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The @Risk blog (an excellent blog, by the way) has an interesting article asking "Do you have a Supply Chain Risk Management Process in Place?" According to a poll conducted during Aravo's supply chain risk webinar series, 71.4 percent of those polled said their biggest concern continues to be risk of supplier viability. Yet another study highlighted in the article shows that when companies decide to outsource only 10% actually perform a risk assessment. The remaining 90% focus only on unit cost, transportation and inventory impact.




So…let me get this straight. 70 percent of people say supplier viability is their biggest risk…yet only 10% of people do a risk assessment when analyzing outsourcing. Huh...go figure.




So let's take this back to the beginning and look at the outsourcing process. This process for the most part is expensive, time consuming and difficult. You decide you want to outsource your manufacturing process. The goods being outsourced are your best selling products. These are worth millions to you. You find a supplier, negotiate a great price and terms and you make the deal. Then you move tooling and design specs, spend weeks, maybe months getting the manufacturing processes up to speed. You work though the logistics process of moving goods from your CM (typically oversees) and finally, after months of effort you have a stable supply of goods coming from this CM.




There is a LOT of effort involved in this process. And yet, according to the study above, only 10% of companies going through this process take the relatively small additional effort of doing a risk assessment!




Imagine for a second that you have just completed the outsourcing effort I described above. You've received your first shipment of goods from your CM and are expecting the next shipment to leave the factory in a few days. Your phone rings…the CM has just declared bankruptcy and has closed their doors. Oh **** (insert appropriate expletive). What about that shipment that was just about ready to go? Where is it now? You've got customer's waiting for that shipment. What about that special tooling that you shipped to the now defunct supplier? How are you going to get that back? Are you going to get it back? How long will it take to get new tooling made? How long will it take to get another supplier set up? Is the bar open yet??? Why didn't we look into the financial position of this company before we entered this agreement?!?!?!?




So…obviously, we don't want to find ourselves playing out this little scenario at some point in our professional lives. How do we avoid it


  1. When outsourcing, include a risk assessment along with price, terms and inventory analysis. Make sure that the risk analysis includes financial information. If the company is public, this is easy enough to get. If the company is private, it will take more work but is usually do-able.
  2. Maintain your risk assessment. If the last 2 years has taught us anything, it is that companies that may seem fine when times are good can crumble to dust when things go bad.
  3. Establish mitigation strategies. Even a financially strong company can succumb to disaster (the earthquake in China a while ago is proof of that).
  4. Improve your ability to respond. Put the tools, practices and people in place to allow you to recognize an event and respond quickly to it. For details on capabilities need to respond quickly to significant supply chain events, check out a post I wrote about this last year.




What sort of risk assessment do you do when outsourcing? Comment back and let me know!



Originally posted by jwesterveld at

I was recently in conversation with someone who's company was struggling with lumpy demand, and he asked the question 'what is the best system for demand management?'. Well, the answer depends on what exactly he's looking for. This may mean taking a step back to understand why demand is so lumpy and thus, what are the capabilities that would help.


Here are some points for consideration:


Perhaps a statistical forecasting package that could produce a more accurate forecast based on historical demand patterns is enough. I would suspect otherwise though. With things changing so fast, historical demand aloneis an unreliable predictor of the future.


Would aggregation of multiple demand inputs take out some of the bumps? If so, then a collaborative demand planning system could be considered. This system would capture various inputs, (such as sales projections, marketing projections, management judgement, and possibly a statistical forecast) to develop a single collaborative forecast that would provide a more insightful view of the demand picture. But here's the catch, in today's volatile marketplace, your plan will never be 100% accurate. While you might be able to reduce forecasting error, better planning isn't going to reduce demand volatility.


So if you can't accurately plan demand, then you need to respond to it. That requires you to:


-  Detect changes in real-time between the actual demand and your forecast,

-  Change your supply plans in response to those changes, and

-  Revise your forecast when appropriate.


But is this type of supply chain response agility enough? Is improving customer service levels while reducing inventory risk in the face of volatility an urgent need? If so, having the following capabilities can have significant impact on your performance:


-  Determine target inventory levels and resulting replenishment plans in order to handle the "lumpy" demand.

-  Detect when your inventory at various locations is in excess of current needs, especially if there is a shortage in that part in another location.

-  Link replenishment to satisfy demand with your supply side planning to determine viability of potential changes.

-  And when your supply simply can't satisfy the demand fast enough, allocate the supply to particular orders or distribution channels, possibly based on a combination of fair share, equal share, and priority schemes.


That leaves just one more question: What types of users do you expect, what actions and decisions do you expect them to take, and how do you expect people to interact with the demand management system?


In answering some of these questions, one might find that what they thought they needed would only cover some of the total demand management picture. So, it comes down "what are you really looking for?"


Originally posted by dklett at

I came across a great blog post by Atul Chandra Pandey from Infosys titled "Y2010 & Ahead — value chain trends in emerging economy" in which Atul emphasized the following trends in the first part of a 2-part series:


  • Customer side equations will take prominence over rest of value chain
  • Supply chains will get more integrated with marketing and service chains
  • Speed and responsiveness will be key drivers for spend on new initiatives
  • Cost will continue to play critical role in decision making
  • Asset Management will gain more prominence and will help in accelerating "green" initiatives




I responded to Atul in the following manner:



We too are experiencing that prospects and customers are focusing a lot more attention on customer satisfaction as it pertains to on-time delivery of orders, but also to the enquiry-to quote and quote-to-order processes.


I couldn’t agree more with your third point about speed and responsiveness. Overall the trend we are observing is that consumer behaviour is pervading B2B transactions with ever shorter lead times. Coupled with the adoption of Lean and postponement strategies, companies have to be very responsive to changing demand, blurring the lines between planning and execution. These are the business drivers for your third point about agility and responsiveness.


Cost will always be a driver in supply chain management. If we adopt any of the Lean concepts it should be the elimination of waste. All too often I come across situations where the information and decision lead time exceeds the physical lead time to manufacture and/or deliver the order.




But this got me thinking about several other reports and observations that have come across my desk over the past 12 months.




First and foremost must be the article by Dan Gilmore at Supply Chain Digest highlighting the work done by Supply Chain Digest's research arm CSCO (Chief Supply Chain Officer) Insights. There is an excellent report titled "Next Generation Supply Chain Management: Integrating Planning and Execution" available from this link. (Subscription required). In the article, Dan Gilmore observes that "For many years, analysts and others have offered separate models of 'supply chain planning' and 'supply chain execution' processes, and the technology vendors were generally organized in that sense as well. You can find many diagrams that show hierarchical planning processes with no connection at all to execution, for example. The report argues, and the research supports, that this gap must be closed from a process perspective to meet the challenges of today's supply chains." I added the bolding because this is the key to being able to provide the speed and responsiveness to which Atul at Infosys refers. Not only that, but also managing to contain if not reduce supply chain costs will depend on being able to reduce this gap between planning and execution.




Traditionally we have used inventory to buffer against what we would like to happen (the plan) and what actually happens (execution). But this is no longer possible. As the graphic below illustrates, as long ago as 2004 postpone strategies had pushed much of the inventory up the supply chain to the suppliers. They too have adopted Lean and postponement strategies, leading to even lower inventories. And then there is the effect of the recent recession. Nearly all the OEM's I speak to are struggling to secure supply of components, clearly indicating reduced inventory levels in the suppliers. I wish I had equivalent inventory figures for 2009. Anyone willing to provide these figures?





Then there is the excellent blog written by Lora Cecere recently titled "Tackling the Black Hole in the Center of Your Supply Chain" in which she states "We now know that fixed data integration, one-dimensional rules mapping, and traditional master data techniques from ERP to Supply Chain Optimization are insufficient. As a result, plans are created and consumed in isolation, and transactional systems hum along with little– to no — guided intelligence." So as the speed of business has increased — some would describe this as volatility — the supply chain systems have not kept up.




And most of the information is now external to your organization. Companies have being trying desperately to get point-of-sale information to get early trend analysis of sales. At the same time, many brand owners have largely outsourced manufacturing, not only lengthening the physical supply of goods, but also the time and effort it takes to make a decision. All of these factors are only making the gaps between planning and execution even wider. But the business need is to close this gap; to respond to demand changes quickly and effectively. As Lora Cecere, states, the solutions from the 1990's have not kept pace with the business needs. Throwing more ERP at the problem isn't the solution. At their heart, all ERP systems are essentially accounting packages. They deal with your data — financial and operational — but provide very little help in dealing with the majority of the information, which now exists outside of your organization.




What are your thoughts? Do you experience this gap? Are your systems able to cope. Will your next breakthrough in performance come from learning to plan better, or learning to respond to plan variance? In other words, closing this gap between planning and execution. Robust debate encouraged.



Originally posted by tmiles at

Just a final reminder that SCM World Live 2010, the free-to-attend virtual event for cross-industry global supply chain executives, will be taking place this Wednesday, February 24th.


John Sicard, an EVP here at Kinaxis will co-present alongside Dr. Hau Lee of Stanford. They will be speaking to the timely topic of how organizations can manage supply and demand and implement immediate response to supply chain challenges.


Other scheduled conference presentations highlight critical supply chain topics including supply chain visibility, lessons learned in the downturn, the supply chain of the future, simplifying the supply chain and supply chain collaboration.


To register for this free event, please visit:

Originally posted by lsmith at

I've been thinking about this post for some time. I'm a Toyota customer. Our family has owned four Toyota Corolla's over the past twenty years and we've always been very happy with them. Our most recent purchase, a 2010 Corolla S, has been a great car for my daily 160 Km (100 mile) commute. With a fuel mileage of 5.6 litres per 100 km (35 mpg) on the highway, I'm not cursing the oil companies with the vehemence I once did. On the other hand, this is the first time I can recall in all the years that we've owned Toyotas that I've had to deal with a recall. And so far, I've had two (brakes, accelerator pedal)…with a possible third (power steering?) rumoured to be in the works.


The Toyota quality problems have disappointed me. I learned about the Toyota production system when I was studying Industrial Engineering in college. At that time, it was held up as the future in manufacturing -a model that other manufacturers around the world should follow. It still is. At Toyota, defects are considered to be MUDA (waste) when they occur, the root cause is found and eliminated. This is the cornerstone of their system. Since then, my studies in lean manufacturing have taken me deeper into the Toyota manufacturing system and my faith in the quality of their products has only improved.


I expect better from Toyota…and I suspect Toyota feels the same way.


Toyota has made mistakes: first the error that caused the problem in the first place, then the shoddy handling of the first incidents (which could be the result of disbelief that the problem could be caused by a manufacturing defect). They seem pretty confident now that they have the problem figured out. Let's hope so.


What got me thinking is this… Here is this vaunted company, renowned for the fine quality of its products, with systems specifically designed to prevent quality problems from happening and especially from getting out of the factory. Yet, this company is running into some serious quality problems.


Think about Toyota and their processes. Think about your company and your processes. Which company do you think would be less likely to run into this type of problem? What processes do you have in place to ensure that this doesn't happen? Here's something more interesting. On February 1st, Toyota announced that they had figured out the gas pedal problem. On February 11th, I had my car in for an oil change and they told me they had the kit to fix the accelerator pedal so they would do that while my car was in. Toyota had the parts to address the sticking pedal recall days after announcing the fix. How long would it take your company to respond?


I'm not trying defend Toyota. Like I said, they made mistakes — and it's costing them. What I'm trying to do is to have us learn from what Toyota has done wrong, and from what Toyota has done right. Who knows… The next time it might be your company facing a problem of this magnitude. Will you have the capabilities in place to respond?


What do you think?

Originally posted by jwesterveld at

By the 'twenty-tens' I'm referring to the decade that has just begun and for which a colloquial name has not yet been coined. I feel that it's going to be an interesting decade for enterprise software because we are going to witness the fallout from the failure of big ERP vendors to make software that addresses the modern-day challenges of this decade and beyond. The last two decades are sunk. Now, it's time to move forward.


In my first post to this blog, I want to point out three table stake capabilities that ERP vendors have failed to provide. I've been with Kinaxis forfour weeks and have been immersing myself in the world of supply chain and S&OP trying to figure out what really drives organizations to improve their supply chain. In talking to my colleagues, which include some of the world's most knowledgeable supply chain experts who work side by side with some of the world's best run manufacturing companies, I've learned that customer service is at the top of the list.


In these volatile, post-recessionary times, manufacturers need to know when a customer order is at risk, and then they need to figure out fast how to course correct. Unfortunately the solutions in place — at one extreme, error prone manual spreadsheets, or at the other extreme, multi-million dollar ERP modules — can't offer the following capabilities:


1.SPEED. When a customer calls you with a potential order, how long does it take you to get back to them with a promise date? Increasingly, customers will want feedback in a matter of minutes — not hours or days. If you're saying to yourself "That's impossible." Well, it is possible.


2.RESPONSIBILITY ASSIGNMENT. When an unexpected event puts orders at risk, do you know who to call? How many steps are required to understand and rectify the situation? Being responsive to keep a customer order ship date on time requires an immediate response whether that be to an internal resource or external supplier.


3.ONE VIEW. As you rely more heavily on outsourced manufacturing and suppliers, it becomes increasingly difficult to see and coordinate your supply chain from beginning to end. A 'twenty-ten' supply chain solution must be able to provide visibility across sites and suppliers.


The last capability might not stand up to the argument that it cannot be found elsewhere because given enough time and money, anything is possible. However, most manufacturers don't have enough time and money to continue down the ERP path. Business leaders have realized that now it's time for something different. It's going to be an interesting decade.

Originally posted by lvezina at

We are having some fun on our Supply Chain Expert Community - come join in!




For the month of February, we are inviting community members totell their personal stories of sudden supply chain chaos for a chance to winan Amazon Kindle. And really, who doesn’t have a story!




What’s the craziest, unexpectedsupply chain eventyou’ve ever encountered? Do you remember a time when you thought ‘there is no way we’re getting out of this?” How about describing a day, where at every turn, you were faced with some crisis?




Come share….come vent… come bond!




If you aren’t already, register as a community member (don’t worry, it’s fast and free). Once registered,start a new thread on the discussion board (under ‘Discuss Supply Chain’ navigation button).Post your supply chain tale.




During the first week of March 2010, Kinaxis will select the top 25 stories, then community members will vote for the winners. (You can rally members to vote for you, and invite your colleagues to do the same.) The 10 stories with the most votes will win Amazon Kindles! (All the details are here)




Have fun!



Originally posted by lsmith at

The latest edition of IndustryWeek's Manufacturing Business Challenge has been published.




This month's challenge discusses a multinational manufacturer of engine and transmission components that is starting to get pressure to show its green/sustainable practices, including their management (i.e., reduction) of carbon emissions. As a result, they are trying to figure out what tools and practices they will need to succeed in this new green world.




We were very fortunate to have a contributed solution to this case-study challenge by Frances Way, Head of the CDP Supply Chain Program at the Carbon Disclosure Project (, an independent not-for-profit organization that holds the largest database of corporate climate change information in the world.




What would be your recommendation to the challenge as described below?




First, let me say, that I had been a little skeptical about global warming and other environmental issues. But, over the years, I’ve gradually seen the evidence build. As a person, I’m concerned. As a CEO, I’m concerned for my company. Treest Power is a multinational manufacturer of engine and transmission components for industrial and consumer equipment. I see the growing awareness of carbon emissions in the public sector swiftly moving into the industrial sector, and there are reasons for Treest Power to act now.




While I have been awakened by the environmental data and evidence, many in my industry still have their heads in the sand. Going green, or whatever you want to call it, is more than just a good thing to do. If Treest Power approaches this strategically and quickly, pulling in our critical supply chain partners as well, we can get a jump on our competitors and capture a growing market of environmentally conscious customer firms. I believe emerging government incentives and stimulus spending will suddenly wake many in my business, so I’d like to get the headstart.




In addition, Treest Power is beginning to get pressure to show our green/sustainable practices, including our management (i.e., reduction) of carbon emissions. Four of our largest customers have asked for documentation on our green practices and the green practices of our supply chain so that they can prove and promote to their customers the greenness of their products. While none of the companies have specifically asked us to make changes, the implication is clear: get on board. This is the push we need as, I believe, eventually industry or government regulations will dictate what we need to do, and I’d rather not be scrambling to meet these mandates — or not meet them and be in real trouble.




How can Treest Power begin taking the necessary steps today to better understand the issues and opportunities that await as we transition from old world to green world? What tools and practices will we need to succeed?




Here's what we said...



Originally posted by jnafis at

I participated recently on a Future Pharmaceuticals podcast titled " Responding to Change and Cycle Time Reduction" with Walter Kittl (Siegfried-USA), Philippe Cini (IBM Global Services), and Zach Pitluk (Proveris Scientific) which was hosted by Reid Graves (Merck). One of the questions was: What should senior mgt within the pharmaceutical/biotech industry do differently to realize rapid improvements in managing their supply chains? Is there enough collaboration, sharing of best practices, awareness, and education?




The key point I stressed in my answer was to bring in fresh ideas from other industries. Drug companies, specifically the pharmaceutical companies, have enjoyed very high gross margins — often as high as 85% — for many years based upon patent protection and good portfolios of new drugs coming to market. This has led to the slow adoption of Lean principles and little focus on supply chain innovations and efficiency when compared to other industries, particularly high-tech/electronics or consumer packaged goods. These industries experience much lower gross margin, sometimes as low is 10%, meaning that their supply chain operations have to be much more efficient. Some key metrics, averaged over the last 4 quarters, that illustrate the differences are below. Notice the considerably longer cash-to-cash cycle, largely due to much higher inventory levels.


Company NameCash-to-Cash (Days)Days of InventoryRev/Emp ($1,000)Gross Margin
Apple Inc.-761,14536.00%
Research In Motion78281,12342.60%
Alexion Pharma54046270389.00%
Amgen, Inc.40036287685.50%
Eli Lilly & Co31427352282.40%
Endo Pharma135961,16874.70%
Genzyme Corp21914542071.00%
Merck & Co18914042476.40%
Novartis AG22619342971.10%
Pfizer Inc.32726557385.70%




Telling an industry that they need new ideas is not always the sure way to a long term future in that industry.




Thankfully, I came across an article in the Wall Street Journal about the new CEO at Novartis, one of the largest drug companies. (A subscriptionmay berequired to read the full article.) As per the WSJ, Joe Jimenez "has led Novartis’s largest division - its prescription-drug business - for the past two years, overseeing strong growth. He joined Novartis in 2007, having spent most of his career at HJ Heinz Co., Clorox Co. and ConAgra Foods Inc."




These are all consumer packaged goods companies. To quote the WSJ, Mr. Jimenez called the food business a “leaner industry” that was better at responding to changes in the marketplace, including changing consumer preferences. “Margins are lower and the time with which you have to move is quicker,” Mr. Jimenez said of the food business. “The pharmaceutical industry in the past has not been focused on taking out non-value-added cost because the growth has been very good,” he said.




So there might be a future for me in the pharmaceutical industry after all.




More seriously, the business drivers for the increased focus on supply chain efficiency are directly related to the product portfolio performance. Many of the larger companies are reaching the end of the patent period on their stronger performing drugs and do not have drugs coming though the development stage that will replace the older drugs. Another contributing factor to an increased awareness of the importance of greater supply chain efficiency is the debate over healthcare reform in the US. In addition, there has an increase in the competition from drug companies in the so-called BRIC countries (Brazil, Russia, India, and China) especially in generics. Although these countries are less of a factor in the prescription drug business at the moment, they are likely to be a much bigger factor in this part of the business over the next 5-10 years.




What do you think? Will the pharmaceutical industry transform itself internally, or will "fresh blood" be needed?



Originally posted by tmiles at

Today we announcedour free Supply Chain Performance Benchmarking service (more on that below), so it seems an apt time to discuss the issue of benchmarking.



I wrote a blog postrecently about how to use supply chain KPI's to assess, diagnose, and correct supply chain performance, and the importance of benchmarking against your competitors. In my blog I referred to a post by John Westerveld in which he comments on visibility titled " Visibility in the supply chain: What you can't see can hurt you", making the point that visibility and performance management are tightly linked.




It is always good to get validation of one's ideas. Well, I listened to a webinar hosted by Supply Chain Standard in which the registrants were asked what visibility means to their organization. Most of the respondents replied that it was to obtain "End-to-End supply chain performance against key performance indicators". A point made by Mawgan Wilkins of Cisco (Cisco is one of our customers) is that in today's supply chain in which outsourced manufacturing is prevalent, most of this information does not exist in the organization, but rather external to the organization. Yet so much of your supply chain performance is dependent on how your contract manufacturers perform.If you don't measure it you can't manage it.




Measuring performance is valuable in and of itself, but knowing how your performance compares with your competitors is crucial to determining where improvements are required. Not knowing how you compare against your competition is a "fool's paradise". There is no way to assess the health of your supply chain without knowing how you are doing against your competitors. Being able to track the KPI's over time and see how they are trending against your competitors is crucial to both determining when negative or positive trends are developing, and in being able to drill to more detailed metrics in order to diagnose the cause.



Correcting the issue requires an even deeper dive into operational KPI's. What I find interesting about the graph above is that the more operational aspects of visibility are given a lower priority. I think this an issue of supply chain process maturity. What I mean is that of course performance management is the most important aspect of visibility when you don't have any visibility. However, I contend that once companies are able to measure supply chain performance, their instinct is to improve, or correct, their performance, which is where the other elements of the survey become more important: global view of inventory, consolidated view of demand, etc.




We are proud to announce that we have developed a free benchmarking service that uses publically available data extracted from the submission of financial statements. Clearly the KPI's that we can generate based on the financial statements are focused on the “Assess” and “Diagnose” levels. The operational KPI's required at the “Correct” level typically use data that is not available from financial statements.




Since we focus on manufacturing industries, there is a graph available in the benchmarking service that compares companies on the elements of cash-to-cash (C2C) — days of sales outstanding (DSO), days of inventory (DOI), and days of purchasing outstanding (DPO) — and return on net assets (RONA). The C2C elements are represented by inventory turns and the ratio of DPO/DSO. Even though many companies have outsourced manufacturing RONA is still a good way of comparing companies on the presumption that a company that outsources a lot should have a higher RONA. In the graph below we are averaging these value over the past 4 quarters. As is usual with these types of graphs, top right is "good", bottom left is "bad", and big is better.






What is interesting is to compare how this changes over time. The graph below shows the values for the previous quarter.





To view how these values have changed over longer periods, a different graph can be used.





Yet a different graph can be used to drill down in to the C2C components in order to start the Diagnose phase. If we look at Eli Lilly as an example, clearly they should focus on inventory in order to reduce C2C. On the other hand it is quite clear that GlaxoSmithKline has been able to negotiate much more advantageous payment terms with their suppliers giving GSK a clear competitive advantage.





We would really appreciate your feedback, so please go to our supply chain expert community to try it out.




In order to use the free benchmarking service, you will need to register as a community member.




Once you have registered, click on " Benchmark my Company” from the menu bar on the left.




When you click on the benchmarking service, you will be taken through the configuration of the benchmark groups of interest to you — Peers, Customers, and Suppliers are created for you by default — and select from the 30-odd KPI's that are of specific interest to you.



Originally posted by tmiles at




As many of you might know, we launched the Supply Chain Expert Community about six months ago, and since then the community has quickly built a strong following with over 1,400 members and continues to grow daily. Today we announced its recent transformation, whereby the site now boasts a sleeker look and feel and, most importantly, new content, added functionality and easier navigation.




Here are some highlights on the additions:


  • The community has expanded its blogging component to feature regular third-party industry bloggers. You now have a central place to read multiple thought-leading blogs, including those of:




Lora Cecere of Altimeter Group (formerly of AMR Research)
Bob Ferrari of the Ferrari Group& author of Supply Chain Matters blog
Joshua Greenbaum of Enterprise Applications Consulting (EAC)& author of Enterprise Matters blog
Jan Husdal of (supply chain risk strategies)





  • A new Benchmarking Service is now available to all registered members of the community. This service provides a wealth of information for companies looking to benchmark their supply chain performance against multiple companies and across various metrics.


  • Now open to the public, Channel 21 contains a host of videos providing insight into RapidResponse product development plans. See first-hand what the product is all about!


  • And for the month of February, start a new thread on the discussion board , and tell us your tale of sudden supply chain chaos. If your story tops the list, you will be eligible to win one of 10 Amazon Kindles! See more details here .




The online community we've created truly represents our confidence in the 'wisdom of crowds' theory. The updates we've made offer even more ways for industry professionals to learn, connect, participate and engage with others that share similar interests and insights.




Come visit it again and see for yourself.



Originally posted by jsicard at has a very funny (in a sad but true way) post by Thomas Wailgum outlining the 5 steps to ERP software success. From his post;


  1. Meet with ERP vendor, get taken to expensive sporting event/dinner by sales rep, and select appropriate software package. (And don’t forget to send the check!)
  2. Install ERP system!
  3. Integrate with other systems. (Repeat as necessary.)
  4. Provide thick “How To” manuals - chock-full of Clipart -to users!
  5. Sit back, relax and enjoy your new ERP system!*




Thomas has included all sorts of "fine print" around step number 5. Check out his post to get the details.




I'd like to add a couple of points that Thomas may have overlooked (I've also posted this as a comment to Thomas's article);




3b. Integrate with other components of the "Suite" (You don't think that just because you bought software from the same vendor that you wouldn't have to integrate it, do you?)




3c. Make sure that you use high priced integration consultants recommended by the ERP Vendor…this is WAAAAYYYYY to complicated to do yourself.




4b. Provide lot's of "happy pills" to your executive team (they are NOT going to be happy with the loss of productivity as people stumble around trying to figure out the new system)




5b. Don't forget to send in that annual extortion maintenance check. It's important to pay so that your ERP vendor can fix their existing bugs — and add new bugs features.




5c. Invest in some earplugs…you really don't want to hear the howls of anguish from your users.




Do you have other advice? Let's hear it!



Originally posted by jwesterveld at

You often hear that SaaS is a more efficient way to deliver software value to the customer. The main feature people point to is "if you don't need it — just don't renew your subscription." This "clouds" some other real benefits of SaaS.


Deployments are still required for SaaS, but on average they are much less involved and costly.


Security is even a greater benefit of SaaS. An on-demand vendor has the greatest incentive to keep their service secure — it is called losing customers if they don't. One of my favorite stories is about a large enterprise (years ago) who refused to go Saas because of "data security" concerns. Ironically, thirty days after this discussion they had a major breach of their own IT operations which became public knowledge.


I believe one of the greatest reasons to seek out SaaS offerings centers around system administration. Turnover in IT operations is common these days, so why wouldn't you want the vendor who knows the offering to be responsible for system administration? As CEO of a SaaS company I am often asked why we don't offer a lower cost on-premise version of our offering. I tell them I would have to charge more because we get more customer support calls due to increased system administration calls.


Having pointed out all of these indirect benefits — economics is still the largest reason to go the SaaS way. There were billions of IT monies wasted on what became "shelf-ware" – because vendors stuffed contracts with additional users or capabilities which were never used. What I have found with SaaS is customers only order the number of users they need in the short term, because it is easy to add users later on.


While there are still some "last remaining holdouts" on the movement to SaaS — it is now undeniable. Aproof point is witnessing the "most secretive and data security oriented" large enterprises asking for SaaS!

Originally posted by dcolbeth at

Our expectations as consumers are changing. When I was a growing up (I won't comment on how long ago that was!) we expected to have to wait for things ("It's in the mail!"). As the technology evolves, the time it takes to do things, and the time we are willing to wait to do things has changed significantly (how do you feel when the company you are dealing with wants you to mail or FAX information to them?). Let's look at some examples;


Mail — Before the 1980's the only option for sending written communications was to write a letter and send it via the post office. Typically, you could send a letter and depending on how far it had to go, you could expect the recipient to get it in days, maybe weeks for long distances. In the 1980's, the fax machine became a popular way of sending written correspondence. A fax could be sent and responded to instantly; however, in most cases, you had to go to wherever the fax machine was to pick up your fax. In the 90's, e-mail became the standard and you could receive your message at your desk seconds after it was sent. Today, with Blackberry's and iPhones, messages can be sent and received at any time of the day and night anywhere (almost) in the world.


Banking — Before the advent of bank machines, people used to need to stand in line to see a bank teller to access money in their account. You needed to get to the bank when they were open and make sure you took out enough money to cover your needs. Banking took hours and forget about getting cash on the weekend! With the move to bank machines, you could do most transactions using the cash machine and could do those transactions any time you needed to. Today, you can bank from your smart-phone, pay for items using a smart-card and even apply for loans over the internet.


Music — If I heard a song on the radio and wanted to listen to that song, I'd have to drive to the record store and get the album. If I was really anxious to get a song, I could get it within a few hours. With the advent of iTunes, I could download the song, move it to my iPod and listen to it in minutes. Today, I can download a song directly to my iPod touch or iPhone and listen to it immediately.


ERP — Before ERP systems we managed things by paper. Responding to changes took days, sometimes weeks. In the 70s, ERP systems became popular, but the systems were expensive, large and cumbersome, and very difficult to maintain. Responding to changes took days, sometimes weeks. Today…hmmm…let's see…well, they're still expensive, they're still large and cumbersome, they are still very difficult to maintain. And responding to change takes days, sometimes weeks. So…where are the advances in ERP???


Well, maybe our expectations of ERP systems haven't changed. Maybe my customer is happy to wait for days or weeks for me to respond, right? Not likely! Our customers want responses now. They NEED responses now because THIER customers are demanding a response from THEM!


ERP Systems aren't the answer. They do what they do…provide a plan and track transactions. If you look at each of the examples above, the key changes were not evolutions, they were revolutions within their industry. We don't have mail carriers capable of instantly delivering mail (even superman couldn't do that!), we have completely different technology. ERP systems won't evolve into something fast enough to meet our needs. We need a completely revolutionary technology. We need a response management system.


So…why wait?

Originally posted by jwesterveld at

I am putting the final touches on my presentation for SCM World Live on February 24th — a free virtual event for cross-industry global supply chain executives. SCM World Live is bringing together an impressive group of global supply chain, operations and procurement industry leaders in an interactive format. There will 20+ speakers participating in the day.


I have the great privilege to present alongside Dr. Hau Lee of Stanford on a topic that I am particularly passionate about: Matching Supply and Demand with 'Sensible Sense and Responsive Response'


It's a timely discussion aimed at answering questions like:

  • How can we correctly interpret demand signals and make sense of them smartly?
  • How can we enable the entire supply chain to react accurately and quickly?
  • What are the key elements of agility?
  • What value does responsiveness offer to the organization?


I recognize that there are individuals who might still believe they can plan their way out of a volatile or chaotic supply chain. It is my hope that this presentation will serve to highlight the new innovations in process and technology that make response management a far more potent cure for companies living with supply chain pain.


Find out all the details here. Why wait? Register today!

Originally posted by jsicard at

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