Category Archives: Supply Chain

BizSlate, an ERP for the Small to Mid-Size Distributor

If you’re a small to mid-size distributor, with revenues under 100 M who is still running on QuickBooks (or even Microsoft dynamics), BizSlate is an ERP solution that you should be looking at — right now! BizSlate is doing for small-and-midsize distributors what Compiere and Made2Manage, are doing for small-and-midsize manufacturers — bringing usable, affordable ERP with exceptional supply chain support to the masses. And even though the official release of V1 doesn’t come out until Q4, BizSlate is already approaching two dozen distributors who are already using the solution, almost a dozen of which pre-paid for it over a year ago to be part of the usability design team.

With the sheer amount of data an organization needs to keep track of these days from an e-procurement, e-sourcing, spend analysis, risk management, and compliance perspective, it’s almost impossible for an organization with more than 10 Million in revenue to do without an ERP, but given that the annual total cost of the big ERPs still end up being in the seven figure range once implementation, training, maintenance, and infrastructure are factored in, these solutions are not affordable for the average small or mid-sized business. And while there are a number of SaaS best-of-breed solutions in each of the aforementioned supply management areas (like Coupa, iValua, Iasta, BravoSolution, BIQ, SupplierSoft, Vendormate, Lavante, etc.) that will allow an organization to collect and retain all relevant data, this data still needs to get into a centralized data store for inventory, warehouse, and logistics management; accounting; and spend analysis — a central data store that should probably take the form of an ERP solution. (And we recently pointed out how best of breed on an ERP backbone provides the best of both worlds.)

But not any ERP will do if you’re a small to mid-sized distributor. It has to be lightweight (as small to mid-size organizations don’t have the needs of large multi-nationals), SaaS (as they don’t have the IT departments either), low-cost (as they also don’t have large software budgets), and come in default configurations appropriate for distributors in different verticals (apparel, food & beverage, pre-manufactured components, etc.). And while Compiere and Made2Manage do well in the manufacturing world, and for the distributors who handle manufactured components and electronics, it can require some consulting and effort to customize them for apparel and food and beverage distributors, especially for certain organizations with certain processes.

Enter BizSlate. Before they spun it off from Ezcom software, the founders of BizSlate — who were focussed on low-cost EDI solutions for retailers — noticed the lack of appropriate ERP support for the small and mid-sized retail and distribution space, and decided to do something about it. Over the past year, they have designed a new SaaS-based ERP from the ground-up that addresses the everyday accounting, inventory, catalog management, and order management / e-procurement requirements of small and mid-sized distributors through a simple web-interface that is as easy to use as most of the new SaaS enterprise e-Procurement systems on the market. And they did it with the unique needs of the retail distribution space in mind.

The importance of their focus on the retail space, and the apparel space in particular, cannot be overlooked. In this space (as in food and beverage, but to a much greater extreme), it is generally the case that each distinct instance of a product (which is often a combination of colour, size, and style) needs to be its own line item and have its own SKU. As a result, setting up a clothing line in a traditional ERP system can often require days of manual entry as a user often has to create up to 100 products just to handle one shirt (10 sizes * 5 colours * 2 styles). If an average clothing line contains six shirts, two sweaters, four pants, three jackets, etc., and four new clothing lines are being carried, it is easy to see how thousands of new product records might need to be created in a traditional ERP, making the data entry so egregious that the ERP is almost unusable. In BizSlate, an administrator can batch-create new products simply by entering all the base product information and then defining the characteristics that define different instances and the set of values for each characteristic. A user can create hundreds of combinations in a matter of minutes.

In addition, they also looked at how orders were created and came up with bulk order template functionality that allows a user to quickly generate an order form for a product group, with a line for each instance of each product in the group, and a default order quantity for each group, or product. As a result, a user can generate an initial start-of-season order in a matter of minutes as all the user will have to do is change a few order quantities.

And this focus on process support is not limited to product and order creation. They also looked at the inventory management and accounting processes and made each step as easy as they could for the average user, focussing on collecting only the information that is required and only when it is required. The entire goal of the design is to keep the user out of the system as much as possible as success in this space depends on selling and generating orders, and then optimizing the inventory levels and logistics, not on mucking around with an ERP or trying to optimize pennies when the volume doesn’t exist to achieve FTL discounts from a big carrier.

As they are only in the process of releasing V1, there are still a few week areas, such as reporting which is limited to canned reports and accounting which only supports GL integration with QuickBooks, but even the functionality in these areas supports 80% to 90% of the needs of a typical distributor in retail or a related channel. V2, slated for Q2 next year, will have a fully integrated report writer, a (punch-out enabled) shopping cart, and support for carrier integration. But from an efficiency perspective, which was their goal, they’ve hit the nail on the head. The manpower savings alone will more than pay for the solution, and the value that a company will be able to generate through even the most basic spend analysis effort after deploying the solution for a year will be substantial.

In summary, if you are a small to mid-sized distributor, with revenues under 100M, in a retail vertical, and you don’t have an ERP, BizSlate is one company that you have to check out. They’re on the right track, and once you have your data in a centralized data store, bolting on a best-of-breed e-Sourcing or Spend Analysis engine will be a breeze, and your savings will multiply. (And yes, the doctor hasn’t been this impressed with an ERP effort since the early days of Compiere.)

The Seven Deadly Supply Chain Sins (Repost)

Originally posted on April 20, 2008, something tells me it’s time for a repost …

Over on the World Future Society, there’s a great piece in the President’s Web Log where he recounts a creative interpretation of the sins of the future. What really got my attention is how each of them have their supply chain equivalents, and how the first five in particular require very little modification. So, without further ado, here are the seven deadly supply chain sins.

  • Earthism
    Holding humans superior over all other life-forms, and putting our needs over the needs of the other species we share the planet with. This can take the form of plotting a sea-lane through areas wales like to call home or of a new highway through areas of woodland where animals on the precipice of the endangered species list live.
  • Harmful Technology Replication
    The reproduction of environmentally dangerous means of production, power, and transport when greener, friendlier methods have been identified.
  • Innovation Theft
    Stealing your competitors innovation and calling it your own.
  • Online Misbehavior
    Misrepresenting yourself and your capabilities on your website, in electronic negotiations, in electronic marketplaces, and anywhere else in the virtual world created by the internet.
  • Transportation Recklessness
    Use of highly expensive, environmentally damaging, and resource-intensive fuels to ship functionless trinkets and knick-knacks halfway around the globe or to travel halfway around the world to play golf with your counterpart at a supplier.
  • FTZ and STZ exploitation
    Regularly shifting your base of operations to take advantage of Free Trade Zones and Secure Trade Zones to avoid paying taxes and your debt to society.
  • Bribery
    Bribing public officials to change the laws to your corporate advantage … be it a reduction in environmental regulations, a reduction in safety regulations, or a reduction in social welfare and employment regulations to increase corporate profits at society’s expense.

The Supply Chain Paradox

The best supply chain is invisible, but an invisible supply chain gets no recognition in your average company.

This is the one lesson they don’t teach you in Supply Chain 101, probably because they don’t want to discourage you given the upward battle we still face in our chosen discipline of Supply Management.

The sad reality is that, outside of Disney, as expertly explained in this recent post by Christopher Sciacca over on Supply Chains Rock, your average company, or at least your average employee in your average company, has no knowledge of this paradox. Just like your average person is unaware of Bernoulli’s Paradox or even the Birthday Paradox.

At a Disney theme park, the supply chain function is invisible from visitors, who never see a delivery truck or van on the premises, or shelves being restocked by employees. Visitors get the feeling that all of the food and merchandise somehow magically shows up exactly when it’s needed. Disney accomplished this by building a one-square-mile-wide labyrinth below the park’s main streets, called the “Utilidor” that feeds goods to the park attractions surreptitiously and that is stocked with a three day supply of inventory at all times to ensure merchandise is there when needed.

In a smoothly flowing supply chain, raw materials and components show up almost just-in-time (JIT) at the plant that is producing your goods. Then the boxes are waiting at the other end to package them, and as soon as the boxes are filled, the palletizer is there to pallet them. As soon as the pallets are full, the pallet jacks are waiting to load them unto the truck that just pulled up to take them to your distribution centers. Etc. Etc. Engineers don’t have to worry about raw materials or components being late or in insufficient supply. Loading dock personnel don’t have to worry about needing extra temporary storage as the trucks are there when the order is complete. Etc. Etc. Not only do they not have to worry about supply chain functions beyond their jobs, but your job looks like it’s the easiest job in the world because, like magic, everything (and everyone) is there when they need it. As a result, the better your supply chain runs, the less respect you get in an average company for doing a “hard” job because you make it look so easy.

That’s the supply chain paradox, and one of the reasons we still don’t get No Respect.

Supply Chain Difficulties in Latin America

Inbound Logistics recently ran a great article on Beating the Odds in Latin America that did a good job of summarizing the changing situation in Latin America and the challenges associated with your Latin American Supply Chain. Given that it might be true that Latin America “is all about growth”, it’s a market you want to understand.

The first challenge that the article pointed out is that of logistics costs that are high compared to other regions of the world-about 15 percent of the cost of goods sold. Ouch! Like parts of India and Northern China, transportation options are few, roads are not great, rail is (almost) non-existent in many places, and ports are congested. As more investment flows into the region, the situation will improve as it did in China and India. The situation in Brazil in particular is going to improve rapidly with the 2014 World Cup and 2016 Olympic Games on the radar. And this isn’t the only transportation issue. The transportation industry is fragmented in Latin America, with a lot of small players and this makes it more difficult to manage, especially when handling volume spikes.

The second challenge is that of lagging productivity. Average productivity in the region has increased only 1.4% per year for the past 20 years, which is much less than in Asian economies. This is partly due to restrictive labour rules and sector specific regulations but also due to taxes and lack of investment.

The third challenge is that of supply chain expertise — there is a relative lack thereof in Latin America. Universities aren’t even offering logistics degrees yet, yet alone supply chain management degrees. Without even basic Operations Research programs, people entering the logistics field have to learn everything from how to manage a distribution centre to how to interact with customers.

The fourth challenge is that of systems. Technology systems infrastructure generally lack sophistication, and in some cases, even availability. Plus, for an average logistics carrier in the region, a TMS (Transportation Management System) is too expensive for a single company to justify. As a result, many companies end up doing a lot of manual work that is time and cost intensive.

The fifth, and final challenge, that was noted is that of security. Crime is pervasive throughout Latin America, and takes a heavy toll. The homicide rate in some Latin American cities is extremely high. For example, the crime rate in Rio de Janeiro has eight (8) times as many homicides as New York on an annual basis and eleven (11) times as many as Toronto. Plus, surface transportation is the most difficult security risk area of the supply chain in Latin America. Sincethere usually aren’t multiple routes to destinations within a country. In many cases, criminals simply block the highway and start checking trucks to see what products they like and they get away with it because the police are understaffed so they cannot patrol every road.

It’s not an easy situation, but it does appear to be a navigable one for those willing to roll up their sleeves and get their hands dirty.

How Do You Handle Inside Theft? Same Way You Handle Drug Dealers!

Apparel just ran a fascinating article on how former federal agents can help solve retailers’ employee theft problems. According to the article, the same practices used in fighting drug dealers applies to tracking down thieves inside the workplace. In particular, professionally conducted interview and interrogation tactics and procedures play a critical role in identifying the prime suspects in inside theft and solving this costly problem.

Given that the employee theft rate, which held steady at 15% from 1969 to 2006, skyrocketed to an alarming 75% later that year, and that employee theft cost U.S. Retailers $18.4 Billion in 2011, this is becoming a critical issue.

So where do you start? First, start with the red flag employees.

The article notes that there are four types of employee thieves actively engaged in stealing time, money, or products from their employers:

  1. Thieves by Nature
    who enjoy stealing
  2. Employees who feel Entitled
    because the world owes them more than what they earn
  3. Employees Stealing out of Desperation
    as they are in extreme debt or have a drug/gambling/other problem compounded by a weak economy
  4. Theft by Target of Opportunity
    where money in plain sight will be taken

These employees can be identified by well trained private investigators, with experience in the right areas of law enforcement, who can ask probing questions, confirm facts, corroborate allegations, and identify the full magnitude of theft in your organization. These interviews should focus on scheduling, accounting and inventory activities, and similar supply management practices where the greatest opportunities for theft occur. And conducted properly, in full accordance with the law, they will identify the perpetrators of theft much faster than if the organization waits until its losses mount to the point where law enforcement agencies take notice.