Daily Archives: August 8, 2008

Supply Chain IT Assessments

Warning! This post contains shameless plugs.

SourcingMag.com recently ran a good piece by Dian Schaffhauser on How To Do IT Assessments (8 Practices for SMBs) that is also appropriate for any organization looking to gauge the effectiveness of its Supply Chain IT systems.

  • Develop a Ratings System and Apply it Consistently
    For each area — data management, process support, compliance, etc. — develop a simple rating system, such as a numeric system from one to five or one to ten, that lets you see how good you are doing at a glance compared to best-of-breed. Then you can quickly see what systems need to be upgraded the most. Consider doing the same for each supply chain employee — logistics, sourcing, contract management, etc. — against a standard set of modern job descriptions. Look to the local professional society (ISM, CIPS, SCL, etc.) for these, since you shouldn’t waste time “reinventing the wheel”.
  • Bring in an Outside Evaluator
    If you really want an accurate assessment of where you are, you need to bring in an outside expert (such as the doctor) who is familiar with best of breed systems and processes to help you. This expert can also help advise you as to what system or process updates will be the most beneficial to your organization.
  • Select a Framework and Use It
    Frameworks really do work when it comes to managing, measuring, and improving the delivery of services. Any industry standard framework — such as Lean, Six Sigma, or CMM — will do, as long as you are comfortable using it.
  • Take a Holistic View of Time Measurement
    Where are your employees spending their time? And where shouldn’t they be spending their time? If they are routinely spending time on tasks that are not value-add to your business, then you should be focussing on automating or outsourcing those tasks. Note that it’s not the amount of time that matters. It’s whether the task has value. Some tasks, such as pre-sourcing project research, will take a long time, and that’s okay, because, done by an internal expert, they will result in considerable value. So don’t sit down with a stopwatch and blindly focus on the most time consuming tasks, it’s not productive. Identify those tasks that your people should not be doing, automate or outsource them, and watch the process improvements and savings roll in.
  • Be Upfront About Your Intentions
    If your intention is to outsource, be clear, especially if the intention is not to eliminate jobs, but to make your people more productive at their jobs. If you need to improve operations because the company isn’t doing well financially, explained properly, your people will understand and buy-in. After all, most people grudgingly prefer change over losing their jobs (which will happen if you don’t plug the leak in the ship and it sinks). If you are honest with your people, they’ll be honest with you — and give you an honest effort.
  • Technical People Need To Be Evaluated By Technical People
    … and experts need to be evaluated by experts. (Which is yet another reason to enlist outside help, like the doctor, when trying to evaluate the state of your supply chain organization and it’s supporting systems and processes.) Otherwise, it will not be a fair evaluation, and you could trigger unnecessary animosity within your organization.
  • End With Recommendations and Move On to the Next Project
    The assessment should have a goal — specifically, the goal should be to determine the appropriate improvement project(s) that you are going to move forward on.
  • Outsource or use SaaS Where it Makes Sense
    Do the strategic and outsource the tactical. System implementation? If you’re not good at it, let a third party do it. New trade rules? Let a SaaS GTM provider keep your system up to date. Office supplies? Use a third-party e-procurement provider that integrates 4+ providers and spot-buy as needed.