Category Archives: Technology

Managing Supply Chain Technology Challenges

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A recent article in Supply Chain Leader on “synchronizing supply chain applications with continuous change” had some good tips on how to manage the challenges that come with any technology deployment, including technology deployed to support the supply management organization. As the article notes, even the best designed applications won’t deliver with a deploy-and-do-nothing approach. Value comes from continual use, and continual upkeep, and this only happens if you conquer the challenges and get the adoption levels you need, quickly.

According to the article, these are four of the biggest challenges and the best ways to combat them:

  • Operational ChallengesRetaining operational knowledge is a challenge for the best of organizations. A continual commitment to training and employee process ownership is key.
  • Evolutionary ChallengesContinuously changing demand requirements, competitive pressures, and supply arrangements put a strain on even the most agile supply management departments. They key to success is to continually monitor application usefulness, and when performance starts to slide, refine the models, data, and application thereof. This will require regular maintenance and updates for an on-premise application, or regular product direction councils with your SaaS vendor to make sure the application stays as relevant as the day you bought it.
  • Organizational ChallengesMany applications are implemented to respond to certain business needs, but priorities shift over time. As attention gets diverted, applications lose executive sponsorship and the (financial) support required to keep them relevant. In order to make sure this doesn’t happen, current and potential application usefulness needs to be reviewed every year along with the potential savings that could be realized if the application obtained the necessary support. Then, a business plan that presents the ROI can be prepared to secure necessary funding. And if the ROI isn’t there, you know it’s time to replace the application with a more appropriate one, and you can focus your efforts on building that business plan instead.
  • Infrastructure ChallengesAs the technology landscape continues to evolve, new hardware and middleware releases bring new technology and innovations to the table. Every upgrade of infrastructure opens questions of compatibility, both backward and forward, requiring business applications to be upgraded. But if you keep track of your current compatibility requirements in a compatibility matrix, and analyze upgrade requirements before a planned upgrade, you can insure that the infrastructure environment evolves to support your application needs.

Are We Moving Away From China?

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Editor’s Note: This is Dick Locke’s third post as a regular contributor on Sourcing Innovation. (His previous guest posts are still archived.) Dick, who has delivered seminars to over 100 companies across the globe, is a seasoned expert on International Sourcing and Procurement who wrote the book.

I just read through AMR Research’s “Supply Chain Risk, 2008-2009: As Bad as It Gets“. It rightly points out that it’s been a scary year. It does do a very thorough job of criticizing China. I know that AMR is just reporting what their clients report to them so I can’t fault AMR for what they say.

Among the things they say

China is the world capital of supply chain risk.

And, because of such concerns,

The move away from China sourcing starts with higher value-added work, boding ill for the Dragon’s ambitions to outdo Japan’s ascent from a cheap labor to high-tech economy.

If such a move has taken place, it’s not apparent yet in the computer industry.

Here are statistics from the US International Trade Commission: HTS 8471 is computers and peripherals. Data is January through April.

 

Country 2008 YTD 2009 YTD Percent Change
Thousands of dollars YTD2008 – YTD2009
China $9,101,153 $8,407,280 -7.60%
Mexico $1,734,089 $1,863,850 7.50%
Malaysia $3,166,961 $1,150,911 -63.70%
Thailand $1,138,875 $818,513 -28.10%
Singapore $953,493 $543,373 -43.00%
Japan $537,601 $383,673 -28.60%
Canada $280,130 $232,428 -17.00%
Taiwan $276,369 $207,521 -24.90%
Ireland $221,564 $171,436 -22.60%
Hungary $244,124 $147,130 -39.70%
Philippines $234,714 $130,273 -44.50%
Germany $125,194 $104,954 -16.20%
United Kingdom $103,245 $94,534 -8.40%
Korea $152,459 $88,018 -42.30%
Israel $47,296 $52,556 11.10%
Subtotal: $18,317,267 $14,396,450 -21.40%
All Other: $290,471 $211,065 -27.30%
Total: $18,607,738 $14,607,515 -21.50%

 

Sources: Data on this site have been compiled from tariff and trade data from the U.S. Department of Commerce and the U.S. International Trade Commission.

Comparing the first four months of 2009 to the same four months of 2008, computer imports into the United States dropped 21.5% in value. Imports from China only dropped 7.6%. China is increasing its share of imports.

I don’t think this is a sign that computer manufacturing is returning to the U.S. However, one sign that nearshoring may be taking hold is that Mexico is one of only two countries whose absolute value of imports increased. It jumped from number three country to number two.

These USITC reports are especially useful when sourcing. Look for both high value countries and rapidly growing countries. Your best sources will probably be in those countries.

Dick Locke, Global Procurement Group and Global Supply Training.

Roll Out to Your Community with RollStream

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RollStream (acquired by GXS) is a new entrant to the emerging SIM-centric (Supplier Information Management – centric) subspace of Supply Chain Management that has taken a Web 2.0 inspired approach to its solution. At the core of its “Enterprise Community Management” solution is the belief that collaboration is the missing critical component in many of today’s supplier management solutions.

As a result, when it comes to ease of use and supplier on-boarding, it has developed one of the best, as well as one of the easiest to use, solutions for Supplier Information Management as many people today are familiar and comfortable with the Web 2.0 and social network like interfaces it has developed for supplier, partner, and contact profile management as well as for survey creation and information gathering. It’s scalability and ease of use has allowed one of its largest customers to on-board their roughly 13,000 suppliers and manage roughly 150,000 points of contact. The solution has assisted this customer in credentials capture, compliance, training and enablement, and new technology rollout.

But, as you know, SIM is only the first component of Enterprise Management, whether you call it Supplier Central (CVM Solutions), Extended Enterprise Management (Hiperos), or Enterprise Community Management. There’s also, depending upon your outlook, risk, performance, compliance, sustainability, diversity, dispute resolution, initiative management, and collaboration for innovation.

The RollStream solution addresses, in its own words, basic Supplier Information Management in the form of on-boarding and profile management, Dispute Resolution by way of on-line collaboration, Compliance and Risk Management by way of task-managed projects and web surveys, and Performance and Feedback Management by way of a workflow-based community dashboard and collaborative scorecarding process.

The Supplier Information Management component, which is what they started with, is mature, and as I said above, one of the best and easiest to use solutions that you’re going to find for SIM on the market today, used by a number of global Fortune 3000’s to manage supplier bases of over 10,000 suppliers and 100,000 contacts in a number of verticals. The collaboration components, with complete conversation and audit trails, simplify the online dispute resolution process and make it much friendlier than the alternatives.

The Performance and Feedback Management is good for simple surveys and on-line discussions, but don’t expect to be able to build any complex scorecards within the system at this point in time. If you have a solution that generates your scorecards as spreadsheets or PDFs, you can automate the retrieval and attachment of the scorecards within the platform and then create tasks around the discussion of the scorecards with the relevant individuals at each of your suppliers, which could be quite helpful, but you can’t yet build complex scorecards within the system or attach comments to individual sections. This should not be an issue for most companies in most verticals, but if you are very metric-focussed or use collaborative scorecarding and need to retrieve inputs as well as send them and integrate all of the scorecards into a common collaboration tool, you’ll need to evaluate the solution carefully.

This brings us to the last component — Compliance, Risk, and Sustainability Initiative Management. Their solution, which allows you to build as many virtual sub-communities as you want within the application, and then create as many task-managed projects around those communities as you want, is quite powerful in its simplicity when it comes to the management of these projects, but most projects will require data collection and the degree of data collection will determine its fit within your organization. If you primarily do indirect sourcing or simple commodity sourcing, the solution should be more than enough for your needs as most of the regulatory requirements can be captured in simple yes-no questions. But if you do direct manufacturing, where you have to deal with RoHS, REACH, and or WEEE, the simple survey-monkey style web-form survey capability isn’t going to cut it when you have to capture not only whether or not thousands of chemicals are present in your products, but to what extent they are present. Similarly, if you have adopted, or foresee the need to adopt, complex carbon measurement calculations which depend not only on if-then logic (which the forms support) but also complex built-in calculations, then you’ll find their solution is not ready for prime time.

So what’s the verdict? I think many companies will find that the solution meets their SIM-Centric Enterprise Community Management needs, especially when you consider that even the best solution will take at least a year to roll-out to thousands of suppliers and get them proficient on the solution. In that timeframe, you’ll see more capability added to the Performance Management and Compliance, Risk, and Sustainability Management components as RollStream continues to implement their solution roadmap.

Now is the time for SMBs to invest in Supply Chain Technology

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I have to agree with a recent article in the Supply Chain Digest on why “SMBs should invest in Supply Chain Technology” now because it echos what I’ve been trying to say for over a year now … it could save your company a lot of cash. As Dr. Norek notes, on-demand supply chain solutions change the financial dynamics and may help improve cash flow right away. e-Sourcing helps you negotiate more savings. e-Procurement cuts your transaction costs and, integrated with e-Contract Management, helps you realize your negotiated savings by preventing maverick buying and flagging invoices not at contracted rates. e-Supply Chain Finance Solutions streamline invoice processing and help you get paid on time, especially if they support dynamic discounting. And so on.

You need to spend a little to save a lot and make a move while others stand pat and, right now, I can think of no better investment than supply chain technology which can deliver ROIs of 3:1, 5:1, 7:1, 10:1, and more (especially if you invest in the right spend analysis and decision optimization solutions). And if you can find a True SaaS solution that meets your needs, the up-front costs are minimal, and the continuing costs extremely affordable, especially compared to the continuing ROI that accompanies some of these modern supply chain technology solutions.

During these difficult times, well-planned and executed supply chain technology investments can allow SMBs to grow and save costs while many of their bigger counterparts are shrinking. So make a move … the market is yours for the taking!

One More To Go and Technology and My Hobby Attains Seniority

Over on New Florence, New Renaissance, Vinnie Mirchandani’s Technology and My Hobby series recently received its 64th submission, putting it one post away from seniority status. For those of you looking for something different, but yet interesting, to read … if you haven’t already, you should check this series out. To help you find the guest posts related to your hobbies, I’ve indexed them in alphabetical order by category.

Category Author Company
Archaeology (Armchair)
More Essays
Michael Lamoureux (of Sourcing Innovation)
Baseball (Little League) Mike O’Brien (of Appirio)
Basketball Coaching Dan Dal Degan (of Salesforce)
BBQ Floyd Teter (of Jet Propulsion Labs)
Beagles Peanuts
Blood Donation Tom Foydel (of SightLines)
Brewmastering (Home) Dennis Howlett (of ZDNet)
Bridge David Dobrin (of B2B Analysts)
Cars (Tinkering) Brian Sommer (of TechVentive)
Cartoons (Tech Toons) Alvaro “Blag” Tejada Galindo (of SAP)
Cats Rusty Weston (of Third Set Media)
Chess Rita Mirchandani
Community Service (Long Distance) Will Scott (of Waer Systems)
Cycling Paul Wiest (of Siemens Enterprise Communications)
Disney World Jim Holincheck (of Gartner)
Fishing Mike Prosceno (of SAP)
Friends Naomi Bloom (of Bloom & Wallace)
Flying Ameed Taylor (of Applation)
Gardening Erik Keller (of Wapiti LLC)
Gastronomy William Mougayar (of Eqentia)
Golf Jim Rafferty (of Market Shapers)
Grandparenting Frank Scavo (of Computer Economics)
Green Living Timothy Chou (of Cloudbook.Net)
Harmonica Leonardo Kenji Shikida (of Vetta Labs LTDA)
Home Design Josh Snowhorn (of Terremark)
Home Improvement (Global) Helmuth Guembel (of Strategy Partners)
Home Movies Tom Wailgum (of CIO Magazine)
Jazz Radio DJ Jim Berkowitz (of CRM Mastery)
Horses (Low-Tech) Mark Galloway (of oppSource)
Martial Arts Harald Reiter (of SSIP)
Model Planes Anil Wats (of DP World)
Music (as a Second Career) Richard Hunter (of Gartner)
Musical Discoveries Mike Laven (of Traiana)
Jazz (Big Band) Joe Thornton (of Lawson Software)
Opera Guenther Tolkmit (of Lawson Software)
Organ Playing Gerlinde Gniewosz (of Zuztertu.com)
Photography Michael Krigsman (of Asuret)
Reading Francine McKenna (an Author)
Restoring Antiquarian Books Jason Busch (of Spend Matters)
Rifles (Target) Tom Ryan (of Gartner)
Rock (Guitar) Devan Sabaratnam (of Business on Software fame)
RVs Tom Chimera (of Overpayment Recovery Services)
Running Eric Dirst (of DeVry)
Sailing Curtis Beebe (of PwC)
Side-Tripping Kimberly McDonald Baker (of Project Partners)
Photography Michael Krigsman (of Asuret)
Singing (Soprano) Gretchen Lindquist (of SAP Security)
Skiing Sig Rinde (of Thigamy fame)
Snorkeling Louis Columbus (of Cincom)
Soccer Coaching Christian Schuh (of Siemens Enterprise Communications)
Squash Nick Dembla (of Capsilon)
Super Momming Joy Wald (of ADT)
Technology Impact Bob Warfield (of SmoothSpan)
Technology Luddism Josh Greenbaum (of Enterprise Application Consulting)
Tennis Karen Beaman (of Jeitosa)
Theatre Marilyn Pratt (of SAP Labs)
Travel (International) Harish Malani
Vinyl DJs Ray Wang (of Forrester)
Wine John Dean (of ex-Steelcase fame)
Woodworking Jeff Nolan (of Venture Chronicles (.com))
Working Out Larry Dignan (of ZDNet)
Writing Charlotte Otter (of Charlotte’s Web)
Writing (Adventure) Rein Krevald (an Author)
Youth Science Mentoring Charlie Bess (of EDS)