supply chain

Supply Chain Software Circle Jerk

by Lora Cecere on April 24, 2012 · 0 comments

Circle Jerk:  A group discussion or activity between like-minded individuals that validates mutual biases or goals in a non-confrontational environment. 

Source:  Urban Dictionary

 

(Now that I have your attention, let’s get our mind’s out of the gutter and talk about a problem in the software industry.)

In the software technology world, there are two launch periods for new products:   the spring and the fall conference sessions.  In both, technology providers bring thought leaders together to tout their version of NEW.  In many ways, the vendors’ events are a coming-out party to launch their big ideas amid lights and fanfare on big stages.  This month, as I traveled the country listening to technology presentations, I saw big stages, lots of fanfare, but I did not see Big IDEAS.  As I attend the spring 2012 edition of NEW for supply chain management at vendor events, my mind keeps repeating the phrase from the Apollo 13 mission in 1970, “Houston, we have a problem.”  It is shortly followed by another phrase.  One that I learned while living in Texas, “What I see is Big Hat, and no Cattle.”

In short, I do not see NEW.  In this world of mobility, social and big data with the compelling potential impacts on supply chain, I find this SAD.  So, as I travel to vendor conferences, I have to report that I do not see anything COMPELLING, or RELEVANT.  What I do see is a pattern of software providers re-wrapping license software with additional feature function capabilities.  In the main stage presentations, they may reference the new trends, but then I find them doing  “a bait and switch” of what they are launching in this year’s feature and function debut on slightly tweaked architectures.  I define this here as  “Supply Chain Software Circle Jerk.” It is a pattern that I do not know how to break.

As outlined in the figure above, a software circle jerk happens when a software company starts with a good idea, but over the course of time becomes less innovative and less relevant because they ”lose touch” with innovators and early adopters.  As software becomes more and more a discussion of feature function with IT directors and managers, there is a lower likelihood that the software can keep pace with the more promising trends in technology.

Tales from the Road

There were a few bright spots for me in this spring edition of supply chain software news. My most exciting moments came mainly from briefings. I am excited about the work that Llamasoft is doing for network design, the use of Enterra Solutions for Digital Path to Purchase, Kinaxis’ work on S&OP visualization, Terra Technology’s work on the redefinition of demand planning, and the use of Intelleflex for streaming RFID in cold chain environments.

Here is my ”take” of the events that I have attended:

  • SAP Insider used to be a must-attend event for me.  I will not attend another one.  The SAP Insider event has become so productized –manufacturing in one room, procurement in another, transportation in another and planning in a fourth room–that it is hard to remember that our goal is to build a supply chain system from the customer’s customer to the supplier’s supplier.  The main stage presentations are also classic examples of bait and switch.  The executives talk about the big trends of big data, cloud, social, mobile and advancements in predictive analytics and then show the next version of Customer Relationship Management (CRM).  It makes me laugh. (One of those deep belly hoots.)  However, there was one outstanding moment.  I loved the manufacturing mobility challenge workshop.  It was a bake-off by four system integrators building mobile applications on SAP Mobile Platform 2.  My vote was tied between the work that was done by Converge or Neoris.  It was great work by four system integrators in that one hour that drove home to me that we need to be redesigning supply chain systems to use REAL-TIME, not near real-time data.
  • I had a good discussion on supplier networks at AribaLive with a number of executives.  The Ariba event was attended by 1900 procurement executives.  The event was expertly executed and the speakers were wonderful, but I left the event unexcited. Under the tutelage of CEO and Chairman and Chief Executive Officer, Bob Calderoni,  Ariba has successfully  and conservatively navigated a very safe path through several turbulent markets.  I like Bob.  I think that he has done a good job.  However, as Vivek Kundra, former United States CIO and now Executive Vice President of Emerging Markets at Salesforce.com, spoke of the convergence of cloud, mobile and social and the future potential of the next generation of applications, I was excited. It was the Ariba I wanted to see.  The Ariba that I found was walking down a more conservative path.  Ariba’s launch is largely a more effective network for more efficient procurement transactions designed based on user feedback on a conservative architecture.  The contrast between Vivek’s message and the Ariba reality found me wanting.
  • I then went to the Teradata Influencer’s session in San Diego.  The Teradata event is also well executed.  They do a great job with influencers, and I am excited about their purchase of Aster Data.  In this audience of BI analysts, I always feel like an outcast– they all know SO much more about BI than I ever will–but, I always leave stimulated and wanting more.  However, as I listened to Teradata discuss their differentiation and foray into Big Data architectures, I wanted to get past the data layer to the semantic layer to redesign package applications.  I have so little patience to talk about data architectures for the sake of architecture.  The use cases were financial services, eCommerce and hospitality services.  I gave each of the Teradata executives supply chain use cases and begged for investments in manufacturing and supply chain.  Let’s see how it goes.  I struggle with how to get the technology providers excited about supply chain.
  • I am now at Inforum 2012.  As I sit in the audience, I watch people trying to figure it out.  Infor now has so many bits and pieces of stuff that they have acquired over the years.  The executive message on stage was all about products and industry solutions.  On stage, Infor speaks of their new middleware termed ION and the introduction of mobility and a social layer. I like the sound of all of this, but what about cloud and advanced analytics?  It was a very traditional set of presentations that was not received well on twitter.   Infor is taking a pragmatic approach.  I like some of their stuff.  For example, their food and beverage solution has many jewels hidden in the covers.  For example, I think that there is promise in combining the Intentia application that was acquired with Lawson with the Fygir application for tank scheduling.  I like the fact that they now have a Sales and Operations Planning Solution, but it will take time for it to get traction.  I see them struggling to execute in the field.

So what do you think?  Do you think that we are in a circle jerk? Or have you seen something cool? Please share.

Current State

In our Voice of Supply Chain survey in March 2012, we surveyed 62 supply chain executives.  When we asked for current state of satisfaction on current software applications, we found a surprising gap.  I attribute most of it to “Supply Chain Circle Jerk.”  

Q16. How important are each of your current  IT systems to your supply chain organization? SCALE: 7=Extremely important – 1=Not at all important

Q17. How satisfied are you with each of  your current IT systems shown below?
SCALE:  7=Extremely satisfied – 1=Extremely

The Shaman’s Take

The gap is the largest that I have ever seen. (I have been doing this type of analysis as an analyst for over nine years.)  I think that we have lost our way.  I think that three things have happened:

1) Supply Chain Circle Jerk.  Software innovation has largely died in traditional vendors.  Innovation is fleeting.  The road map for the future of supply chain management needs to be about more than feature/function enhancements. …or a new middleware for a vendor to integrate acquired software.  …or columnar architectures. …or cloud for the sake of cloud.  We need to be using new forms of technologies to solve new problems.

2) Extended ERP.  I left the Gartner Group (the first time) when they launched ERP II.  I strongly believed then, as I do now, that it was wrong.  I felt that it was bad advice.  I believed that we were confusing the governance models of systems of record and systems of differentiation.  Tight integration of supply chain applications with ERP has taken us backwards, not forward.  For a software vendor, it is hard to innovate in decision support when developers are busy with mission critical ERP upgrades. Likewise, for a manufacturer, it is hard to innovate on decision support analytics when you cannot pay the bills.

3) Definitive ROI.  When companies are investing in software, there is a big whip to drive an immediate ROI.  When software companies are investing in new enhancements, there is also a ROI imperative or threshold to be met.  Very seldom do I meet someone that has an appreciation or understands that there is also a need for software innovation investments.  I don’t understand how we can invest dollars in R&D without a mandated ROI, but cannot apply the same standard to software for process innovation.  It reminds me of a couple of quotes that I collected while writing the book Bricks Matter.

“If there was a mandatory ROI, we would never have invested in email or personal computers,” Randy Benz, then CIO of Energizer. 

“If we had not invested in supply chain planning, we would have never been able to scale our business seven-fold in three years.  We did not know it then, but we know it now, “  CIO of a meat packer.

Calls to Action

At Supply Chain Insights, we have successfully completed our first two quantitative studies. Five chapters of the book are written. I am 1/2 way through the last chapter.  Our new website is up.  I am officially back in the research business.  Reports to follow next week.

We are continuing our work to build research for supply chain leaders wanting to drive early mover advantage.  If you are interested in the redefinition of supply chains based on big data, we would love your help in filling out our next survey. http://www.survey.supplychaininsights.com/b/cgi-bin/ciwweb.pl?StudyName=bdt1203&u=sci

If you would like to hear some of our new research, please sign up for the two upcoming webinars:

April 25th

Voice of the Supply Chain Leader

https://plan4demand.webex.com/plan4demand/onstage/g.php?t=a&d=719765874

May 15th

What is Supply Chain Agility?

http://www.steelwedge.com/resources/webinars

 

 

 

 

 

Step it UP!

by Lora Cecere on January 25, 2012 · 0 comments

My mother used to tell me, “If you cannot say anything positive, don’t say anything at all.”  And, while I should  probably heed her advice on this beautiful morning in Baltimore, I am not going to.

This week, I attended the Grocery Manufacturers Association (GMA) supply chain event.  When it comes to content, it was one of the worst events that I have attended in the past two years.  It was very disappointing.  So, why am I not going to heed my mother’s advice?  The answer is simple.  I care too much about the industry.

In the week  prior, I had attended the National Retail Federation (#NRF12) event in New York.  Following the event,  I had written a blog about the growing gap between consumer products and retailers in the adoption and understanding of new technologies. I left the GMA conference muttering, “It is not a gap.  It is a great divide.”

I contrasted what I heard at the conference to what I am hearing from my CPG customers.  The words of one of my customers’ kept ringing in my ears. Her point over and over again to me is that it is about the customer.   Her new goal is the ability to “define the Art of the Possible to better serve the customer.”   What does she mean by that?  It is the redefinition of the supply chain to connect customer’s customer to supplier’s supplier to improve sensing and drive a more intelligent response.  It is the use of new forms of analytics and the convergence of  new technologies (mobile, social and geolocation) to change supply chain management. During the conference, I did not hear the word “customer” once.  I scratched my head, and wondered what happened to the definition of the supply chain from the customer’s customer to the supplier’s supplier.

I had just come from Barcelona Spain where I spoke at a Georgia Tech class on Demand-driven Supply Chains.  As part of the program, I got to judge regional Coca-Cola pilots where distributors competed on who could drive the best progress through demand sensing and shaping initiatives. They were great!

I am also excited about the work that I am seeing in the industry on Digital Point of Purchase.  This is the use of digital technologies to change the shopping experience and the supply chain end-to-end.  I am closely following the work of my friend Jerry Wolfe, CEO and Vice President of Supply Chain Strategy at McCormick, on his work on Digital Point of Purchase (Follow his tweets at #DP2P.  They are excellent.)   So, can you imagine my dismay to see four executives on the main stage  speaking about “collaboration” as a series of small projects to eliminate dead head miles?  This is yesterday’s news.  I wanted to scream!

As the day went on, the program was even worse.  There just was not much there.  Very disappointing.  In the words of Warren Buffet, “When the tide goes out, you can see who is swimming naked. “  Folks, in my opinion the tide is going out.  Supply chain is more than logistics.  The world of technologies is at a revolution not an evolution.  We need to step it up and embrace convergence.  We need to redesign supply chains for big data to be ready for food safety compliance and customer sentiment.  Because if we do not, I fear we will see a lot of people swimming naked. It could be YOU! <And, as I scanned the audience at the event, this would not be a pretty sight.:)>

Seven Topics that I would have liked to have seen on the Agenda:

I know from many years of developing programs, that there are always critics. I don’t want to be a critic of the program without offering suggestions.  So, to be helpful to program planners, I wanted to share some thoughts on some potential themes for next year.  Here are some themes that I would like to have considered:

Mobility.  How are companies adopting mobility, and how is this changing the relationship with the customer, the cycles in the supply chain and the ability to improve communication with employees?  How are companies planning to use RFID and embrace the resurgence of RFID as a better sensor for the supply chain?  How is the adoption of mobility changing the pace of the supply chain?  How is geolocation visibility changing transportation?

Demand Orchestration.  Commodity prices are escalating.  Demand volatility is increasing.  Companies are looking for strategies to bridge volatility across the supply chain market to market.  At the conference, it would have been great to have had a discussion on how companies are managing promotions and new product launch with market-driven value networks.

Store Circulars.  The traditional grocery store cycle has been driven by the weekly printed circular.  Is this going away? What is the adoption of electronic circulars, and how does this change the rhythms and cycles of the supply chain?

Digital Path to Purchase.   I feel that we will only ever really collaborate (establish a long term win/win value proposition) if we focus together (retailer and the manufacturer) on the shopper.  I would have loved a discussion on how digital technologies (social, mobile, geolocation and eCommerce) are changing our relationship with the shopper.  A discussion of lessons learned, pitfalls and successes would have been a great discussion topic.  For example, is 5X lift on electronic coupons the market average?  And, if so, how are companies dealing with the replenishment issues of greater volatility?

User-based Content.  How are companies syndicating consumer generated rating and review data and using it to transform their supply chain?  How are they using it to better sense what customers want and how they are serving the customers?

Demand Sensing.  I would have loved to have seen a great discussion on the changes store clustering strategies along with insights on current state of syndicated data, the evolution of usable point of sale data, the convergence with social sentiment and User-generated Content (UGC), and how this is changing merchandising, store assortment and replenishment strategies.

Future of eCommerce.  What can we learn from Amazon and Alice.com’s current work into grocery retailing?  What does this mean for channel strategies and the assortment at the store?

Food Safety.  Where are we on the many initiatives on food recall and what will the food safety mandates mean to enterprise architectures?

Horizontal Processes.  How are companies defining horizontal processes to align end-to-end.  How are the processes of revenue management, supplier development, assortment, Sales and Operations Planning and social responsibility changing supply chain organizations?

Sustainability Scorecards.  We have talked about sustainability, and we have corporate social responsibility initiatives, but when the rubber hits the road, how is compliance affecting buying?  How is the sustainability scorecard affecting what is bought today and what will be bought in the future?  What steps and progress have we made to have a “greener” consumer value chain?

Summary:

However, as I drink my cup of coffee, I reflect on some undeniable truths.  GMA is primarily a lobbying agent for the consumer manufacturers.  The only people that can affect the program and the focus of GMA are paying members.  Supply chain is only one of the user-based committees.  The fee structure for folks like me to join is prohibitive.  So, the only way that I can affect the program and the course of the industry is to appeal to my friends who are members.  So, here I go.  This is my APPEAL.  Please STEP IT UP!  The tide is going out.  I believe what I saw this week is not good enough….  Let me know how I can help.

What did you think of the GMA conference and what do you think should be the focus of next year’s event?

This week, I will be in Phoenix at the Sales and Operations Planning (S&OP) IE event.  I will be moderating the program on Friday and discussing my current research.  Will I see you there?  Look for my tweets at @lcecere.