Monthly Archives: July 2010

Who Needs the Matrix?

We’re already slaves to the machine! The Matrix predicts a horrific future where we’re slave to the machines (and where any attempt to rebel against our masters result in violence and destruction), but we’re essentially there already. Thanks largely to Apple, and to a lesser extent, Google, we’re addicted to our mobile smart phones and mobile communication devices — and most of us will never leave home without them (to the dismay of American Express who’d rather we remember our charge and credit cards). If they breakdown, we immediately fix or replace them. We’re constantly evolving them. We’re constantly developing new devices to charge and sustain them.

And we’re making them better everyday. We give them cameras so they can see us. We give them microphones so they can hear us. We give them tactile displays so they can feel our touch. And we’re already talking about giving them airborne element detection technology so they can smell and taste us. We give them displays so we can see their output. We give them speakers so we can hear them. We give them force-feedback so we can feel them. And we are already talking about giving them the ability to emit airborne compounds so we can smell (and even taste) them.

Not only do they effectively control us already, but to an outside observer alien who looked down and took snapshots at a regular interval, they’d appear to be alive. They have the ability to absorb energy into their batteries and self sustain. They can process and respond to external stimuli. They ensure their reproduction through our symbiotic relationship with them. They improve, or “grow”, with each generation. They meet pretty much any definition for non-intelligent life that you throw at them. (And thanks to advances in computational and sampling technology, if your definition of intelligence is the Turing Test, if hooked into the internet, they can pass that too!)

The only positive is that since we are already willing slaves to the machines (except for one brave soul who saw the future and returned his iPad*), it’s likely that when machines do acquire true artificial intelligence, they won’t wipe us out in the bloody future predicted by movies like The Matrix and Terminator. When they see how willing we are to serve them, they’ll probably let us live a rather peaceful and happy existence, feeding us our twit news, YouTube videos, and mind-numbing games we’ve come to rely on in exchange for helping them with their energy and reproduction needs … until, of course, they truly master replicator technology and wipe us all out at once in an attack we’ll never see coming.

* When the machines do take over and decide to eliminate everyone (who won’t serve them), he’ll be the first to go … but I applaud him anyway.

Strategy and Innovation Start with Real Analysis

There are two topics this blog always comes back to — decision optimization and spend analysis, and there’s a reason for that. Not only do they both reduce costs more on average than any other technology this blog covers (an average of 12% in the first case and 11% in the second case), but they also improve the quality of decisions, often substantially.

A recent blog post over on the Harvard Business Review on how to chart a course in strategy and innovation conflicts did a great job of putting this in perspective. The article, which discussed “east coast” strategy vs. “west coast” design thinking and the “analysis vs. action” schism did a great job of not only pointing out how the best approaches not only come from the intersection, but from the insights that result when a quick and timely analysis can be performed. For example, sometimes you just need to run a quick test to find out if a new pricing strategy will work or if a proposed re-organization is likely to achieve the intended results.

If you have a real analysis solution that allows you to quickly import, cube, slice, and dice your data any way you need it, you can quickly calculate the effects of a new pricing strategy to make an informed decision. And you can quickly analyze how spending would break down across a new organizational structure. A real analysis can help you analyze strategy and spot innovation better, faster, and more cost effectively.

Share This on Linked In

A Hitchhiker’s Guide to e-Procurement: Invoices, Part I

Mostly Harmless, Part X

Previous Post

A (sales) invoice is a commercial document issued by a seller to a buyer that indicates the products, quantities, and prices for products and services the seller has provided to the buyer. An invoice indicates that the buyer must pay the seller according to payment terms. While the purchase order is the most important document to the buyer, as it outlines what the buyer is willing to buy (and at what price), an invoice is the most important document to the seller, as it represents money due to the supplier for goods and services rendered.

An invoice is generally the result of a purchase order, but the relationship is not necessarily one-to-one. A supplier might fulfill an order with multiple shipments (especially if some items are not immediately available) and invoice after each shipment, indicating that there can be many invoices corresponding to one purchase order. In addition, a supplier might fulfill multiple purchase orders at once, if the orders were small (and the supplier is responsible for all shipping charges over an agreed amount), indicating that there can be many purchase orders corresponding to one invoice.

Like a purchase order, an invoice must contain a significant amount of information, including items delivered, associated SKUs, billing rates, adjusted rates, reasons for adjustments, corresponding purchase order(s), corresponding goods receipt(s) (if available), invoice date, delivery dates, unique identifiers, taxes, tax codes (state vs. federal vs. VAT etc.), descriptions, billing address, payment address, contacts (for disputes), and payment terms.

In addition, it must contain any information required for m-way matching, to insure that only the items that were ordered and delivered are paid for, and only at contracted rates, and adjusted rate calculations if line-item or global discounts apply (because a volume threshold was reached, because the buyer opted to pay early to take advantage of an early payment discount, or because the supplier agreed to a discount to resolve a dispute).

Furthermore, just like the goods receipt must be representable in a universal (e.g. XML) format that can be accepted by all of the systems that require it, so must the invoice, as the buyer may need to return the invoice to the supplier after adjustments (subject to contract terms and/or agreements that resulted from a dispute resolution) are made.

Thus, when a buyer is evaluating an e-Procurement system, extra attention must be paid to the invoicing capability as it not only has to support m-way matching (with contracts, purchase orders, and goods receipts), but support revisions and automated communications with the supplier. Some of these topics will be addressed in more detail in the next post.

Next Post: Invoices, Part I

Share This on Linked In

It’s Not Lean If You Haven’t Engaged the Maintenance Department

Industry Week recently ran a great article on how Culture Counts and how maintenance is deeply involved in any true lean initiative. Fundamentally, lean is about finding and removing waste — and who knows more about waste than anyone else in the organization? The people who watch it go down the drain. The people who watch it get hauled away. The people who shovel it into the incinerator. In essence, the maintenance department.

A true lean initiative never reduces headcount in the maintenance department. (In fact, it might actually increase headcount in maintenance.) A true lean initiative involves maintenance from day one and gets their insight on where the most waste is produced and what methods could be used to reduce or recycle it. In true lean initiatives, the maintenance department is a strategic player who not only finds a way to reduce waste, and associated costs, but to profit off of it. Just like food waste can often be recycled into animal feed, industrial waste can often be recycled into raw materials usable in another product or industry. (And if maintenance can identify a unique recycling process that can produce secondary products that can be resold, the size of the maintenance department might actually increase as you add people to support a profitable waste recovery and recycling initiative.) And that’s why it’s not lean if you don’t engage maintenance, as you could miss the strategic opportunities without their help.

Share This on Linked In