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

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

Having spent the last 22 years working within the supply chain logistics arena and helping clients work through the strategy, selection and implementation aspects of supply chain software, I’m frequently asked:

"What do companies often do wrong when evaluating and selecting supply chain logistics technology software?"

This is an interesting question, because although it has been consistently asked over the years, the answer has changed, as both the software and underlying technology have matured.

Ten years ago, software selection required significant effort, looking into functional gap analysis, vertical market penetration, scalability, extensibility, etc.

The typical product offering was, for example, warehouse management with an alliance offering for transportation management or other supply chain execution systems – times have changed.

Don’t get me wrong. You still need to sweat the details in the traditional areas of software evaluation-selection.

However, software providers have done an admirable job of building best-practice driven, configurable products, significantly reducing the need to modify support for most warehouse operations.

As a result, you may find yourself at the end of gap analysis with little difference between competing software products.

In many cases today, an evaluation strategy that relies upon functional fit as a solution differentiator can result in a futile exercise of picking a specific gray cat in the dark.

Your evaluation-selection strategy must adapt to the maturity of the market and identify key criteria beyond the traditional gap analysis in order to shed more light and discover the real color behind those gray cats.

Two areas that will help differentiate offerings beyond functional fit include:

1. Clearly define the scope of the solution.

The footprint of the traditional Tier 1 WMS vendor has evolved far beyond the four walls of a distribution center over the last 10 years. The expanded reach/footprint of supply chain logistics technology providers now ranges from demand planning/forecasting from the enterprise side all the way down to last mile visibility to confirm a shipment at the customer’s doorstep.

As a result, the perceived value of a particular software offering can be dependent upon the perspective or background of the person/team providing input to the evaluation.

Thus, it’s critical to define and engage a steering committee that represents cross-functional leadership and make sure the steering committee has a clear understanding of the elements that drive the underlying business case for the software selection.

Also, be sure the team clearly defines the elements of each supplier’s product that are in play or out of play before you begin the evaluation process.

The rub here is to clearly define how much of a software vendor’s footprint you intend to leverage over the life of the software product. Most importantly, ensure the steering committee’s vision is consistent with that of the executives who will ultimately approve the investment and resources needed to implement this system.

2. Perform a cultural comparison.

Consider the cultural aspects of your organization and compare them to the traits of the software providers under consideration. In essence, find a DNA match between your organization and the software provider.

For example, does your organization have stable logistics business process requirements, or are they dynamically driven by customer service demands and/or the needs to grow the business? The answer to these questions will drive the magnitude of value behind aspects like functional fit and product adaptability or scalability.

Are the skill sets and staffing levels of your IT organization more characterized as a maintenance group, development staff, or both?

The answer to this question is critical to understanding your reliance upon the software supplier in the future if/when needs arise to support new business requirements. How will this be reflected in the comparison of projected total operating costs for each supplier?

Recognizing the underlying characteristics of your business processes and IT staffing-strategy is a key component to a successful supply chain logistics technology selection. Mismatches between the customer and software provider in these areas typically result in poor implementation performance, unfulfilled expectations of efficiencies, and ultimately higher than expected total operating costs.

Today, a successful evaluation-selection process requires:

• A clear, consistent view of the solution footprint and evaluation criteria;
• A diverse, multi-disciplinary team that is capable of evaluating the entire footprint; and
• Recognition and comparison of company and software provider cultures.

Focus effort in these areas and you will begin to shed some light on those gray cats, as well as improve your ability to differentiate the ‘real’ value proposition across competing supply chain software products!

Kevin Hume

Photo credit: Larry Page

Rate your collective experience with software sales reps. How honest have they been on a scale of 1-10, with 10 being absolutely honest and 1 being a total sleaze bag? Think of the used car sales rep and "We’re dealing" when you think of a 1.

In all fairness, this exercise is not intended to prove that the average software sales rep has the scruples of a politician.

Many enterprises view their key software vendors as strategic partners and the vendors’ account managers as integral to the relationship. As a general rule, I don’t believe that supply chain software firms engage in deception as a sales strategy.

The potential fallout from sub-performing implementations is just too great of a risk. Personally, I think that supply chain software reps are more honest as a category than most other sales professionals.

However, I won’t be surprised if a fair number of folks rated TV pitch ads as more believable. Some of this negativity is due to circumstances beyond the control of the salesperson.

For example, a project may go south due to poor vendor delivery or client execution. And, although the sales rep played it straight during the sales cycle, he or she may be considered guilty by association.

But I have to believe that a lot of this skepticism would come from people who felt they were sold a false bill of goods during the sales process. I have seen too many vendor proposals and responses that promised more than they could deliver.

Of course, any successful sales professional plays to win. Would you really want to buy a mission-critical application from a vendor that employed only brutally honest sales reps? I don’t think so.

Viability typically matters too much when selecting a software vendor. If a vendor isn’t willing to occasionally stretch the truth in pursuing sales, how successful will they be?

I’m not suggesting that it makes sense to seek vendors who employ pathological liars as sales representative. I’m only stating the obvious.

We expect software sales reps to aggressively spin their wares and package their message in pursuit of the ultimate prize. We realize that the truth may get twisted as part of this process.

This is why it is an accepted best practice to put structure around software selections. We document requirements, issue RFPs, rate vendor responses, conduct scripted demos, do site visits, and check references.

This helps, but it can’t guarantee complete honesty. It doesn’t eliminate the potential for over-promising and under-delivering.

At the end of the day, our selection process relies on words. And words are always open to interpretation.

We set up processes to validate vendors’ responses, but we also provide incentives that can implicitly encourage vendors to play loose with the truth.

The best we can do is to minimize the risk by doing a good job on our due diligence.

Solid contracts, project management and project teams are principle weapons to combat sub-performing projects.

But if we accept an offer that is really too good to be true during the sales process, then we have huge problems that will haunt us throughout the delivery phase.

Skepticism and disbelief cannot be the basis for any successful software procurement process. Trust must come into play as you proceed toward signing a contract.

However, trust needs to be accompanied by verification. So, how do you keep your vendors honest?

I think we all have a lot to learn in this area, so let the comments roll.

Tom

Photo credit: Emilio Labrador