By Kevin Hume 

Recently, I had the opportunity to interview a wide range of supply chain professionals engaged in the design, deployment and end use of Supply Chain Execution software (WMS/TMS/LMS).

I spoke with "in the trenches" practitioners who manage day-to-day operational challenges and execute the strategic mandates passed down from executive leadership.

I also spoke with industry analysts, third-party integrators and supply chain software executives. All this was done in an effort to compile a broad perspective of opinions relating to the emerging trends in Supply Chain Execution (SCE) software. My mission was to identify key emerging trends in the SCE software market over the next 3-5 years.

Considering the broad range of feature-function requirements in the SCE market, I received opinions across multiple perspectives (supplier, integrator and end user) and insight within different industries.

Despite the diverse group and backgrounds, a few issues consistently floated to the top of the list, irrespective of perspective or industry.

The most prevalent themes across all the discussions included:

Software as a Service (SaaS) offerings – This was easily the most common refrain from discussions with SCE software end users.

SCE practitioners’ view SaaS offerings as an emerging opportunity to provide the quickest speed to market at the lowest possible price point. Practitioners are clamoring to meet executives demand for cost effective solutions that can be quickly deployed with minimal investment in software applications and supporting hardware stacks.

Considering that a typical Best of Breed (BoB) WMS deployment runs 4-6 months at best from contract signing to go-live, there is an expectation that SaaS offerings will steadily grow feature-function capabilities and become catalysts to meet practitioners’ demands for quicker deployment timelines, flexible hosting options and lower Total Cost of Ownership (TCO).

From the SCE supplier side, a number of emerging SaaS applications have brought some innovative products into the market. As the next few years unfold, expect to see an increasingly robust SaaS feature-function set coming into the market.

Look for more details on the existing and emerging state of SaaS feature-functions in our upcoming blog posts.

Planning & Execution Integration – The rapid changes in the global economic climate over the last 18 months have highlighted the need for end-to-end visibility and the need for adaptability within the supply chain planning and execution processes.

The ability to provide planning capabilities that reach from the point of supply to the point of distribution have been a primary driver in the growing acceptance of SCM-ERP suites over the past few years.

The BoB players have also recognized this need and have been working hard through the integration of acquired products and core feature-function improvements matching the visibility and functionality of the SCM-ERP offerings.

It’s taken the BoB suppliers significant investment-development effort over the last several years to reach this point.

In the next few years, it should be revealed if the investment in end-to-end integration will pay off and which market’s organizational complexities will generate traction within the BoB view of Planning and Execution integration.

Look for further discussions related to the SCM-ERP versus the BoB model in upcoming blog posts. In fact, if you have a particular idea or question related to this topic, drop me a note and let’s discuss it.

Model Driven Functionality – Similar to SaaS offerings, Model Driven Functionality meets the dual requirements of "speed to market" at the lowest possible TCO.

The ability for SCE software to quickly adapt to emerging fulfillment demands within a zero modification environment continues to be a key desire for both current and future customers, as well as a critical path to capture increased market share for both BoB and ERP suppliers alike.

The Model Driven Configuration capabilities of the leading BoB and SCM-ERP offerings vary widely by supplier today.

The offerings that successfully ‘close the gap’ between robust functional configuration options within an intuitive, graphical tool set will become the industry leaders in the near future.

Now, take a step back and look at the three topics we just discussed – what are some of the external factors that really enhance the value of these emerging trends? My own thought process works something like this:

a) Current-emerging economic climate is driving a need for

b) robust, quick-to-market business requirement support; and

c) the limited access to capitol dictates lowest possible investment and TCO needed to support supply chain execution.

In a nutshell, I think these external factors are driving SaaS offerings, Planning-Execution Integration and Model Driven Capability to the top of the 3-5 year wish list.

Are these the topics that resonate with you and within your industry? Drop me a line! What do you think the emerging trends will be over the next 3-5 years within the supply chain execution market?

Kevin Hume

On my way into the office this morning, I stopped at my local convenience store for a cup of coffee. During the past year, I stopped going to the "premium" coffee shops as a way to save money. Charging more than $2 for coffee should be a crime anyway. And I’m not talking about buying the sissy coffee type either; I’m talking just plain old coffee – black.

I’ve heard people say, "You could save a lot more money by making it yourself at home." It’s probably true, but that is beside the point. Buying it at the store is convenient (hence the term convenience store) and fast, and they actually have pretty darn good coffee.

Anyway, I know how much a 16 oz. cup costs at this place since I buy it there almost every day. So, this morning I grabbed the exact amount – 65 cents – from my change jar on the way out the door. I made the pit stop, went in and poured the coffee, and while I was standing in line, I reached into my pocket – two quarters, one nickel, and no dime – no dime in any pocket. So I put the change back in my pocket and pulled out a buck.

On the drive in, as I sipped my coffee, I thought that my premium coffee "boycott" and needing 10 cents more was very analogous to what has happened in most businesses and distribution operations over the past year or so.

Organizations have been forced to look at their budgets, cut out the premium stuff (as I did with my coffee), reduce waste, and trim costs wherever they can. And even now, they are still trying to find that last "10 cents."

So, how does that relate to Supply Chain Information Technology?

When supply chain systems are not configured or technologies are not used to their full potential, supply chain costs may remain inflated and service levels can be more difficult and costly to achieve.

You need to do an analysis of your organization's supply chain technologies to uncover cost reduction opportunities – both in terms of the overall supply chain performance as well as in technologies’ administrative costs.

Here are some questions you can ask of your own organization:

- How can existing systems’ functionality be better used to streamline operations?

- What performance metrics and tools best support the overall corporate objectives at the appropriate management levels for them to make better decisions?

- Are there practical opportunities to improve trading partner integration for timeliness and accuracy, thereby decreasing costs?

- Do the technologies effectively support corporate objectives for inventory levels?

- Are there opportunities to reduce technology administrative costs and overhead costs?

Today's business environment demands that companies optimize their technology investments and examine every opportunity to improve operating expenses while sustaining customer service.

You need to dig to find the hidden costs often buried in current systems’ configuration and processes.

Where is your dime coming from?

David Meyers

The ends of decades aren’t quite as good for reflection as millennium milestones.

But they’ll do in a pinch.

Remember the Y2K craze? Computer systems across the planet were going to crash and burn one second past midnight on December 31, 1999, plunging the world into chaos. Power grids would go black. Airplanes would drop out of the sky. Companies would fail as their core IT infrastructure became worthless piles of junk.

Well, it didn’t quite turn out this way.

Y2K made great press. It also gave software vendors a boost in making new sales. But as a disaster, it pretty much turned out to be a major bust.

One could attribute this to the foresight and diligence of countless IT departments and professionals who addressed a known problem in a measured manner with plenty of time to spare. But the normal replacement and upgrade of obsolete systems had something to do with it too.

Y2K’s roots were in an older generation of software and data structures. As the old gave way to the new, the magnitude of the problem diminished.

This doesn’t mean that some folks weren’t working right up to the stroke of midnight on vintage 1970s code. However, Y2K is still a great example of how flexible and adaptable the IT world is at addressing the known.

It’s the unknown that really tests the mettle of businesses and IT.

Roll back the clock to January 1, 2000. Who foresaw what the first decade of the 21st century would bring? We now worry about airplanes dropping out of the sky and companies failing for reasons that weren’t apparent in anyone’s crystal ball back then.

So as I wait to shout Happy New Year, I can’t help but wonder what’s next.

The prospect of the unknown doesn’t mean we are all flying blind. As anyone involved in demand forecasting can attest, the past and present can help predict the future.

We tend to view progress as a linear function, with some justification. What’s next in the supply chain information technology integration world can be discerned from the events of the past decade.

Despite the past worldwide recession, globalization is here to stay. The world will continue to get flatter and smaller from a supply chain perspective. Visibility, global trade management, and trading partner integration will play an increasingly important roll in successful supply chains.

Moore’s law as applied to the computing industry as a whole is still very much alive and well. The Internet, service-oriented architecture, mobile computing, voice recognition, and RFID all have made their mark on supply chain systems in the past decade.

But you ain’t seen nothing yet. The recession of 2008-2009 put quite a crimp in supply chain IT investments.

As the world recovers from the recession, IT as a strategic weapon that drives efficiencies in supply chains will be very much back in vogue.

I realize that I am being a bit light on details. But I don’t think I’ll find too many people disagreeing with these rather vague predictions. Given another 10 years, I’m not sure that any of us will be that shocked on how these trends play out.

But what about other developments? Sustainability for businesses, carbon footprint, and energy costs will matter to supply chains in the coming decade. How will supply chain systems respond?

Recent events drive home the importance of security in our highly interconnected world. What impact will this have on supply chain IT?

What else is lurking out there?

So as we count down the minutes to the New Year, let’s collectively wonder what’s next and party like IT’s 2009.

Happy New Year!

Tom Singer

Photo credit: hyperscholar

What are the most disruptive elements to supply chain effectiveness? With up to 80% of supply chain tied to external forces, it is external trading partners’ activities that often leave you highly exposed. 

In order to meld your partner’s activities into your supply chain management practices, a hosted trading partner management platform may be the quickest answer. Of course, this doesn’t apply if all of your processes are synchronized and you have full visibility and control. But I know very few to whom that statement actually applies.

If you’ve been thinking about opening up supply chain communications with your trading partners, the marketplace has broad and robust supply chain IT solutions that provide a valuable platform for securely exchanging the following key information: 

• Forecast;
• Order management;
• Inbound transportation and import/export considerations;
• Domestic distribution practices;
• Transportation to customer; and
• Performance measurement and improvement.

Linking partners in the supply chain can yield the highest level of improvement. It can also highlight the elements of the supply chain that truly need to be improved. Transparency begets understanding; understanding begets improvement. There is nothing like a comprehensive exchange among all of your trading partners (and your internal processes) to gain transparency to where the pains lie and where improvements are needed.

What makes hosted solutions, or SaaS (software-as-a-service), attractive in general is that they offer a solution set to a broad base and limit deployment headaches. They also make simultaneous application updates to a broad population, insulating the user from system upgrade risks.

In addition, SaaS is particularly attractive to the supply chain because it allows for modular deployment of ERP updates and supply chain execution systems updates with minimal risk to trading partner and product flow. When applied to data exchange with trading partners, SaaS is extremely attractive because it typically offers a flexible set of data integration standards (including web form data entry for the less sophisticated).

With the diversity of partners involved and the constantly-evolving maturity of data synchronization capabilities, we believe SaaS is a solid play for supply chain partner integration.

Tis the season to explore your hosting options. Let us know what you think about hosted solutions.

Happy Holidays!

Matt Wilkerson

Photo Credit: izik

The recent roll-out of Microsoft Windows 7, Apple OS-X "Snow Leopard," and three major Linux releases (Fedora, Ubuntu, and openSUSE) within two months of each other gave me an opportunity to step back and assess the state of personal-computer technology.

We have all become so accustomed to rapid changes in technology that I have not seen much written about a quite remarkable development; namely, that 64-bit operating systems have become a normal consumer-level product.

Each of the operating systems released in the past few months have a 64-bit version that can be installed as an option or, in the case of new hardware, comes as the default installation.

In addition, with the introduction of Windows 7 Professional and its "Windows XP Mode," the formerly business-class technology of virtualization has gone mainstream for the consumer.

I’ll use this week’s blog entry to explore the implications of these developments for the near future of the PC market.

For some perspective, I’ll take you back to the first time I encountered a 64-bit machine. The year was 1986 and I was working on computational aerodynamics at Grumman Aerospace.

We were given classroom training on how to program for the Cray supercomputer, which used a custom version of Unix as its operating system. The machine had a 2GB disk pack (a mind-boggling amount of storage back then) which was the size of two four-drawer vertical file cabinets stacked next to each other.

Now, of course, you can hang 2GB of storage off your keychain in a USB stick. But until quite recently, 64-bit machines were still the province of scientific research labs and other specialized applications, just as it was in the heyday of the Cray supercomputer.

The term "64-bit" refers to the size of the data registers and communications bus within the computer hardware. The advantage of 64-bit computing is in moving and processing large amounts of data efficiently within the computer. For most users this boils down to the simple concept of "much more memory."

Depending on the OS used, most older 32-bit machines can handle no more than 2GB or 3GB of RAM. On 64-bit machines the practical limit is your ability to pay for more memory – up to 64GB of memory can be easily supported by the current CPU and OS versions, with the theoretical limit set at 16 exabytes (two orders of magnitude more than terabytes).

For a sense of the scale of those numbers, consider that some studies cited on Wikipedia show that the entire Internet moves five to eight exabytes of information per month. So we are talking quite literally about consumer desktop PC operating systems with more theoretical RAM capacity than the total data-usage of the planet.

Clearly no home-user currently "needs" more than 3GB of RAM for even the most intensive video-editing or HD Blu-ray video processing.

So the natural question is, how will this extra hardware capacity be used? Because we know that if 64GB of RAM becomes inexpensive in the near future, someone will figure out a way to use it.

As it happens, the commercial server market has been using 64-bit operating systems and large amounts of RAM for several years. The servers deployed in these configurations support traditional "supercomputer" uses such as scientific computing and Hollywood special-effects video rendering, but the dominant application over the past several years has been virtual machines.

In this application, one physical server runs software that makes it appear to be several independent "virtual" servers (up to ten or more virtual machines on one physical machine). Each virtual server has its own OS and set of applications, which can be different from each other virtual server. The technology is used to reduce the hardware, energy, and administrative costs within an IT datacenter.

As mentioned above, Windows 7 Pro brings this technology to the home user who wants to run older Windows XP applications on a new Windows 7 computer. For example, my son plays a popular online game that has never worked well with Vista. Using Windows 7 Pro, I can set up a virtual Windows XP session for him to use.

The "Windows XP Mode" is actually a complete virtual machine running an independent copy of Windows XP. This development brings technology that was once the province of IT specialists and Linux hobbyists into the mainstream for the benefit, in this example, of peace between a 12-year-old and his XP-hating dad.

Even under that scenario, current new-model PCs have more processing power and RAM than even the most demanding consumer needs.

The commercial experience with virtualization points toward the possible end-user applications of all this excess hardware capacity. The "roadmap" for players such as Microsoft and Google is to use the new capabilities of 64-bit PCs to deliver robust, secure online applications within virtual machines hosted by a user’s own PC.

The first company to make this explicit was Google. In their roadmap for their Chrome OS, they describe a platform that will allow them to push services (such as Google Office) as downloads over the web in a much more robust and high-performance way than is currently possible with current web-browser technology. In fact, the plan is for the Chrome "browser" to be a set of virtual-machine environments that coincidentally look like a web page.

Not to be outdone, Microsoft has announced a "cloud computing" initiative named Azure. Currently aimed at businesses, you can be sure that Windows 7 factors heavily into the as-yet-unannounced desktop roadmap for Azure.

So in looking at the trends in computing, I can predict that the near future for desktop PCs will include end-user services that build on virtualization as a foundation, whether this is apparent to the user or not.

In a future blog posting, I’ll explore ways this might play out in the supply chain technology computing space.

Until then, tell us what benefits you have found by using a 64-bit operating system.

Paul Faber

All right. We’re all a good way into the economic hiccup and gearing up for the recovery.

Budgets have been cut. Locating financing for new initiatives is like searching for the leprechaun at the end of the rainbow. Forecasts and actuals are way out of whack, and many of our plans have not reached what we’d expected a couple of years ago.

We’re seeing signs that we may soon be swamped with demands to achieve volumes and service levels that meet or exceed those that we were dealing with before the downturn.

As mentioned in the last post, there is no silver bullet for across-the-board, world-class, or best-in-class transformation. But, there are some well-understood steps that can make a major difference in preparing the organization to meet the demands of the recovery and achieving a market-dominating position, depending on your current situation.

There are moves that can be made today to demonstrate a clear, positive ROI, and you can build a business case that’s sure to gain the thumbs-up from the executive suite. What we want to explore here is what these look like based on where you are today.

First off, take a step back and look at the IT that’s currently in place and perform an assessment. What IT investments have you made that either satisfied your needs or wound up short of expectation? Are there improvements that can be made or additional components that can be added to bring more cohesiveness to you supply chain or a better basis for handling the rapid changes that are right around the corner?

Let’s begin the IT assessment by looking at two areas in the supply chain IT spectrum: (1) Supply Chain Management and Planning and (2) Global Trade Management and Supply Chain Visibility.

1. Supply Chain Planning and Management (SCP/SCM)

This is the area that most often sees the largest "bang-for-the-buck" in regards to IT investment. Key areas to address for your SCP/SCM business are:

• Manufacturing (either contract or in house) – Capabilities for managing order quantities and frequencies, lead times, and relationships with manufacturers based on market competitiveness
• Inventory – Determining the best levels and positioning, especially any that impact costs and handling processes in other areas of the organization
• Product Importance/Prioritization – Meeting service levels and the organization’s overall priorities

The implementation of solutions to address these issues very often falls at the lighter end of the scale when looking at the IT wallet, but it does require a good deal of organizational coordination and acceptance. Introduction of improved IT (or better configuration of existing supply chain technology) in the area of demand forecasting, sourcing and procurement, and distributed order management, often yields return on the investment in a major way.

For some, there is little investment required as the solutions may already be installed or available on your own shelf.

2. Global Trade Management (GTM) and Supply Chain Visibility

This is another area that sees a great deal of return in a short time-frame in terms of IT investment. A bit deeper coordination (internal and external) than the SCP/SCM elements is required, because it typically involves external trading partners and the broader segments of the supply chain network.

The positive here is that the focus is on linkage and visibility in meeting existing service goals can very often be the driving business case element, more so than establishing new goals for the entire organization. Key areas for assessment and improvement include:

• Supply Chain Visibility – Are you proactive or reactive in regards to disruptions?
• Other Systems – Are you linking your GTM system (either in-house or provided by freight forwarder) to other systems for better status updates on distribution labor and transportation resources?
• Performance Expectation – What steps do you need to take to ensure freight forwarders and other trading partners are performing as expected?
• Import and Export Management Functions – Are these functions siloed, or are they being communicated with meaningful updates to the rest or the organization?
• Cash Flow – Is the cash-out to cash-in cycle capable of being shortened by improving the ability to address adjustments and by increasing the visibility of progress to satisfy demand? (By the way, cash flow, of course, is a major motivating factor for adding more effective IT solutions to address these needs.)

Time to deploy, cost to deploy, and return on the investment for these two areas are receiving a lot of attention – and rightfully so. They are the areas that provide for the coordination to address the broad needs of supply chain flexibility and setting a new standard for speed-to-market and customer service levels.

These well-aligned supply chain IT updates set a new level of competitiveness and ability to take market share. All of this can be achieved with relatively little IT spend as compared with other major supply chain initiatives.

So, finding your leprechaun (in other words, finding financing for IT initiatives) may take a little more than luck; it takes a firm business case that’s built with a solid assessment.

But, feel free to hold your rabbit’s foot or horseshoe while you’re working on it.

We’re interested in knowing your thoughts. What are you doing to prepare for supply chain IT investments? And, what would you like to know more about in this area?

Ciao for now!

Matt

Photo credit: little_frank

Here we are. It’s our first official blog post. As we move through the process of building the blog, whew, we realize that there are a lot of questions to answer.

To begin with, we’d like to paraphrase Ross Perot’s VP running mate from the 1992 presidential election, Admiral James Stockdale, who said, “Who are we, and why are we here?” 

So that you have a glimpse of how we came to be, we’ll give you a quick run down of our background. 

Tompkins Associates has been in the business of supply chain consulting since 1975. We’ve also been providing supply chain information technology (SC IT) services since the ‘80s, which makes us one of the most experienced SC IT consulting firms in business today and one heck of a good-looking team, even if we do say so ourselves.  

Some of Tompkins’ earliest projects were in the design of warehouses and distribution centers (DCs) so it’s easy to understand why our IT roots are in warehouse management systems (WMSs) and material handling integration (MHI). Not only did we advise our clients on operational best practices, but we were also able to support the design and implementation of the systems and supply chain technology that supported those best practices. 

As our medley of clients grew, our range of services grew to support them. No longer are we bound by the “four walls” (warehousing and DCs) or limited to the supply chain execution systems side of the equation. We’ve shaped up to support an emerging need for solutions like transportation management systems (TMSs), trading partner integration and collaboration tools, and now more recently, global trade management (GTM) systems. We even have our own homegrown Warehouse Control System solution, TCS (known as Tompkins Control System), as well as custom software development services. 

While our service offering has expanded in terms of the range of technology that we can assess, select, design, and implement, we are still one of the oldest (we’re not afraid to tell our age) and most well-respected warehouse management system and material handling integration firms in the US.

We’re always on the lookout for the next big thing. So now, as we see the demand and expectations for total supply chain solutions, we’re glad to be ahead of the challenge. 

It is with that foundation – and because of our commitment to our clients and to the marketplace – that we are kicking off this Supply Chain Information Technology Blog.  

Our main goal is to inform. But sometimes, if we’re not careful, we may actually provoke deep thought and heated discussion.  

Although IT is IT, when viewed within the context of supply chain, it has different nuances, complexities, and challenges than other enterprise arenas.  We hope our perspectives on SC IT will provide you practical value on topics that mean as much to you as they do to us. 

Meet the Supply Chain Information Technology Team

In this inaugural post, let us first introduce you to the Tompkins Associates SC IT leadership team. These are the guys who will be writing the majority of the posts. From time to time, we expect to have guest bloggers, but these are the folks you will get to know as you follow this blog – as we hope you will (subscribe to get updates when a new post is available here).

Don’t be shy. You can go ahead and say hello, if you’d like. We look forward to sharing what we know and hearing any thoughts or questions that you may have.  

John Spain is a founding partner of Tompkins Associates. He’s an experienced SC IT veteran (I mean really experienced) – been around so long his social security number only has three digits. And he can read barcodes with his naked eye. He has strong distribution operations and supply planning background in all fields and verticals. 

Paul Faber is one of the founding fathers of the Tompkins Control System (TCS); he doesn’t wear a funny wig though. He once wrote a program that was able to tell when a politician was lying – not surprising that it didn’t sell. He’s a recognized expert in RFID solutions and the application of RFID in industry. 

Kevin Hume is an expert at analyzing processes, systems and equipment for supply chain optimization and a pioneer in the field of Internet retail fulfillment. He took a lot of arrows back in the day, too. His Conestoga wagon is full of tools, tips, and tricks that turn the dangerous and dirty trails into 8-lane wide expressways for your supply chain systems projects. 

David Meyers is highly experienced in CPG distribution operations and pharmaceuticals (shipping them, not taking them), with deep knowledge about everything and anything even remotely related (through marriage or otherwise) to warehouse management systems. 

Tom Singer has been with Tompkins for more than 12 years, primarily with rolling out top-tier best of breed and ERP WMS solutions. He’s been working with distribution and supply chain applications for more years than he’ll ever admit. Tom is often quoted as an authority on auto-ID and voice applications in the DC, which is surprising given he is such a shy and retiring guy. 

Matt Wilkerson has extensive knowledge in enterprise application integration with best of breed solutions. (Sounds kind of like IT husbandry doesn’t it?) His systems architecture diagrams have even made the centerfold of Playgeek magazine. He’s a great IT strategy guy with the added benefit of being able to turn strategy into an executable plan.