Supply Chain Shaman

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Herding Geese

Geese fly in a V-shaped pattern and walk in single file.  There are well-established patterns of leadership. Smaller flocks fare better than large ones. When they lose their leaders, many liken it to a wild goose chase. But, can they be herded?
Last week, I visited GXS.  The company is focused on the delivery of business-to-business (B2B) connectivity.  It is a spin-off of General Electric. At the beginning of the day, Steve Keifer, VP of Marketing, handed me a copy of his book, Herding Geese.  Without thinking, I thanked him and put it in my bag.  I get a lot of books. I did not think much about it.
Later that night, I started thumbing through it. The book is a good read. < For supply chain leaders, let me requalify the recommendation, it is a great read.> I am often asked for a list of good books on supply chain, and I don’t have many on my list. I will add Steve’s. I like the grounded reality and the sense of humor. Both of which, I find sadly missing in today’s market.
Steve’s book chronicles the rise and fall of the promise of B2B connectivity. I remember the hope and promise of yesterday’s initiatives like it was yesterday.  I remember the go-go years of XML, B2B Trading Exchanges, RFID, CPFR, and Global Data Synchronization. They were overhyped and I think that all would agree that they largely under-delivered on the promise. We could easily dismiss the importance of B2B connectivity, but Steve’s math shows that it has grown twice as fast as the much more overhyped traditional software market. GXS grew 33% last year. They found a niche in hosted B2B services and support of SAP projects (each SAP project plan has a need for B2B connectivity upgrades that is largely overlooked in initial scoping).
We laughed together at the new cadre of overhyped terms like Big Data, Hadoop, and Omnichannel Retailing. We talked about the future opportunities in the B2B markets and the potential role of GXS. I was encouraged.
In many ways, Steve and I are “birds of a feather.” We are both, in our own way, attempting to herd geese in the software industry. Many would see this as a lost cause. Over the course of the last year, we have seen more and more vendor consolidation and less visionary leadership from the suppliers of technology. I remain firmly convinced that the only people who win in software consolidation are the shareholders of the software industry.  There are too few examples where merger and acquisition activity has added value for the line-of-business user.  In fact, I struggle to find an example.
As a result, I believe that the first generation of supply chain applications was based on best-of-breed leadership.  Successful technology companies in this era had a visionary leader and the company was fueled by passion.  These best-of-breed solutions gave way to the rise of the extended ERP platform implemented largely by consultants that understood transactional feeds, but lacked an understanding of planning. Ironically, as computing power increased and machine learning accelerated, the supply chain technology market has been slow to respond. However, I think that the third generation of technology will be owned by new best-of-breed providers and will be complimented by a rise in interest in B2B providers like GXS, GHX, IBM and E2open, Software as a Service (SaaS) vendors like Kinaxis and Steelwedge, and advanced analytics providers for text mining and learning systems like IBM, SAS and Enterra Solutions.  I also see a resurgence in activity for demand sensing with vendors like SmartOps, Terra Technology, ToolsGroup, SAS, and VisionChain. So far Terra Technology is winning on referenceable clients based on the use of analytics, but the demand sensing space is heating up.
For supply chain leaders, it is no surprise that the INFOR, SAP and Oracle Supply Chain planning applications have failed to live up to the  expectations of supply chain leaders. The depth of the SAP application continues to fail the market and the Oracle application, while deep in demand and transportation planning, is weak in the areas of manufacturing and distribution. The INFOR platform is still being sorted out.  Of the three, SAP is the strongest, but it is expensive and long to implement and SAP has been slow to close the gaps.  The issues manifest themselves into organizational political dynamics of line-of-business leaders pitted against IT with paid consultants chiming in that 80% is good enough. Sadly, it is not. And the consultants are not egalitarian. They have made large profits implementing extended ERP platforms that have fallen short of meeting the needs of line-of-business users.
This week, at Supply Chain Insights, we will host our monthly webinar on IT supply chain spending. It is called the Voice of the Supply Chain Leaders.  We are doing monthly free webinars as a service to the community.  Past webinars have been archived and are posted on our website.
In this sharing of results, you will see the current gaps in supply chain technology and see the results on future expectations by supply chain leaders. We hope to see you there, and we would love to continue the dialogue in the SCI Community.

The good news is that Supply Chain Leaders are loosening the purse strings on IT in 2013. The primary focus is on demand management: the ability to sense and shape demand. Companies are more serious about demand and are looking at new options. These include cloud-based solutions and are they openly looking for new forms of analytics in the demand space. While there is a high level of confusion, it is about more than traditional demand forecasting.

A rising issue is the ability to get to data to use it.  It is about more than reporting. The gaps in technology are compounded by the lack of understanding of the supply chain by the executive team.  In Figure 2, which represents individual pain of the respondent, we see that after two decades of technology implementation, teams are still trying to get at data to use it. One of the primary issues is that most implementations of technology were implemented in a vertically siloed approach without looking at the extended supply chain from the customer’s customer to the supplier’s supplier outside-in. Too few companies have charted a look at how to build the end-to-end supply chain outside-in using advanced analytics.  In this study, 40% of companies were not clear on supply chain strategy.
When geese fly, there is a clear leader. There is a bird at the head of the pack and when it gets tired they alternate and stay in the v-shaped formation. They are clear on the goal and have a clear plan. I strongly feel that the answer here is leadership. I feel that it is time for the supply chain leader to clarify the end-to-end vision and chart the course. It requires enlightened leadership on new technologies and questioning traditional paradigms.  As we see in Figure 2, we have some clear problems. The lack of clarity of what defines supply chain excellence permeates the organization and the traditional approaches do not lend themselves to being able to get to data for clear decision making. We believe that it will mean a return to Best-of-Breed. Let’s just hope that it does not lead to an overhyped market around meaningless terms like Big Data and Omnichannel retail. If so, we are probably involved in a “wild goose chase.” I sadly hope not. I hope to see you on tomorrow’s webinar to continue the discussion.
What do you think? Let us know your thoughts.  The final report including tomorrow’s audience polling will be available by January 2nd.

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