It’s no secret that Tompkins Associates is a proponent of warehouse control systems. In fact, we have our own WCS that we provide to our integration clients: Tompkins Warehouse Control System.

I bring this up, because a recent client meeting reminded me of how a WCS can open up visibility into warehouse operations. This particular client is using our WCS to implement a multi-phase material handling equipment upgrade. The warehouse management systems' (WMS) interface to the WCS are expected to remain fixed while the MHE changes.

During the meeting, we finished the interface review and moved into a discussion of our operational data screens. As I finished a review of our standard screens, I asked the client team for input on any custom screens or reports that they might need to help them manage the DC. After a period of silence, they answered, "We will have to get back to you on that, since our current controls don’t provide us any data!"

It was a light-bulb-over-the-head, paradigm-shifting moment. Our client team realized that they now had the opportunity to "know what they didn’t know" (i.e., get visibility into productivity and throughput data to help them identify trouble spots and optimize their warehousing and distribution operations).

A WCS provides two important advantages over a traditional WMS/MHE controls integration:

The first advantage is that it hides the complexity of MHE interface details from the WMS. In essence, the WCS provides a uniform interface of data items to the WMS while dealing with the physical interface to the MHE. This was the feature that drove our client to select a WCS for their multi-phase warehouse upgrade program.

The second advantage of a WCS is that it provides real-time data to allow users to manage their MHE and warehouse operations. Although this feature can be provided by traditional controls, it is often overlooked. This operational data visibility is a powerful advantage to any organization (like our client in the story above) that has been struggling with an older low-to-zero information MHE controls system.

Tompkins has plenty of good company in regards to touting the advantage of using warehouse control systems in modern DCs. I recently came across an article that shows how Ikea uses a WCS to support uniform practices across its network of DCs. The article, linked here (http://logisticsviewpoints.com/2009/09/03/ikea-overcomes-warehouse-control-systems-islands-of-automation/), is worth reading for a complementary perspective on the topic.

The advantages of a WCS feed into a topic that is the essence of this blog: the topic of supply chain visibility. Any DC is an important link in the data chain that comprises supply chain visibility (or is in fact the origination point of the supply chain).

Warehouse Control Systems are an important tool not only to manage the DC, but to link the data within the DC to the overall supply-chain IT infrastructure. A well-implemented WCS begins supply chain visibility right in your own DC.

-- Paul

Take a step back and look at your supply chain. What do you see? If you were to draw a diagram to represent communication internally and with your suppliers, what would it look like? Are your communication channels so haywire that drawing a diagram of it seems absolutely impossible?

Do you think your answers to these questions correlate with the stability of your lead times?

Stabilizing inbound leads times is a sure way to gain positive results and serious efficiencies in your supply chain performance.

In the constantly expanding global supply chain, flexible sourcing needs to be complemented with real supply chain visibility and control in order to gain the competitive edge. Often product management, marketing or merchandising functions are not partnered with the related logistical review in evaluating forecast and pricing for products.

The bullwhip effect of demand variability and lead time swings (see more information on this effect from a report by the Tompkins Supply Chain Consortium) can offset the best laid plans. Also, when fluctuations to demand and sourcing complexities arise, getting everyone onto the same page how to handle the downstream impact is often difficult.

Where to start?

First, have an open internal dialog among product sourcing, logistics and IT. Make sure there is a common understanding on the movement throughout the supply chain and where the visibility elements may lie. Consider the suppliers’ capabilities for inventory management and manufacturing. Who are all of the parties involved in getting the product from source to destination?

Second, have an end-to-end walk through the supply chain – maybe for 2-3 key suppliers – to set the tone for the possibilities. What does the supplier do when you send the order? Are multiple orders accumulated to satisfy production efficiencies? Does what you understand as a minimum order quantity sync with the supplier? Walk through the essential logistical components – manufacturing site to outbound port, international shipment, inbound port and shipment to DCs or customers - de-composing the lead time into its multiple segments.

Third, assess how your internal IT systems support modeling the supply chain. Are there opportunities to better-represent lead times or make updates based on variable factors? Sometimes the updates might be a simple adjustment to existing practices. Other times, the updates may be justified by the addition of new supplier collaboration, trade management or order visibility tools – and just maybe, you have the tools sitting on a shelf ready to activate. Overall, focus should be on making sure everyone stays on the same page and knows the right way to manage.

Have you been able to walk the walk? What obstacles and discoveries have you identified?

-- Matt

Photo credit: D. Sharon Pruitt

When thinking about creating a collaborative supply chain, imagine that you are a conductor for an orchestra and are raising your arms, preparing the group to begin.

But when they group begins to play, you can’t make sense of the tune because each member of the orchestra is playing from a different sheet of music.

In this scenario, we learn that you have to do more than pull a group together and signal them to begin. You need to be prepared and make sure everyone is on the same page.

This is also true when in the process of a supply chain collaborative system selection or when implementing a collaborative supply chain: Having accurate information that can be viewed by all parties is ideal for good collaboration.

And for many organizations, an IT system may be exactly what they need to achieve a collaborative supply chain.

However, as with any IT systems-supported initiative that involves multiple viewpoints, there are risks that should be realistically formulated before casting the visibility and collaboration net wide for all to take part.

Before we take a look at the risks, let’s run through some core elements of the collaborative supply chain:

• Forecasts – Sales forecasts at the stocking unit and stocking location are valuable information for suppliers providing materials or finished goods. Visibility into the sales forecast is a great place to start. Ultimately, and depending on your own forecasting capabilities, involvement with suppliers in collaborative forecast updates is sure to yield future improvements in forecast accuracy.
• Sales History – This information is similar to forecasts in its value to suppliers. Sales history provides a basis for understanding how forecasts are developed and insight into past activity, which can further secure the supplier’s commitment to your forecast. Sources for sales history may be detailed point-of-sale data or may be a refined version that supports the forecasting process.
• Inventory on Hand – Visibility into inventory on hand provides yet another validation point for suppliers in understanding where their inventory lies within your supply chain. Understanding and managing inventory over time gives additional insight into typical product movement, which may not be evident in the sales forecast or sales history.
• Replenishment Needs – Communicating the replenishment needs to suppliers is central to any supply chain operation, and the need to collaborate in this area is ages old. Typically the transmission of the PO and the acknowledgement from the supplier are the key elements. Email, fax and paper-based operations are the lowest common denominator for many organizations, and moving toward electronic systems is often met with resistance. The more advanced offering that supports collaborative replenishment involves real-time communication of replenishment needs based on the supplier’s order quantity capabilities, followed by a timely acknowledgement that includes any adjustments and later provides an advanced ship notification which represents the shipment(s) that will arrive at your doorstep.

One important factor in acceptance of the meaningful collaborative supply chain is that the relevant, available information is accessible to the appropriate parties involved.

As an example, sending a supplier your sales forecast to a production scheduler via email is a positive step toward collaboration.

However, making that forecast available on a single platform that can be viewed by the supplier’s finance group, sales group, distribution center operations, and transportation providers ensures that they’re all referencing the same version and are planning or operating based on more than delayed or distilled information.

This type of open visibility and collaboration with the right channels is a tricky balance, but the downside of delayed point-to-point communications and related inaccuracies makes the more thoughtful balance worthwhile.

When opening up visibility to your suppliers and leveraging trading partners’ capabilities, there are also risks. These key risk factors include:

• Security of Information – Opening up to suppliers and logistics partners relies on IT systems that provide for data security. In addition, agreements to recognize the data as proprietary for parties involved in the collaborative process should be evaluated.
• Stability and Data Availability – Once the supply chain evolves into the collaborative model, reverting back to manual methods in the event of system downtime could be a considerable disruption. Ensuring system uptime and redundancy of processes is a must.
• Single Version of the Truth – Consolidating all of the elements of the collaborative relationship in a synchronized manner ensures suppliers and logistics partners are reading from the same sheet of music. The flip side of this in terms of multiple point-to-point communications can lead to chaos.

We’re interested in knowing your thoughts on these risks and benefits, as well as what you might be doing to further the collaborative supply chain. Looking forward to your input and comments.

- Matt

Photo credit: Monica Liu

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

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

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

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