) activities. The work orders being executed as part of a typical FM task can involve something like a corrosive floor cleaner (acid) which would need to be tracked as part of consumables request pertaining to that specific work order.

If I place the user group or department up in the front, then what this means is that the customer service representative accepting a return or maintenance personnel cleaning that messy floor already has a system in which they do their day-to-day operations. This is where I would advice any HazMat information to be captured as this means lesser change management burden, reduced user angst, more accurate data being collected and consequently, improved tracking and audit of HazMat. Having a one-size-fits-all department-driven design launching a new system/application could well mean the opposite of all these.

The first phase is currently being planned for Retail items, which makes it more RL-oriented than consumables used during FM tasks. That means

  • enhancing existing OMS and WMS functions to capture HazMat
  • processing blind/non-blind orders better, with better linkages to original sales order
  • having more relevant and detailed disposition codes
  • implementing alert management functionality triggering management personnel about the presence of such products returned/damaged
  • product vendors or 3rd party providers taking the material away from premises subscribing to these process flows and so on.

If the systems can be built to prompt the right levels of safety measures to be taken as the transaction happens, that would be of real discernible value to the frontline employee handling the HazMat. If the reporting engine can be enhanced to classify, slice/dice HazMat data in terms of SKUs, damages vs returns, return to vendor vs disposition managed by the retailer and so on, that would keep the compliance hawks happy as well.

Net-net, we need a thought process that weaves in HazMat as part of the regular supply chain (or maintenance) processes, helping the handlers use the same systems they were using and then building in supply chain analytics (near real-time and data warehouse driven) at the back-end around those transactions that had some presence of HazMat in them. Treating HazMat as a product attribute which triggers certain behavior would result in a much simpler supply chain with all the required capabilities than giving it a life all of its own.

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