Monthly Archives: September 2010

Is Your Supply Chain Future In India?

As per this recent article in Digit Chanel Connect on “Moving Up the Supply Chain”, IDC India estimates the total Indian SCM solutions market will reach $132.6 Million in 2011. This might not sound like much, but, in relative terms, it’s the equivalent of a $1.6 Billion dollar market! (In 2009, the GDP of India was one twelfth of the GDP of the US.) And it’s still growing!

India’s Big 6 Consultancies are already making massive inroads into the global market. Many companies are making the SWITCH — Satyam, Wipro, Infosys, Tata Consultancy Services, Cognizant Technology Solutions, and HCL — and the current Big 6 Providers are being PACKED (PriceWaterhouseCoopers, Accenture, CapGemini, KPMG, Ernst & Young, and Deloitte & Touche) in. The major players might be SAP, Oracle, and Aspen today, but it won’t be long before the ABC Procure’s, Algorhythm’s, eBiz Global’s, Griha Software Technologies’, and Zycus‘s become the next major players in the Indian SCM space, and not much longer before those companies, and the next generation, make an even bigger impact on the global e-Sorucing and e-Procurement marketplace.

Furthermore, as Ravindra Sharma, General Manager of Ariba India, says: “With India poised for decent growth, many of the firms are proactively setting up [a] supply chain infrastructure which can help them grow rapidly and profitably. Many of these firms have global business aspirations and are benchmarking themselves with global organizations in various aspects including business processes, practices and technology“. As a result, deployment of SCM solutions is definitely increasing — and Indian companies are working hard to fill the surging demand now that Indian corporates have ‘tasted’ the efficiency of SCM solutions and now believe it to be a vital component of their business readiness plans.

In other words, while most of your technology options today will likely be US companies, or European offices with a strong US presence, it might not be long before many of the options on the table are Indian operations. But with the cloud and 24/7/365 service levels, will it really matter?

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There’s No Intelligence Behind a Spreadsheet

Not even of the artificial kind. So please, kill those electronic cockroaches now before the infestation becomes so big that the only way to remove it is with enough C-4 to totally obliterate the entire office building.

So what set off this latest rant? Rich Wilson’s comment at the CPO Agenda roundtable in London this May on “budgeting for a wider influence” where he said:

We developed these powerful analytic capabilities that we have applied to high spend categories, but people weren’t using it. So what we have today is a device called RFxpress, for taking an ordinary Excel spreadsheet that is fed into the front end of our application and configuring it. In essence, it enables the user to have the full power of our analytics to invite suppliers at the push of a button and conduct bids over the internet.

BULLCRAP!

Spreadsheets are NOT an analytics tool. They’re a ledger, which can be used as a poor man’s tool for data capture, but not for manipulation, sharing, or collaboration. Why? For starters:

User Entry Can’t Be Controlled

Sure Excel allows a user to define the type of a field and even lets a user define a few macros to check and format data, but considering that another user’s environment might have macros disabled (and, like Office 2008 on Mac, might not even support VB macros) and that any user can override cell types, a user can literally enter anything they want if they have even one iota of technical proficiency.

Cells and Computations Can’t Truly Be Hidden

A…C…K? Better unhide those columns in case they are important! Hmmm … that calculation looks wrong. I don’t really understand it, but I’ll change it anyway.

Application Configuration Can’t Be Controlled

VB supported? Maybe, maybe not. Analytics add-on pack? Maybe, maybe not.Third party optimizer? Maybe, probably not. Etc.

Good Data Goes Bad And Nothing Can Be Done About It

Just like every cell division results in some sort of degradation, be it a shortening of telomeres, an RNA transcription error, or the wrong number of chromosomes, every time a spreadsheet is copied or propagated, new errors are introduced. (That’s why 80% to 90% of spreadsheets have serious errors!)

Freshness is Fleeting

Like a loaf of bread, a static spreadsheet goes stale and gets moldy quite quickly.

Version Control is Impossible

The organization can define all the naming conventions it wants, but people are human and even if they try to follow the standard, they’ll screw up and the repository will degrade quickly. Plus, what happens when two people work on the sheet at the same time and upload a new version at about the same time. Whose is right?

The Sheet Is Not Even Guaranteed to Load

The MS add-in interface is poorly specified and that add-in could easily blow up the sheet, and if the user is unlucky, her installation.

In other words, SPREADSHEETS = FAIL. Is that clear enough?

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Quality DOES NOT Equal Risk Management

Every now and again I see a headline that causes me to foam at the mouth. One of the most recent examples is a recent article in Industry Week titled “Quality Equals Risk Management”. While I’m generally a fan of this publication, I can’t stand it when a headline makes such an erroneous claim.

Quality is a by-product of proper Risk Management. Quality Control is an aspect of proper Risk Management. But even Quality Control does not equal Risk Management! Risk Management is a broad initiative that looks at, and attempts to mitigate, all of the risks in your physical, financial, and information supply chains. This includes managing financial risks around currency exchange, commodity prices, and economic instability. Environmental risks around natural disasters, climate change, and accidents involving hazardous materials. Political risks involving terrorism, the proliferation of Weapons of Mass Destruction (WMDs), failing states, and crime. Compliance and Regulatory risks stemming from globalization, expansion and restriction of trade, and regional instability. Workforce risks from infectious and chronic diseases, pandemics, and liability regimes. And other product risks from lack of raw materials, transportation breakdowns, and theft. Quality is just one aspect of risk — and quality control is just one aspect of risk management!

All quality suggests is that you have good quality control programs in place — but it doesn’t even guarantee that! It might mean you have a high quality supplier who takes pride in their work and goes the extra mile to insure quality despite your shoddy practices. And while the article is right in that quality is the most powerful when it is engaged to prevent defects instead of detecting them after the fact, it is still only one aspect of a well rounded risk management program.

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The Triple-A Approach to Growing Green

A recent article in the Harvard Business Review on “growing green“: three smart paths to developing sustainable products presented three broad strategies that those companies looking to obtain green growth can consider. While each strategy, as the article suggests, can be used independently, the best results will be obtained if all three can be used in unison. But first, the strategies:

1. Accenturate

Accentuation is the process of identifying and playing up existing, or latent, green attributes in the current portfolio. For example, if your company has been developing products with environmentally friendly raw materials or using recyclable packing for decades since before it came into fashion, you can already claim some level of environmental sensitivity. (And even a small claim can lead to substantial savings if the sustainability claims are not exaggerated — the media is quick to pick up on, and shame, greenwashers. For example, Brita increased its sales 23% compared with the category market average of 2% with such a strategy.)

2. Acquire

If there are no green products in your portfolio, buy someone else’s. If you can find one that has a good reputation, but lots of room for growth, you can hit the leprechaun’s jackpot. Just don’t try to integrate their operations into yours too rapidly if there is a cultural divide. The acquired company might have to operate as a separate division for a while. During this time, you’ll need to observe them and slowly replicate the most productive practices and ideals throughout your operations. After all, they’ve already mastered eco-friendly manufacturing, sustainable supply chain management, and green market development, so you need to learn from them.

3. Architect

If your company has a history of innovation and considerable new product development capability, building green products from scratch is an option. Even though this approach is the slowest of the three, it’s actually the most valuable as it forces the company to acquire valuable sustainable competency.

But the best approach for most companies will be a combination of all three strategies. The company should start by identifying and capitalizing on any sustainable products or processes it already has in place. As long as it doesn’t over-reach in its claims, this will help it to establish some street cred. Then it should look for an appropriate acquisition target. Not only will this add credibility by adding more green products to the product line, but it will give the company the expertise it needs to design, manufacture, and market new green products. Then, it should take what it has learned and start architecting it’s own green products, replacing those products in its catalog that aren’t green one by one. Eventually, everything will be green and it will clearly stand out from the crowd when compared with its competition.

For more information on how to accentuate, acquire, and architect, check out the article. It also has some great questions to ask when deciding if a particular strategy is right for you.

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