Jun252010

Consumer Electronics Industry is King of Innovation in Supply Chain Information Technology

Published by matt.wilkerson at 4:05 AM under supply chain systems | Technology

In a recent strategy discussion, I was talking with several colleagues about industries that have the greatest level of supply chain adaptability and advancement. Not surprisingly, we kept bringing up companies using innovative supply chain technology in the consumer electronics industry. 

Not only is this industry robust in terms of product innovation, but it is also leading other industries in terms of implementing and utilizing new technology for its supply chain needs.

But why is this? Is it just the nature of the industry to be adaptable since consumer electronics are known to be always changing? (As we all know, nowadays with consumer electronics, there’s not much time for a product to become outdated before the “next big thing” is already hitting the shelves.)

Here are several reasons why I believe that the consumer electronics industry is at the forefront of supply chain information technology utilization:

Highly complex supply chain for components - The growing number of available suppliers, numerous supply constraints, and a changing supplier base are driving the competitive need to be adaptable, especially on the front-end of product introduction or the unpredictable back-end of the product lifecycle. 

Broad set of demand channels - Brick-and-mortar and direct fulfillment are the two primary channels for distribution in the industry. However, hybrid approaches, which dovetail off of these two channels, are being tested and expanded regularly. A few examples of demand channels constantly being expanded include online advertising, coupons, and linkages as well as gift cards being distributed through various means for retail and customer-direct storefronts.

Loads of information available - Information from suppliers, retailers, industry associations and sales channel partners leads to a massive set of potential information available for forecasting demand and supply needs as well as managing performance. Traditional Collaborative Planning, Forecasting and Replenishment (CPFR) is being supplemented with rich Point of Sale (POS) data and consumer behavior data, which provide a meaningful portfolio with a broad range of possibilities for enhancing the supply chain information flow.

Lean and competitive marketplace being continuously reinvented - Competition for market share and margin in today’s very efficient business world require that the technologies put in place are forward-thinking and cost-effective. Information technology that drives the supply chain for long-term market leaders will allow little margin for error in meeting functionality and performance needs.

Promising outlook for continued growth - Results from a recent study by About.com indicate that 2010 and beyond looks positive for consumer electronics. Among the key findings, at least two-thirds of consumers are planning to spend as much as or more than they did in a somewhat disappointing 2009. In 2010, effectively managing supply and demand through the use of IT will allow companies to stay nimble and build on their position in the marketplace.

Convergence of Product Lifecycle Management, Supplier Relationship Management and Global Trade Management - All of these areas have set the stage for integrating disciplines that are traditionally handled separately. The true leaders in IT for the consumer electronics marketplace are developing solutions that merge capabilities for all of these disciplines in a harmonious way. As the software innovation continues to keep pace with the innovative market, we will see more advanced solutions that will lead the way for other industries.

So, for consumer electronics companies to keep up with others in their highly dynamic, fast-paced industry, it’s almost a necessity for them to keep their supply chain information technology current. 

As always, I look forward to your comments and insight on what you’re experiencing.

- Matt
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Jun182010

Integrating Supply Chain Applications: Why is the first message always so hard to accomplish?

Published by paul.faber at 8:39 AM under supply chain systems

Over the past few months, we’ve worked on several application integrations. And each time we go through this process, I am struck by how every implementation has its own personality and set of challenges. 

In theory the problem of inter-application communication is simple; one merely establishes a standard protocol (TCP/IP, XML, etc.) and then codes or configures an application to use that protocol. 

In practice, however, it becomes a little more complicated; the first set of messages exchanged between supply chain systems always seems to take longer than planned. 

To save you some headaches the next time you plan a system upgrade or implementation, I’ve created the following list of points to consider:

1) Size doesn’t matter for schedule compliance.

During the planning stages it is natural to feel comfortable with a large, established software company and to feel a bit nervous about the execution capabilities of a smaller company. But, be wary. In practice, I have seen some of the biggest industry software providers vary wildly in their ability to hit milestones. 

The amount of time and involvement to complete the task really depends on the complexity of your particular business case and the experience level of the services team assigned to the modification and implementation scope. Minimize and contain this performance risk by establishing test integrations as early as possible in the project performance and create buffers in the schedule before critical milestones.

2) The first integration milestone should be early and simple.

The most common integration problems consist of data format and security access issues. It is usually possible to test basic messaging using dummy data well in advance of the completion of complex underlying functional modifications. Most programmers may grumble about the dubious usefulness of exchanging a simple message header – and corresponding ACK (an abbreviation for the acknowledged receipt) – using dummy data. 

But from a project-management perspective, the exercise is very useful. It tests the readiness for integration of the physical IT infrastructure, the program build and configuration, IT security readiness, and vendor ability to support preliminary testing. 

3) Did you RTFM (Read the Fine Manual)?

Recently, we were testing a simple heartbeat message with a large supply chain software supplier, expecting this to be a routine one-hour exercise at most. We thought we’d see a simple ASCII “1H” character from the host and instead received an XML data stream, revealing an application configuration problem early enough to correct it easily. 

The test manager investigated the problem and found that one of his system configuration team members had not been on distribution for the client’s interface spec and had proceeded with a default standard. So, test early and often, and make sure the whole team has familiarity with the applicable specifications. 

4) No IT security plan survives contact with the conference-room pilot.

Make sure your IT administrator is a participant in the conference-room pilot. I have seen many instances where access-point configuration, firewalls, and other IT security issues have caused problems with data-sharing (mapped drives), database access (can read but can’t write), RF terminal disconnects, and inability to connect to communication ports (the messaging worked fine in development, why doesn’t it work in test?). 

In each of these cases, the project team had been assured that all IT security policy issues were taken care of weeks in advance. Make sure your CRP includes an IT rep who can address and fix problems on the spot. 

System integration is an art as well as a science. Keep these points in mind and you’ll be well-prepared to address the inevitable problems that arise during this phase of the project. 

For those of you who’ve already experienced this phenomenon, tell us about your headaches.

-- Paul

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Jun092010

People, Process, Technology – The Three-Legged Stool of any Operation

Published by david.meyers at 8:47 AM under supply chain systems

In some recent discussions with a few of my colleagues, we’ve been debating the relative importance of people, processes, and technology that support operational excellence, as well as what ties them together.

Thinking about my recent blog post on “Bubba-proofing” a supply chain execution system helped me frame up my position on the topic.

Recall that you can’t realistically idiot-proof a supply chain execution system or any system, but you must design it so that it prevents Bubba from doing something that may have catastrophic effects downstream.

Stated in a more positive and holistic sense: You have to design business processes that best deliver operational excellence, configure and integrate the systems to support those processes, and then train Bubba on how to use the system and follow the processes correctly.

When all three of these legs - people, process, and technology - are in balance, you have provided the basis for a stable platform for your business.

When any one of these three legs is cut short, the other two must compensate for the imbalance.

When two of these legs are lagging sufficient length, it is even more difficult to balance your business platform.

Ideally, you have enough length on all three legs – or room to expand (think tripod) – so that you will be able to adjust to the following types of fluctuations and maintain your stability:

  • Variability in end-user understanding and comprehension;
  • A wide variety of exception conditions; and  
  • Spikes in business volume, etc.

Your ability to expand and adjust these legs will also keep you from blowing your budget and help you maintain world-class customer service.

One could argue this analogy and insist that one leg carries more weight than others (i.e., all legs are not created equal), but I’ll leave that deliberation for another time.

I will also postpone the debate on whether the people-process-technology picture is best demonstrated with a pyramid, a Venn diagram, or a three-dimensional figure.

For now, I think is the key question is: “What ties these three elements together?” To answer this question, take a look at the image of the stool and ask yourself, “what are the rungs that connect the legs?”

As you see in the image, I’d like to propose the following:

·        The rungs that connect people and process are training and operational best practices;

·        The rungs that connect process and technology are operational best practices and configuration/integration; and

·        The rungs that connect technology and people are configuration/integration and training.

Perhaps you have other thoughts on the rungs that support your business platform.

How do you stabilize your stool so that it doesn’t wobble or falter under pressure? What are your philosophies for connecting your people, processes and supply chain technology?

 

--David Meyers

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Jun012010

The Mythical Man-Month: A Lesson In Learning from Our Mistakes

Published by tom.singer at 3:35 AM under supply chain software

I was rummaging around one of my bookcases the other day when I came across Fred Brooks’ software engineering classic, “The Mythical Man-Month.” The book, first published in 1975, is based on Brooks’ experience managing the development of IBM’s OS/360. It succinctly dissects the various factors that can make or break a large software development project. These include:

-        Project planning,

-        Assembling the right team,

-        Conceptual or design integrity,

-        Formal specifications,

-        Team communications,

-        Version control, and

-        Need for common toolsets.

The title theme should be familiar to even those who are way too young to remember a computing era dominated by machines like the IBM System/360. The idea of the “mythical man-month” suggests that you can’t necessarily reduce the time it takes you to complete something by adding resources.

In fact, Brooks maintains that adding too many resources can dramatically elongate delivery times. While some of the examples Brooks cites are certainly dated (e.g. “state of the art” is a 2MB machine with 400KB devoted to its operating system), his central tenets are as valid today as when the book was first published.

Seeing the book invoked two reactions in me. The first was a reminder of just how old I am. The second was to wonder if we are really that much smarter today about how we plan and manage our supply chain system selection and implementation projects than we were back in the card punch era.

Part of me says “yes.” We have the tools, methodologies and discipline to avoid Brooks’ tar pits. We have learned from the mistakes of past generations. But part of me can’t help but marvel at the repetitiveness of some of our mistakes. They must be classics, because people are so fond of them.

I attended a presentation earlier this year on the reasons that software conversion projects fail. The presentation cited an interesting statistic: Approximately 38% of implementation projects led by a certified Project Management Professional (PMP) fail.

One can certainly challenge this number, as it is highly dependent on the definition of failure. But many supply chain systems implementation projects do sub-perform despite employing structured methodologies and project management best practices.

There are many potential causes for failure that are beyond the control of any project management team. Flawed business cases, selection processes and vested internal interests can stack the deck against success. Some projects certainly fall into the tar pits due to project management practices. But others fail despite employing best project management practices.

I believe that our project management tools and approaches are better today. However, implementing a supply chain execution system still remains a very complex proposition for many operations.

So are we really that much smarter today? Do we still pursue the mythical man-month?

-- Tom

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