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

I was doing some catch-up reading on a plane recently and came across a thought-provoking piece by Gartner, a top industry research firm. My mind started to wander after I read and thought about the firm’s 2009 special report, Hype Cycle for Supply Chain Management.

The comment from the report that really had my mind spinning was:

"The common characteristics from the traditional focus of supply chain have been around the portfolio of business processes that make up SCM (Supply Chain Management). ... However, the key learning that has recently come out of this era of economic volatility is the increasing value of information in a supply chain context (for example, the use of Six Sigma in the supply chain has highlighted to companies the need for data to support improvement efforts, as well as the general lack of readily available relevant information)."

I think the report is trying to say that if you want to run a good supply chain, you need to design good processes, and you also need good information about what is happening. Well, of course, that makes perfect sense.

But just in case you’re not into research speak, or if you’re new to the IT and supply chain software game, let me break it down for you.

The "portfolio of business processes that make up SCM" is just a fancy way to describe the variety of methods that you allow you to do the required things to move your product and information through the various steps in the supply chain.

The reference to the "increasing value of information in a supply chain context" just means that in good times and in bad times supply chain information is important. In volatile times – up or down – it is even more important.

When I saw the comment regarding the "general lack of readily available relevant information" it made me think: Do most companies have a good supply of irrelevant data? Probably so.

And the mention of Six Sigma suggested, to me, that without it, most folks wouldn’t know they needed data to support improvement efforts. Six Sigma is definitely a great strategy and objective. But you shouldn’t have to be a black belt to employ common sense or self-defense, should you?

In reflection of Gartner’s research, I came back to a recurring theme that I’ve found in many of my projects: It’s not brain surgery or rocket science; it’s mostly basic blocking and tackling.

So, having good information is not the answer - only the beginning of the answer. To have real value, the information must be able to be applied to processes that allow us to respond and make good decisions. It is not just about information. It is about good processes and good information working together.

You might say, "Well, OK, but what are good processes and good information?"

Good Supply Chain processes (Plan-Buy-Make-Move-Store-Sell) allow you to operate with a supply chain strategy that provides for great customer satisfaction at a minimal total delivered cost.

Good information consists of accurate supply chain visibility into supply and demand and the related costs. This includes knowing the answers to the following questions:

Supply (or Inventory) Data – How much do I have on hand? How much is in transit? When will it arrive so that I can ship to my customers? What method of transportation is utilized to get it here? How much is backordered? And what is needed/planned/forecasted for future periods?

Demand (or Customer Order/Shipping) Data – What have my customers already ordered? What do I plan to ship to my customers in the future? How much of it? When should they expect to get it, and by what method of transportation?

Supply Chain Costs - What are the costs as product moves through the "Plan" to the "Sell" processes (purchase price, transportation charges, customs, duty, taxes, etc.)?

This is it, simple. Why do folks try to make this so difficult? Let me know what you think.

David

Photo credit: mansionwb