Daily Archives: November 27, 2007

the doctor Is A Blogger!

A couple of weeks ago, I told you the doctor is not an analyst!. This inspired a counter-post from the one and only Jason Busch, which in turn inspired a plethora of comments, including some that argued against what the comment authors hallucinated I said (which, of course, makes for good entertainment value, so you should consider checking the comments out as well as the post).

In this post, I’m going to summarize some of the finer points made by myself and others, left out of my first post, as to why I think it’s better to be a(n independent) blogger.

Independent bloggers don’t have to write about anything we don’t (fully) understand.
As an analyst, if a company is paying your company for a piece about them or their software, chances are you have a publication date you have to meet. Maybe that’s enough time to get a good grip on what the company and / or product you’re writing about does, maybe it’s not. Either way, you have to hit the deadline or risk repercussions. As an independent blogger, I can choose whether or not I want to write about something. If I don’t think I understand something well enough to write a decent post, I can sit on it for a while.

Independent bloggers can choose whether or not we want to respond to events “almost in real time” and whether or not we want to write a “report”.
Needless to say, when I posted the above comment, at least one reader hallucinated that I said “independent bloggers don’t write about anything they don’t (fully) understand”, which is obviously not the same thing. It doesn’t take much surfing to figure out that many bloggers are compelled to respond to events almost in real-time and quite happy to publish their initial half-baked half-wit thoughts on whatever just hit the newswire. However, just because an independent blogger chooses to do so, doesn’t mean he or she has to do so. (Note that I keep saying “independent blogger”. Bloggers who work for publications often have daily blogging as part of their job requirements and, like journalists and analysts, have deadlines to meet. Thus, they may not have the choice as to whether or not they respond to events almost in real time.) Also, there’s nothing stopping us from writing a “report” if we so choose – and publishing it all at once or as a well thought-out multi-post series.

With respect to software, in order to perform a deep and accurate analysis, you really need to to understand what code and architectures can – and can not – do, and this holds true for bloggers as well as analysts.
Eric Strovink summed it up best when he said that what the Excel power user would not be able to evaluate, though, is a new technology for spreadsheets that could have downstream implications far beyond the external functionality of Revision One Point Zero – for that sort of insight, you do need a reviewer with a strong technical background. While I will admit that it is true that an Excel power user is perfectly capable of reviewing a competing spreadsheet product with respect to functionality and usability, it’s not necessarily true that such a reviewer would be able to understand the capabilities, merits, and applicability of an entirely new type of spreadsheet product – or a spreadsheet 2.0. In the sourcing context, if you’ve only ever been exposed to e-Auction products as a means of collecting bids and allocating awards, would you be able to adequately review a combo RFQ-Optimization product? Would you even understand what it was? And, more importantly, if it was implemented correctly? You really need a strong technical (and, in this, also a strong mathematical) background to review such a product.

However, even more important than these comments,
Independent Bloggers can say what they truly think of a new product offering (within reason) – whereas analysts can’t completely shred a product if said product is made by a company paying their company hundreds of thousands of dollars a year for research and analysis pieces.
If I think a new product is a piece of junk, as long as I express that as my opinion (hey, even bloggers can theoretically be sued for defamation or libel if they present their opinion as a statement of fact – especially if they reside in the US), I can say I think it’s a piece of junk. Now, to be fair, one should also indicate why one thinks something is a piece of junk, because it’s mean to trash anything without a reason. Unless, of course, one thinks the reason is obvious, in which case they can just resort to satire ( which is protected speech ).

Achieving Supply Chain Visibility

Supply & Demand Executive recently ran an article by Aatish Goel & Murali Krishnan Sundararajan on The Flat Supply Chain that noted that globalization has created a massive increase in supply chain complexity and that supply chain visibility is emerging as a critical differentiator for companies to stay ahead of the competition.

The article also suggested that companies should manage supply chain visibility according to the process-technology-organization framework, and recommended the following from the process angle.

  • Effective S&OP Process Deployment
    An effective S&OP process brings the right information in front of all stakeholders in a timely manner.
  • Internal & External Inventory Turns Review
    Use a multi-echelon inventory visibility system that allows for regular review of inventory status inside the company and inside the supply chain as a whole.
  • Alerts & Exception Management
    The amount of data produced by a well-run supply chain at any point in time is huge and almost impossible for anyone to review manually (even with great analysis and reporting tools). Thus, it is important to have exception reporting and alerts to bring critical incidents and issues to the immediate attention of the right person.
  • Alignment of Supply Chain Metrics with Business Goals
    Use process-based metrics that complement business goals to monitor and improve the process.

This was a good starting list, but I’d also add at least the following:

  • Integrate PoS data and forecasting across the supply chain
    A supply chain view of inventory is not very useful if you do not know how much product you should have at any given location at any given time, and given that demand can fluctuate, using static forecasts to plan inventory is not optimal.
  • Use collaborative issue resolution processes
    When a critical incident occurs upstream in your supply chain that effects you, it’s important not just to insure your supplier, or your supplier’s supplier, starts working on a resolution immediately, but that you work with the supplier to not only insure a quick resolution, but to understand why the critical incident happened in the first place. Then, you can pass that knowledge onto your other suppliers and make sure it doesn’t happen to them.
  • Regular Review of Transportation Timeframes
    When calculating inventory requirements, it’s vital to understand how long, on average, it will take to restock a location in order to insure that you can handle demand spikes and not lose sales. If it takes 7 days, but a demand spike due to an upcoming promotion could wipe out inventory in 3 days, then it might be wise to temporarily increase the inventory requirements of that remote location.
  • Use Process Models
    Standardized, Integrated, S&OP processes are good – but streamlined process that are sound and complete are better. A process model will help you analyze your processes to make sure they are of just the right complexity. If your process is too simple, you could miss critical incidents or key data that could significantly change your forecasts and inventory requirements. Too complex, and you could lose the ability to react quickly.

From an organizational technology angle, the article had the following to offer:

  • Use an extended enterprise system.
    This will allow you to create a centralized data store, on which you can execute the data mining applications needed to detect exceptions and critical incidents, the analytic applications need to determine required inventory levels and transportation timeframes, and the reporting applications necessary to insure key information gets to key stake-holders in a timely and comprehensible manner.
  • Extend it with specific business solutions.
    The article recommends inventory optimization tools, business intelligence tools, and master data management tools.
  • Look at Service-Oriented Architectures (SOA)
    This can enable flexible collaboration at a lower cost.

This is a great start, but you should also consider the following:

  • Look at On-Demand SaaS
    Building a completely integrated supply chain management framework, even using SOA, will be a very time-consuming and costly endeavor even for the most technologically sophisticated organization. Starting with on-demand SaaS can allow an organization to get a fairly sophisticated system of supply chain management tools up-and-running quickly and cost-effectively.

In conclusion, the authors have it right – with supply chain complexity having increased exponentially in the last decade thanks to globalization and increased outsourcing, visibility is becoming key to managing risk and total cost and the time to do something about it is now.