Daily Archives: September 24, 2007

The 2nd Sourcing Innovation Series – The Ents Awaken!

If you haven’t guessed already, calling bloggers to action is a bit like herding cats … except the cats move faster … much faster … and use real claws if you tick them off. And even though they recognize that Web 2.0 time goes by faster than dog years, when it comes to the big issues, they like to think about them … they really like to think about them! And sometimes they think so deep, you wonder if they’ve succumbed to the slumber of the Ents.

Fortunately, they haven’t … and some of them have finally picked up the virtual pen and committed their thoughts to the virtual paper. Even though Charles was quick to enter the fray, logging his thoughts the day my pre-announcement post went up, it was only late last week that the other bloggers began to make themselves known. Tim gave us a preamble post, inspired by a post of Brian, Jon Hansen gave us his preamble post and his main contribution, and Jason gave us his first post.

And more will be coming. Both David and Dave were contemplating theirs last week, JP is keen as well (though he might be a bit late with the new job), and a couple of the usual suspects (including Kevin Brooks and maybe even Eric Strovink, who’s also lined up for a guest post on spend analysis and contract management) should be chiming in sometime in the near future as well. There’s even a good chance I might even get one of our favorite analysts from AMR to chime in!

It’s taking longer than usual, but I assure you that I’m committed to do this and that I take the words of Cmdr. Peter Quincy Taggart to heart when it comes to innovation.

Never give up, never surrender! The future depends on it!

“Supply Chain” Does Not Have to be a Dirty Word!

In a recent discussion with Kevin Brooks, the former marketing guru of Apexon, and of Ariba before that, who is now the Vice President of Marketing for TrueDemand, what struck me most was not how useful the right technology can be in addressing the 7 Deadly Sales Suppressors, but how TrueDemand has noticed that sales folks – even the sales execution folks at big CPG companies whose careers depend on how many units they can move in a given timeframe – still view “supply chain” as such a low priority that it’s almost a dirty word and the domain of “procurement”, which many still believe has nothing to do with them. To them, it’s all about revenue … which is … well … wrong. Business is about profit and profit = revenue – costs. Thus keeping costs down is just as important in the pursuit of profit.

Furthermore, this apparently still holds true in the merchandising and sales execution teams at some of the world’s largest CPG companies … even those that have adopted the latest sourcing and procurement technologies and, at least within their supply chain divisions, understand just how important a smoothly operating supply chain is. When it comes right down to it, if you don’t have the right product, at the right place, at the right time, of the right quality, at the right price point – all the marketing and promotion in the world is not going to help you in the least.

This is where supply chain comes into play. Even if you call it logistics and distribution, operations, or sales execution – it’s still supply chain, and it’s still the proper application and use of supply chain technology that’s going to make the difference in a market where product life times are shorter every year and even a few days, or hours, can make a significant difference with regards to the impact of a newly launched promotion.

However, I will have to admit that it is a still a bit off a toss up as to what the right set of systems is – since there is no one system that tackles everything involved and since success depends on a system that you can use. Forecasting; Sourcing; Procurement; Logistics & Distribution; Inventory, Warehouse Management & Replenishment; Merchandising; Product Lifecycle Management (PLM); and Sales Execution – to name a few – are all important. And there is no one system that tackles more than a couple of areas. Now, it’s true that some of the bigger players, like Oracle and SAP, have modules that work off a central data store to tackle all of these issues to some degree, but no system tackles all of these issues to the extent that today’s best of breed players do, nor do any of the systems that support more than a handful of these modules have tight integration.

However, that’s not the point. These systems exist, and dozens of players in each area keep improving them, because they have value. They not only help supply chain do their jobs better, but they are capable of surfacing exceptions in near-real time that need to be acted on in days, or hours, to keep a product launch from going off-track. They’re effective, and for many companies, their day-to-day operations would be severely threatened, if not impossible without them. So don’t bicker about the terminology, or its value. You need the technology, and as globalization increases, you’re only going to need it more. Without it, you won’t be able to make sense of the data fast enough to make a difference. Supply Chain drives your company, its profits, and, ultimately, your compensation. Get used to it.

If you don’t accept reality, don’t expect reality to accept you.