As it rolls across the ground, you know that you are in trouble. A soda can that falls from the machine on a hot day is going to explode as you open it. You just know it. This is how I feel this Friday afternoon. I have rolled around the industry, traveled across the globe, listened and talked a lot. I am hot. It is sweltering. I feel that I need to explode. This blog post is Lora uncorked.
At a high level, I am on a mission. I want to make things better. I would like to see the advancement of supply chain practices before I die. Supply volatility and the amplitude of the shifts have never been greater. Predicting demand well has never been more difficult and more important. So, I am actively trying to drive a better partnership between technology providers and line of business buyers. I am trying to hold software vendors more accountable and make business results more actionable. This week, I am frustrated. I am tired. And, a bit cranky. So, as I become uncorked and spray my thoughts, if some of the fizz discolors your white shirt, or your perfect world, I am sorry. <Please put all of the comments in perspective before you fill my inbox with complaints.>
Technology Industry Is Consolidating. Some Are Laying off Employees. Last week SAP announced the purchase of Ariba, Bazaarvoice announced the intent to buy PowerReviews, and Oracle announced the intent to buy Vitrue. I am the most excited about the purchase of PowerReviews by Bazaarvoice. I started to write a blog post on what these three acquisitions mean to the market, and then I stopped. I feel that almost all acquisitions are over-hyped, and over-promised. In general an acquisition means greater value to the shareholders of the software company being bought, and less value to the company that is using the software.
What am I going to do about it? I refuse to write another blog post endorsing a software acquisition. I want to be known as the gal that tells it straight.
Too Many Conferences. Too Little Value. Over the past five years, the number of supply chain conferences has grown exponentially. WHEW! Just look at our in boxes…. They are full. As I have launched my new business, I have traveled to many conferences to grow awareness. I had no idea that the number of conferences had grown so fast. There are now groups solely in the conference business: IE Group, EyeforTransport, Logichem, Rapture World, Retail Connections, and SCM World. There are industry groups (APICS, IBF, CSCMP, Supply Chain Council, GMA, and NRF) competing with analyst groups (Gartner, Forrester and ARC) and the publishing firms (CGT News, RIS News, WIS). They are all battling for dollars and mind share; but the aggregate quality of meaningful content has declined. There are just too many conferences with too little content. We are asking vendors, in a time of consolidation and limited market growth, to fund more and more conferences that do too little for the industry. The quality of contribution from industry groups has also declined.
What am I going to do about it? In the community that I am launching in the summer, I will be asking all users to rate conferences using rating and review functionality. I am also going to concentrate my energy on the organizations that I think can drive value. Let’s hold all accountable to deliver the goods.
We Have Too Many Holy Wars. Stop the Fighting. I really do not care who in an organization — finance, supply chain or manufacturing– does strategic or tactical planning. I don’t care if the term is IBP or S&OP. Or if it is the latest and greatest optimization technique. I want to drive value. I care about the basics.
I see lots of talk. There are “new age” consultants hanging a shingle pontificating about this and that, retiring supply chain leaders pushing supposed best practices, and technology vendors overstating capabilities. So, I ask, where is the focus on value? Where do supply chain leaders learn the basics? What happened to these three basic truths?
- The plan must be feasible. I love the fact that modeling capabilities have deepened and that we today can radically improve value-based decisions. They are so much better! I love the work that I see companies doing now with the more powerful network design, inventory optimization, product portfolio and customer profitability technologies. BRAVO! I say, “Bring it on! It is about time.” My caution is that at the end of the day, the modeling needs to be iterative and cross-functional, focused on helping organizations make trade-offs against the same “objective function” as defined by the strategy. And, we can never forget the basics of a feasible plan. All planners need to understand the basics of Theory of Constraints, trade-offs in a complex system, push/pull boundaries, supply chain buffers and manufacturing campaigns (rhythm wheels). Before we get head-over-heels, we need to keep in mind that the most optimal plan may not be the best plan and that all plans need to be tested for feasibility.
- The strategy must be responsible. Today, the most effective supply chain is often not the most efficient. Today, supply chains need to be balanced against corporate social responsibility and fair trade commitments. The best plan is cross-functional, actionable and holistic.
- Planning must be translated into action. Only 13% of companies feel that they effectively tie S&OP planning to execution. This is an issue for all.
What I hate and see too often is:
- Let’s have lunch. Too many software decisions are made over lunch or a game of golf without consideration of requirements.
- 6 months to decide and 3 months to implement. Companies today are taking longer to make a decision and forcing supply chain companies to implement in shorter times. I would like to see a reversal. I believe that a supply chain project takes time to implement and it is not something that can be rushed.
- Bad Advice. Consultants often will recommend the solutions that will give them the longest implementation times. This gives the nod to large ERP implementations and is a disservice to smaller best-of-breed players that can be implemented in shorter time frames with lower cost. Be careful that you are getting good advice. I recently visited a company that should have implemented a solution for $450,000 US Dollars; yet spent 7.5 million. I see the best implementations using Best-of-Breed providers that are implemented by the technology provider.
- Too many lawyers. Software vendors are now hesitant to publish road maps of future releases due to the number of lawsuits. This is weakening the planning of companies to plan for new releases.
What am I going to do about it? I am going to push to tie real research from real business users to real value. I plan to continue to publish research openly in front of the firewall tying supply chain maturity to business value. I want to expose the issues.
OK. TGIF. I am looking over a nice river from my window in Heidelberg. I think that it is time to pop a cold one. Here it goes…. Hopefully, this time, I did not get the fizz all over your shirt.
I would love to hear from you. What has you uncorked? How does this compare to your perspective. Until then, I will be in seat 16C over the Atlantic busy writing….