The Supply Chain Information Technology blog

UPDATES

Priority #1 - Make some SCIT investments now. The halt in purchasing new systems or upgrades has generated a backlog that will cause bottlenecks in the future. Don’t wait until the masses make their decisions to invest.

UPDATE: Many of you have taken action to make this a top priority. From what we are seeing, companies are kicking off new projects or are already in full swing – SCIT vendors are also seeing very high levels of activity. If you haven’t already started, time is getting short and it may be too late for this calendar year. If you haven’t gotten capital approved for 2011, now is the time to plan for 2012.

Priority #2 - Decide whether to replace or upgrade. Deferment has been a common tactic for making a decision on replacing or upgrading a system. Now is the time to understand the status of your current system(s) and make an educated decision before the purchase.

UDPATE: According to our contacts in the industry, this is taking up a lot of the bandwidth related to priority #1. Technology assessments and deployment planning projects will help you make the right call here.

Priority #4 - Establish the ‘Next Step’ in Your WMS Strategy. Evaluate your current situation relative to your original selection objectives and develop a plan for the ‘Next Steps’ to drive further efficiencies. Conduct an operations and technology audit and identify the specific opportunities to leverage the benefits of the investments made to date.

UPDATE: Whether this priority is a strategy for the future or a tactic related to an upgrade/replacement decision that you are considering now, your “go-live” date should still be just another jumping off point for the next phase.

Priority #9 - Contend with the talent gap. The competition to hire and retain key positions will be fierce. As one means to deal with the talent gap, companies can look at their core competencies and determine the best areas for outsourcing.

UPDATE: I wish this wasn’t true, but it is. Yet, despite the overall disappointing employment numbers, experienced folks in Supply Chain Information Technology are in high demand. Outsourcing may still be your best bet to help bridge the talent gap, but the best resources are seeing higher and higher utilization.

Priority #11 - Close the open checkbook. SCIT projects have been fertile grounds for time and expense vendor contracts. Now is the time to establish stronger vendor-client relationships, and focus on the terms and specifics of the contract.

UDPATE: This is as true now as it was earlier in the year, but it’s becoming more of a challenge due to Priority #9 above.

I’d really like to hear your perspective on these or your other priorities.

-- David Meyers

Other Resources:

Top 11 Priorities for Supply Chain IT in 2011

Top 11 for Profitable Growth in 2011

How Are Your Top Priorities for 2011 Moving? Global Supply Chain Firm Releases Mid-Year Analysis

Tags: top 11, scit, wms

In his recent Techwatch column, DC Velocity’s James Cooke reflected on the results of a panel session at the 13th annual Logistics CIO and Supply Chain Technology Form.

The session addressed the question of what technologies will have the biggest impact on supply chain in coming years. One of the technologies cited was mobile computing.

Given the latest generation of tablet computers and smart phones, this isn’t too surprising. These devices have already made significant inroads into our daily lives. Even people who don’t own one can’t escape them. There is no doubt in my mind that these devices are going to have a huge impact on how we use technology within the supply chain.

It isn’t difficult to find articles or blog postings touting the top 10 or so mobile apps for personal or business use. However, I haven’t seen anything yet on the top 10 supply chain apps.

I think that this omission will be shortly addressed as developers start targeting tablets and smart phones as logistics systems platforms.

Tompkins Associates is currently working on a tablet-based reporting app for our Tompkins Warehouse Control System (TCS). And many supply chain software vendors are already working on the next generation of mobile supply chain apps (see RedPrairie’s recent press release on mobile solutions group.)

So what will these supply chain apps look like? I must admit that my vision is somewhat fuzzy although I have a basic inkling.

Part of my vision problem is that mobile computing is hardly a new topic within the supply chain. Mobile computers have been used for years by supply chain operations to track and manage goods movement.

They have gotten more powerful, flexible and cheaper over the years. But in many ways, they are used in the same manner today in logistics as they were employed 15 years ago. While they have become relatively ubiquitous, they remain transactional devices that direct and capture activities through bar code scans and key board entries.

Although I expect to see some apps that turn smart phones and tablets into data collection devices for supply chain systems, the really killer apps will undoubtedly look quite different. They will take advantage of capabilities that these devices offer over the current generation of mobile computers found in warehouses and delivery vans.

Specifically these apps will leverage the enhanced graphics, wide-area connectivity, and flexible form factor capabilities provided by tablets and smart phones. They will utilize GPS, integrated cameras, voice recognition and cloud computing in truly novel ways.

As Cooke’s column points out, smart phones and tablet computers offer flexibility not found in traditional computing devices currently used in the supply chain world.

They can help break the bounds that tie managers to desktop computers. They can make control panels and dashboards accessible on truly portable devices. They can also eliminate the need to carry multiple devices (e.g., cell phone, hand held computer, GPS, and others) to do the job.  

The possibilities are numerous and intriguing. All we need are for developers to bring them forward. But don’t put your imagination on hold until you see the inevitable articles and press releases.

Let me know what you think will make the top 10 supply chain apps list for 2012.

-- Tom

Photo Credit: nvidia corp

Tags: technology, mobile, tablet computing

It’s no secret that the recession was a test of endurance for most companies, and no area of the supply chain has gone untouched by the shifting economy. But what we want you to think about today is how this has greatly impacted your company’s Supply Chain Information Technology (SCIT).

As the economy continues to strengthen, it’s time to take a look at your SCIT to determine how to get back on track and move toward profitable growth. That is why we came up with the following list of Top 11 Priorities for SCIT in 2011. (Visit our website for the expanded article)

Priority #1 - Make some SCIT investments now. The halt in purchasing new systems or upgrades has generated a backlog that will cause bottlenecks in the future. Don’t wait until the masses make their decisions to invest.

Priority #2 - Decide whether to replace or upgrade. Deferment has been a common tactic for making a decision on replacing or upgrading a system. Now is the time to understand the status of your current system(s) and make an educated decision before the purchase.

Priority #3 - Get a handle on Software as a Service (SaaS) and the Cloud. As these services become more popular, consideration of SaaS and hosting will become the new normal for most SCIT initiatives. While this does not mean that on-premise will become passé, more companies will be making their first foray into the SaaS world or at least factoring Saas into their plans.

Priority #4 - Establish the ‘Next Step’ in Your WMS Strategy. Evaluate your current situation relative to your original selection objectives and develop a plan for the ‘Next Steps’ to drive further efficiencies. Conduct an operations and technology audit and identify the specific opportunities to leverage the benefits of the investments made to date.

Priority #5 - Find TMS solutions even more attractive. Transportation spend is a key source of supply chain cost, yet the majority of practitioners in a recent survey neither use TMS nor have plans in place to even consider TMS deployment. This is an area where you may be able to improve productivity and efficiency.

Priority #6 - Enable SCIT through product extensibility. When considering the right supply chain technology, include “suite vendors” in the mix, as there may be other applications that should be considered. Suite vendors have been known to offer attractive pricing options when multiple modules or products are purchased.

Priority #7 - Handle compliance mandates in an efficient manner. Regulatory compliance already plays a prominent SCIT role in publicly traded companies and certain industries. Effectively leveraging SCIT applications and resources will play a critical role in handling mandates in an efficient manner.

Priority #8 - Put data to work through supply chain intelligence. In today’s market, attempting to use spreadsheets to develop a sourcing model and calculate key factors is not practical, if feasible. Business Intelligence (BI) technology handles considerable data, resources and technology needed to comprehend these key sourcing factors.

Priority #9 - Contend with the talent gap. The competition to hire and retain key positions will be fierce. As one means to deal with the talent gap, companies can look at their core competencies and determine the best areas for outsourcing.

Priority # 10 - Keep a global perspective. As the business world becomes more and more global and security is quickly becoming a larger issue, companies are depending more on technology. At the same time, companies also have the option to take advantage of Global Trade Management (GTM), which is an area that sees a great deal of return in a short time-frame, in terms of IT investment.

Priority #11 - Close the open checkbook. SCIT projects have been fertile grounds for time and expense vendor contracts. Now is the time to establish stronger vendor-client relationships, and focus on the terms and specifics of the contract.

The list above shows how SCIT priorities will be developing throughout the year. However, this is a generalized list that may not be applicable among all companies and industries. With companies trying to improve bottom-line performance, these top 11 will only continue to become more vital. Let us know your thoughts on this list and what you are doing to cope with the challenges of 2011.

-- SCIT Perspectives Blog Team

Other Resources:

Top 11 Priorities for Supply Chain IT in 2011

Top 11 for Profitable Growth in 2011

Supply Chain Information Technology

Photo Credit: elisasizzle

Tags: transportation management systems, profitable growth, upgrades

I recently read an article in Logistics Management Magazine about Bridging the LTL Relationship Gap. One of the interesting perspectives in this article was to put the LTL relationship under the prism of the widely taught model of human relationships proposed by Abraham Maslow in a 1934 article, A Theory of Human Motivation. His familiar model is shown here:

Physiological Needs: air, food, drink, shelter, warmth, etc.
Safety Needs: security, order, law, limits, stability, etc.
Social Needs: work group, family, relationships, etc.
Esteem Needs: confidence, achievement, respect by others, etc.
Self-Actualization Needs: realizing potential, self-fulfillment, seeking growth and peak performance.

The analogy in Logistics Management was this:

“Based on an adaptation of Maslow’s Hierarchy of Needs, we have to remember that whatever the party’s intent to create a meaningful relationship, the physiological and safety needs of the other party must first be satisfied. Conversely, if a company or individual is struggling to survive, it will be preoccupied with preservation and will not be able to consider the possibility of relationship development, no less an enhancement.

Given the financial challenges facing many companies today, it’s quite understandable that those that are fighting for their very survival will be looking for an opportunity for profitability and not a robust relationship initiative. Yet, without trust, strong communications, and patience, the longevity of maintaining a business relationship is likely to be tenuous at best.”

Tags: supply chain, technology, supply chain excellence

I am officially an eReader user. I didn’t make the plunge into this technology because I wanted to be an early adopter. As it happened, I got a Nook as a birthday gift last year from my wife.

I had made a couple of innocuous comments to her on the potential convenience of an eReader for the business traveler and the amount of books that we have boxed in the garage. I wasn’t angling for the device. Actually, I thought the convenience of electronic gadget could not overcome my desire to feel a book in hand, and I assumed that eReaders would provide a similar experience to reading PDFs on a PC, which can be a bit painful.
 
If I hadn’t received my Nook as a gift, I might still be sitting on the eBook sidelines, contemplating when to buy the device. Although, by now, I might be looking at the new full-color touch screen model as proof that my waiting to take the plunge was justified and be ready to make the purchase.

If I didn’t get my Nook when I did, I would have missed out on some interesting discoveries. First, I found that the eReader provides a comparable experience to reading paperback books. Once I started reading an eBook, I didn’t find myself longing to hold an actual book.

Secondly, while the Nook was certainly a more compact travel companion than a hardcover book, it takes almost as much room in my laptop carrying case as a typical paperback when combined with its protective leather cover.

The real convenience of the Nook comes from the ability to provide a book on demand. No more having to go to the bookstore or wait for a delivery of an online purchase when I want a new book to read right away.
 
At the same time, I don’t find the Nook experience flawless. Detailed maps or diagrams on this eReader can be illegible. And using the internal dictionary and highlight mode is a bit cumbersome. There are also many titles that are still unavailable in eBook format.

But these issues are negligible when compared with the benefits. So, as 2010 winds down, I haven’t bought a printed book yet this year and have no plans to do so in the future.

Being one of the converted, I find comments on the lack of merits from eBooks skeptics somewhat amusing. Essentially, they are saying the same things about this emerging technology that was said about downloadable music when hard-drive-based portable media players first became available.

I wonder, when was the last time these eBook cynics bought a music CD? Just like music distributors in the late 90s, major book retailers see the writing on the wall. Not only are they fervently pursuing the eBook marketplace, but brick and mortar bookstores seem to be focusing more and more on café traffic and gifts and curios sales.

It wasn’t until I got my Nook that I knew the technology would work well for me. I don’t think I am unique or that eReaders derive from a radically new concept.

Frequently, we really don’t know what a new technology can or can’t do for us until we get our hands on it.

That’s why many companies pursue pilot projects with new technologies. If a pilot is impractical, then companies can always do a thorough evaluation that benefits from the previous experience of others. Once we implement, the smart organization knows that it should do a post-stabilization assessment to determine what, if any, adjustments should be made.

In dealing with new technology, many folks naturally shy away from being on the front wave. They like to let others face the challenges inherent in the first or second generation.

Price and performance tend to smile on those who wait in the technology world. But waiting around doesn’t allow the possibility that a new technology can provide substantial value right now, before the more advanced generations of the product emerge. Deciding when to take the plunge requires putting aside preconceived notions and determining if taking the plunge may be the best bet.

I’m glad my wife forced my hand on the Nook. Otherwise, I would still be sitting on the sidelines finding all sorts of reasons why I shouldn’t buy one instead of enjoying the convenience that the technology provides.

-- Tom

Photo Credit: Mike Licht

Tags: technology, retail

1. Hub functionality is typically delivered over the cloud. Users access hub functionality through their Internet browsers.
2. The basic premise of most hubs is to provide value to all participants. They typically do this by automating the flow of information between partners and providing increased visibility.

You may want to dispute the second point, especially if you have a large customer or service provider who is trying to force you to use a particular trading partner gateway. But smart enterprises that have made collaboration hubs work know the hub must provide value to all participants in order to reach their full potential. They also know that collaboration is a two-way street.

The potential for collaboration hubs as a software solution is never more apparent to me than when I see a well-run supplier collaboration hub. These solutions allow manufacturers and distributers to automate the exchange of information with non-EDI capable vendors.

The advantages of this can be substantial, especially for operations that have a large base of small and off-shore suppliers. It can mean major reductions in data entry labor and associated errors, as well as an increase in the timeliness of critical information. I’ve seen distribution operations in this situation use collaboration hubs to boost the percentage of their inbound shipments accompanied by case level ASN data to nearly 100%.

You should know that these advantages cut both ways. Suppliers can spend an inordinate amount of labor processing paperwork and expediting issues via email, phone calls and faxes. They, too, can benefit from increased timeliness and visibility of data. Provided there is a well structured value proposition and on-boarding process, a collaboration hub may be a pretty easy sell to vendors.

So, if collaboration hubs are so neat, why don’t we see more of them?

They are hardly a rare commodity in the supply chain world, but I don’t believe that they are as prevalent as they should be. I realize that they are not appropriate or justifiable in many situations.

Traditional EDI tools are well established and work just fine for many trading partner communities. For some companies, the opportunities to improve processes and information flows with trading partners may not warrant pursuing a collaboration hub. Also, the relationship between trading partners may not be conducive to hub adoption as there is not a predominate partner to drive the process.

Based on what I see and hear, I believe that too many operations are still missing the boat on the value of collaboration hubs. Perhaps other needs continue to suck up all the oxygen in their IT strategic plans.

Many probably would agree that increased trading partner collaboration and integration is important to the health of their supply chain, but enhancing trading partner collaboration probably remains a perennial “Day 2” goal on their strategic IT to-do lists.

If this observation is correct, then it is a really strange one. We live in a world of extended supply chains. Improving collaboration between trading partners should be an objective few supply chains can afford to postpone.

-- Tom   

Photo Credit: D.Begley

Tags: technology, supply chain

I stumbled across this topic for this week’s blog by accident while browsing the web. Although this is not related to supply chain technology, I thought it was sufficiently high-tech to merit some general interest. I hope you find the topic as interesting as I do.

To begin, let’s review how color photographs are produced by digital cameras. The sensor in a camera cannot directly see color – it can only see intensity of light. When you see a camera advertised as “10 megapixels,” it means there are 10 million light-sensitive photoreceptors on the camera’s “digital film” chip. These photoreceptors record the intensity of the light that falls on them, from zero (black) to high intensity (white). Left to themselves, they produce a black and white image.

But for color, light needs to be broken into primary wavelengths of red, green, and blue (RGB). Combining these three colors in varying intensities creates the full spectrum of color. This is how a digital camera produces a color image. Each photoreceptor in the camera is fitted with an individual red, green, or blue lens that filters the light that falls onto the sensor. 

With this RGB filter in place, the digital information records varying intensities of red, green, and blue light at discrete points in the image. Powerful image-processing algorithms scan this information into the onboard microprocessor’s memory.

On high-end digital cameras, you can change the behavior of the algorithm by setting values for hue, intensity, white balance, contrast, and other variables. The electronics in the camera then go to work to produce a color image from individual pixels of red, green, and blue light intensity information. 

The scientific fact that color can be generated from red, green, and blue light has been known since well before the invention of photography. Since the late 1800s, there have been laboratory experiments in color photography. Technological factors, however, limited the practical majority of photographic images to black and white up until the late 1930s (and it was not until the 1960s that color came to the mass market, as immortalized by the Simon and Garfunkel song “Kodachrome”). 

Here’s the really interesting part: On my web search, I found that there was one early photographer who developed an elegant approach to color photography. He was a Russian named Sergei Mikhailovich Prokudin-Gorskii. He was familiar with theories that one could create a color image by taking successive black and white images through red, green, and blue filters.

He also built a projector that would allow him to show audiences color images projected on a screen. He was successful enough that the Tsar commissioned him to go on a photographic expedition to document the Russian Empire. These trips occurred from 1905–1915. 

The expedition produced thousands of glass plate negatives. These could be printed and displayed as conventional black and white images for publication and exhibition. However, the projection apparatus needed for producing the color images limited the practical extent to which the images could be published in full color.

Then came the Russian Revolution, which was a disaster for Prokudin-Gorskii and all other friends of the Tsar. He fled Russia. His collection of glass plate negatives ultimately wound up in the archives of the US Library of Congress, where they sat in obscurity.

With the advent of digital photography, a curator in the Library of Congress realized that the Prokudin-Gorskii photographs could be displayed in a manner never before possible. In 2004, the Library of Congress commissioned a restoration project. Each set of negatives was scanned into a computer, aligned, and color-adjusted in exactly the same manner as an image is produced within a digital camera.

Tags: digital, photography, russia

I recently read a blog post by Steve Banker on Logistics Viewpoints, published by the ARC Advisory Group, titled: Implementing a Supply Chain Application: The Cultural Issues. Steve’s post focuses on the people involved in systems implementations, how the teams could be organized, and their roles and responsibilities.

He raised some points that I completely agree with and others that I feel warrant some further elaboration:

 

• His main premise is that “successful projects include people, process, and technology considerations.” This comment is right on (see my recent post on this topic). People, processes, and technology are the three legs of the business platform, but they must be supported by best practices, training, configuration, and integration.

• Steve also says that the implementation team “is typically a cross-functional team led by IT folks with project management training or experience.” And he suggests that “having an experienced IT project manager is a key success factor.” I couldn’t agree more. This is a step in the right direction along with the whole cross-functional aspect, but I would encourage strong participation – at the project manager (or co-manager) level – from the business process side of the house. No one should implement a technology solution without ensuring that the requirements of the business are met and the solution is grounded in operational best practices. 

• Another challenge that he mentions is that the company demands customized application for its unique processes. And he notes that the “more implementations a company goes through, the less likely it will seek to add customizations.” Although this is a true statement, the key is to determine which customizations actually have an ROI versus those that are personal preferences, cosmetic, or purely territorial in nature. The only way to be sure is to weigh the value of each proposed modification.

• The topic of training is near and dear to my heart, which is another issue mentioned in the post. Apart from a solid design and comprehensive testing, it is probably the most critical process of any implementation. Steve’s term “super users” is right on target. I would encourage the project team to consider identifying certain team members as “super users” early on and using them as testers as well as trainers. These are the same folks who will be your “first responders” during go-live and post-implementation support.

• I would also recommend that the “super users” mentioned above could (and also should) be able to serve as what he refers to as “coaches.” As he says, “These folks, usually frontline managers of a process, are available to users who are not using the application effectively. It is a good idea for coaching to be proactive. In other words, don’t wait for users to come to the coach, but have a process for identifying users who are not using the application effectively.” Great advice!

Keep watching Logistics Viewpoints as well as Supply Chain IT Perspectives for more advice on how to ensure you get what you pay for in your systems implementation. 

-- David

Tags: technology, implementation, business culture

As Paul Faber pointed out in his recent blog post, Walmart will soon begin applying removable RFID tags to individual items to improve inventory control and visibility inside stores. The theory is that tagging individual articles should reduce stock outs, shrinkage, and misplaced inventory while increasing labor productivity and shelf availability. 

This move toward item-level tagging may very well help push RFID to the next level in the supply chain world. I have long seen the retail store floor as being a key factor in the technology’s adoption. But I also believe that product authentication is another key driver in making the case for RFID. The vision for its role is well delineated by GS1 and its affiliate EPCGlobal.  

This vision is based on assigning a serial number at manufacturing or packaging to each item or sellable unit. This serial number must be unique across the global supply chain. It is stored in a data repository that can be updated as the item changes hands throughout the supply chain. Anyone taking custody of the item would be able to query the serial number against the repository to see if the item is registered or if there is anything suspicious about its history. This vision needs a physical data carrier to accompany each item that can store rather lengthy item-level serial numbers and be easily read throughout the supply chain.  RFID tags are a good fit for this role.

This type of authentication should help reduce counterfeiting, theft, and fraud, which are a bane to many industries. But there are few places where combating this pestilence matters more than in the pharmaceutical industry – an industry that definitely could benefit from higher visibility and security. I’ve seen estimates on worldwide annual industry losses due to counterfeit drugs as high as $75B. 

Safety is another key concern, as counterfeiting impacts the content and potency of delivered product. Mass serialization at the sellable unit level has been positioned as a tool for product authentication by legislation, regulations, and industry and standards organizations.

Brazil and Turkey are currently in the process of deploying pharmaceutical product authentication through mass serialization. Various European countries have piloted similar programs utilizing a ‘book-end’ approach with a single commissioning and authentication event. The latter occurs at the hospital or pharmacy. 

In the US, states have been addressing the problem through ePedigree laws and regulations, which focus on tracking the chain of custody. California’s ePedigree requirements – due to go into effect in 2015 – require serialization at the sellable unit level. Given the effort required to be compliant, many pharmaceutical manufacturers are already pursuing solutions to support these requirements.

RFID is not the only data carrier capable of supporting a global standard for serialization at the unit level. High density or 2-D barcodes can also be used for mass serialization. Brazil’s and Turkey’s requirements are based on GS1 DataMatrix bar code symbology. Europe also appears to be embracing the DataMatrix bar code as the foundation for pharmaceutical product authentication. 

And I have a feeling that most US-based manufacturers and distributors are looking toward 2-D bar codes rather than RFID tags as the vehicle to meet serialized ePedigree requirements.

There are certainly RFID success stories in the pharmaceutical industry. But when 2015 finally arrives, I wonder if it will still be more of a niche player in pharma than a mainstream auto-id technology. 

In a high-margin industry, a $.08 to $.10 passive tag on each sellable package shouldn’t matter that much. So I find the limited enthusiasm for RFID in pharma somewhat perplexing, especially since it provides advantages over 2-D bar codes that go beyond regulatory requirements. But I appreciate performance concerns and challenges. 

More importantly, we tend to look at RFID’s cost purely from a tag perspective. Infrastructure must also be taken into account. Image scanners and cameras are much more commonplace in the supply chain than RFID readers and software.

I’m still a believer in RFID. I think the ‘Internet of things’ will have a major impact upon the supply chain. But I’m not sure the RFID adoption rate will be going into overdrive anytime soon. I think that RFID still remains more of an evolutionary proposition than a radical transformation agent within the supply chain world – at least for the time being.

-- Tom

Additional Resources:

Documenting Distribution Operations: FDA Validation Beyond the Laboratory and Manufacturing Facility (White Paper)
http://www.tompkinsinc.com/publications/monograph/white-papers/fda.asp

Tags: rfid, pharmaceutical industry, supply chain

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.

Tags: supply chain, sc technology, supply chain technology, consumer electronics industry, technology