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2016

I interviewed Mona Xiao who discussed Sustainable Supply Chain.

 

 

 

 

 

 

It’s great to speak to you today, Mona. And I’m looking forward to hearing your views on the topic of Sustainable Supply Chain. Can you provide a brief background of yourself?

 

Okay. Actually, I have 20 years’ experience in some of top 500 famous companies, such as Siemens and Motorola. So I also have some theoretical understanding of supply chain from my MBA study. Here now, I have some personal understanding which is different from others to share with your. So I am very glad to accept your interview today.

 

What is Sustainability in the Supply Chain?

 

The Sustainable Supply Chains means that the Supply Chain is quite stable and has the ability to prevent unexpected risk can run in a quite long term as market demand goes. This is my understanding.

 

So I think it is very important for the development of Supply Chains. Supply Chain continuing operations in various environments, which influence supply chain’s performance and processes for every supply chain member, and it will impact the survive of the business. So I would emphasize that sustainability is a critical factor of supply chain.

 

Can you talk about how it’s done effectively?

 

For the sustainable supply chain, in my understanding there are several factors. The most important factor is R&D. The normal R&D is excluded in supply chain operation. But I would say that R&D is a critical factor for supply. First of all, the R&D would determine the projects, confirming the function and how friendly to be used, what the costs constructed. R&D design will totally change the marketing and the orientation of the customer experience of the product.

 

And secondly, the new product BOM constriction will determine the how the product availability contribute to delivery, and profit potential, which is resulted from costs if raw material, production capacity allocation, and also the raw materials SKU performance, procurement, inventory allocation, transportation, and other costs and marketing concerned factors.

 

And also in some industries, the upgraded product for next product generation is a consideration for the industry sustainable and the continued incoming of business profit. So I would say product upgrading is very important.

The sustainable depends on efficiency and agility and how high they are, and these factor also impact the market share and profit of business. SO far R&D is not involved in supply chain. And it’s not very unreasonable to measure in supply chain performance without consider the R&D. So that’s why a lot of supply chains cannot do a complete precise market planning and with limited information to get an accurate master plan, because supply chain can’t be secluded from R&D.

 

So the second important factor is the healthy of supply chain. The second factor I would emphasize is transparency and the health of supply chain. A healthy supply chain should have the least avoidable expenses. A lot of factors are influencing the health of supply chain. The transparency is critical to the healthy operation environment. A stable supply chain results to a rational allocation of materials, capacity between supply members leading to a long-term and reliable and a stable cooperation. The transparent information benefit to the upstream and the downstream in the supply chain orchestrated operation to acquire material and location with lowest cost and the logistics prestige, which were the great influence of supply chain operation. Deliver effectiveness is closely depend on operational efficiency and agility.

 

Supply chain transparency should be indicated for performance control to decrease corruption and moral issues, such as integrity. In all kind of the supply chain operation behavior, the health of supply chain increase the transparency can decrease risk of corruption and immoral issues. So the transparency is more and more important in the health of the supply chain. And with the transparency, there is more in the more in the manual operation can be measured in a very quantitative, very effective way, and very accurate ways.

 

We understand that the transparency information can also improve the supply chain’s operation in orchestrated efficiency and agility of demand changes, order cancellations definitely reduces the costs for operation from the upstream supplier and the downstream customers. So the transparency is also very important.

 

Actually, I would like to call the supply chain as a supply cycle rather than the supply chain because each end of rolling cycle from demand planning, production, delivery, procurement, transportation, would be the beginning of the next rolling cycle. And this express our expectation that I are seeing how far the supply will roll its way to future.

 

And can you talk about where you see some success?

 

Success?

 

Success. Some success examples.

 

Okay. Success. Right? It’s the success… Concerning the success, I mean the supply chain can be a very good orientation and have a very simple operation and have a very smooth cooperation, efficiency process, efficient cost control, and inventory effective allocation. Success will be present as a very smooth operation through all the way from the very beginning of design, development to production and delivery. So that the supply chain also have a very orchestrated operation and can get a lot of efficient customer order fulfillment with satisfaction.

 

So each supply chain can have a very strong control of R&D. And I mentioned that the transparency will also keep a stable supply chain to maintain supply operate in a very healthy, efficient and cost-effective environment, and outcome of high profits for whole business.

 

Thank you, Mona, for sharing today.

 

Okay.

 

 

About Mona Xiao

 

 

 

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Mona Xiao

 

ODM Supply Manager at Motorola Mobility

 

LinkedIn Profile

I interviewed Paulo Moretti who discussed Measuring Purchasing Maturity.

 

 

 

 

 

 

Please provide a brief background of yourself

 

I have worked 35 years at Dow Chemical where I developed experience in diverse areas as: Manufacturing, R&D, Sales, Marketing, Business, Finance, Economic Evaluation, Strategic Planning, e-Business and Purchasing.

 

Please explain what you mean by Purchasing Maturity

 

The idea comes from the research funded by the U.S. Dept. of Defense to develop the Capability Maturity Model (CMM), where the term "maturity" relates to the degree of formality and optimization of processes, so basically each Purchasing function has reached a level in their own organization in terms of all dimensions like: Tools, Internal Clients, Suppliers, Organization, Staff, Policy, Process, and Metrics.

 

Each purchasing function has evolved through the years, by themselves or with help from consultants, to a certain level, and this maturity tool was developed to help in their self-assessment to find areas of opportunities.

 

Please explain this Maturity Tool?

 

The model consists of a spreadsheet with eight dimensions to consider for purchasing maturity: Tools, Clients, Suppliers, Organization, Staff, Policy, Process, and Metrics.

Each Dimension has several elements to be scored. For each element, users can select via the drop-down button the score that most closely reflects the purchasing function: 0, 1, 2, or 3 (with 3 rated as Very Mature).

 

The score for each element has a description to guide user assessment. After scoring all 55 elements, the Result tab will show the maturity level in each dimension and the overall result for the Purchasing function.

 

How the results are shown?

 

The results of each analysis are presented in graph form for the eight dimensions, as well as the maturity level for each dimension, in a “maturity meter” with the overall classification, as:

 

1. Starting / Performing: Purchasing is not a core competency. It is buried deep in the organizational hierarchy. Staff actively disengaged.

2. Enabling / Optimizing: Purchasing is seen as a "value-added" function. Clients and Suppliers are satisfied for the most part. Employees are engaged but view this as a "job." There are some spot best practices.

3. Best in Class / World Class: Purchasing is strategic core competency. The organization is proficient at expected business practices. There is a high degree of Client and Supplier satisfaction. The organization is staffed with highly qualified professionals. There is a high degree of automation. It is metrics driven. It is an efficient and effective organization.

 

How our audience can have access to this tool?

 

You can download the tool from the article MEASURING PURCHASING MATURITY at MyPurchasingCenter, or click in the link: http:/www.mypurchasingcenter.com/purchasing/industry-articles/measuring-purchasing-maturity/

 

 

About Paulo Moretti

 

 

 

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Paulo Moretti

 

Principal - PM2Consult

 

LinkedIn Profile

I interviewed Tim O'Brien who discussed Will the Global Supply Chain of the Future Need Humans?.

 

 

 

 

 

 

Can you provide a brief background of yourself?

 

Sure. I've been in the industry since I was 14. My father was in the airfreight industry. He ran CF Air-freight, which is no longer around. I went to college for an accounting degree. Didn't like it. Got into supply chain and logistics at age 22.I'm now 47, and I've basically worked for big companies, small companies, and everything in between.

 

Thank you. And so you wrote this post on will the global supply chain of the future need humans. Why do you say that...? What is your thoughts on this? Do you think that the global supply chain in the future will need humans?

 

I think the automation and technology in today's society is becoming more and more prevalent. So the question I asked on the blog was,“Do you think we're ever going to get to a point where the Star Trek era, where everything will be vaporized to you and you'll never need humans?” I think the answer is there's going to be more and more automation. But in the supply chain specific to warehousing, trucking, and whatnot, you're always going to need some, but I think as we evolve year by year, with the influence of technology that the amount of actual human labor is going to go down and down and down.

 

What should be done in response to this if you're in the supply chain, working in this industry?

 

Very good question. I would say that when I first started in the industry, it was very manual driven. Technology was not a big influence. The internet wasn't around. Faxing was the method of communication, along with pagers. I would say for anybody that wants to become a part of the supply chain industry, I would say the number one thing that you need to be experienced at is technology and the willingness to embrace technology as part of your day-to-day operations.

 

The days of a lot of phone calls and faxes and emails to be successful in the 21st century and supply chain is going the way of the dinosaur. So if you don't have technology in your background, there's only going to be a certain level you can get to within this career.

 

What kind of technology, specifically, should someone focus on?

 

I would say it doesn't have to be computer science. But I would say understanding the automation. One of the topics in this blog is MacroPoint. MacroPointis a GPS technology based on using the driver's cell phone, which will ping or locate them for a respective amount of time — every hour, every four hours, every eight hours. Understanding why that's important to the shippers in today's society — the Targets, the Walmart, the Amazons. They're all looking for more real time information, as opposed to "Yeah, we think the truck is in Pittsburgh, Pennsylvania." They want to know that, "No, it's not in Pittsburgh, Pennsylvania. It's in Albany, New York, 212 miles away, and the expected ETA will be on time within an hour, here or there."

 

How can someone develop this education? Do they learn on their own? Or are there university programs or other training available?

 

Yeah. When I graduated college in 1993, logistics wasn't really a degree. I believe there was one, maybe, at Penn State. I think nowadays, there is supply chain and logistics degrees at all the major universities. I think, as far as the aptitude for the supply chain and logistics industry, it's more, if you boil it all down to its lowest common denominator, it's moving boxes. The boxes may be small; the boxes may be big. But it's just the movement of goods. That's what, literally, logistics means from a military term.

 

If you've got the passion for putting pieces together, willingness to think outside the box, and not having every day be the same, then I would say the supply chain and logistics industry, pursuing that degree in college, is probably something that might be a good fit for a person.

 

Have you been able to find talent that you just mentioned, people that have those skills with technology?

 

Yeah. I think the people that are on the cutting edge of developing scalable businesses are the ones that have good infrastructure from a technology side. So, specific to our industry, we use some providers that, respective to our transportation management software, TMS, they're very dynamic. They fix things via their coding. They're embracing technologies such as GPS tracking and automation of messages to customers. That's one of the main reasons we use them.

 

So I think if you don't have technology in your arsenal, especially with the legislation that's coming on board with the hours of service and reporting, I don't think you're going to be a viable entity in today's supply chain.

 

Well, what about creativity? Does that play a role in the future of supply chain?

 

Another very good question. I think creativity runs hand-in-hand, at least in the supply chain specific, to the transportation industry.Creativity is when a customer is giving you situations that you're going to have to go to your network of providers and/or resources and get real creative as far as how you're going to support the customer and make it a win-win for all parties involved.

 

So creativity from a process standpoint, I would say the day-to-day operations of a business, the answer is no. The creativity for today's successful folks, in my opinion, in the supply chain industry, are when customers give you situations that, if you just run them through the normal day-to-day process, you won't be successful. You're going to have to think outside the box to make sure that all parties involved win and support your customer. I don't know if that makes sense, but...

 

Yeah, definitely. And do you have any final recommendations for supply chain professionals dealing with the issue of technology in the future?

 

Yeah. I would say it's pretty easy. When I keep referring to me being an old guy at the age of 47, but when I graduated from college in 1993, the internet wasn't really an important part of the business world in supply chain and logistics. Now it's absolutely essential. So if there's a technology that you feel like that you can see, whether it's GPS tracking, whether it's automation of EDI, whether it's web calling, whether it's any type of situation where a person who's in the industry doesn't know what the technology is, the first thing I would say is just look it up. Look it up. And then there's a lot of forums, kind of like yourselves, kind of like LinkedIn, where you can ask questions, and people are, in my experience, more than happy to help you out. And it's going to give you that much more of a leg up on anybody else that doesn't embrace technology.

 

So I would say technology and the automation of systems and processes is not going away. In fact, it's here to stay. And so if you are an employee or an owner or anybody that wants to even be interested in the supply chain and logistics industry, technology has to be your best friend. It can't be something that you're scared of. And if you're scared of it, use the internet, get yourself experienced, and you should be just fine.

 

Thanks for sharing today, Tim.

 

Thank you. I appreciate the call. Those were actually some very good questions. And, Dustin, have yourself a great day.

 

 

About Tim O'Brien

 

 

 

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Tim O'Brien

 

Logistic Services USA LLC

 

LinkedIn Profile

I interviewed René Bendt who discussed IT Innovation in Transportation Industry.

 

 

 

 

 

 

Hi, Dustin. Thanks for this opportunity to tell a little bit ourselves. We are a small software developer, working solely for the transportation industry. When we say transportation industry, it is predominantly for the, sort of, hardcore part of the transportation industry, the shipping lines, the ports, and the terminal operators, and the equipment managers. Even though we're a small company, we are working with some of the big players in the industry, and that means that our software footprint around the world is quite substantial, more than 300 offices around the world are using everyday software developed by ARL, and we have also our software supports more than 750 businesses currently.

 

One of the, maybe, a little bit peculiar things about us is that whereas our own software unit is anchored in Hong Kong, that our development center is located in Novosibirsk in Central Russia, in Siberia, Central Russia, which is actually the place in the world, which, geographically, is furthest away from any saltwater, and we are solely developing software for deep-sea operations in this location.

 

In a scale set by the transportation industry, technology innovation is maybe not necessarily development of completely new technologies, but rather looking at other industries, which are faster to adopt new technologies and trying to adapt them in the transportation industry. We consider ourselves an innovative IT company. We are not developing new technologies from scratch, but rather trying to deploy some of the well-working technologies that, for example, the development in the consumer market for hand phones and tablets have been driving forward the last couple of years. We are trying to deploy these in relevant business scenarios in the transportation industry, leveraging some new benefits, harvesting some benefits for the transportation operators that these technologies enable.

 

Some examples are some of the mobile apps that we have launched over the last years, and I should say that 2016 is the year that this has really kicked off for us. For example, we have built a number of apps which are working in symmetry with some cloud solutions. So the physical operations can interact using a mobile phone with a cloud solution which can then distribute and share what is happening in the real, physical world with the stakeholder in the office or with the other companies.

 

We're also exploring using some of these standard centers that you see in, for example, [inaudible 00:03:18] mobile phones nowadays, for example, GPS, to detect your location automatically. The app that you see an example of right now is a reefer monitoring app that is used on board business to lock the current readings of a reefer container. Of course, it is reflecting the physical storage on board the vessel based on the bay plan that we import in the cloud and synchronize down to the mobile level.

 

Now when the deck officer moves around on the vessel and reads the actual containers, he will physically walk on some bridges next to the reefer containers in order to monitor by own eyes the reefer containers, as well as that the app is reflecting how the containers are actually stored. We are now working on using some centers on the mobile device so that when the deck officer is physically moving from site to site from the vessel and up and down on the tiers, that we can automatically detect this movement and automatically locate the container at the current location of the deck officer. So easing the locking of the temperature for that reefer container. Another example is that we are playing with using the microphone on a mobile phone. So we, for example, after some pre-calibration, can detect the ambience of the mainland and maybe detect which ocean regions and other gear is on and off in the engine room simply by using the standard microphones available in a mobile phone.

 

The shipping industry, like many other industries, are in hefty competition. In many ways, you can consider the shipping industry as a utility industry. It is a core service that is being delivered to its customers transporting goods from A to B. Customers, obviously, would like to make use of this service, but they would also like to make use of it as cheaply as possible. So one of the key drivers in the shipping industry nowadays is to, in a consistent manner, deliver the same service, but consistently also reduce the unit cost time after time.

 

One of the key tools to achieve that is obviously to apply technology to the same business processes as yesterday but in a smarter way, calling cost out of the supply chain and use of technology is, of course, an obvious tool to support this life.

 

An example I can give is, for example, that by combining the mobile technologies with some cloud services, we can, for example, write some monitoring sources so rather than monitoring business calling and ports in each individual port where this is taking place, with basic cloud technology, we can provide some monitoring services where you can actually monitor a whole region in one big media wall like the example we see here in front of us. It could be that you are monitoring the arrival or the departure of vessels. It could be that you are monitoring, for example, the performance of reefer containers across a whole fleet or across a whole region from a single location.

 

And in this way, the technologies and the apps that we provide are contributing to reducing the cost in the transportation industry.

 

I guess there's not one uniform answer to that question. If there would be, then it would all be obvious to all of us what to do. So let me give some examples of where we believe that we are providing some technology-based solutions that will assist the transportation industry to cut some cost out of their supply chain. An example here is a tablet or mobile phone solution. In this example, it is an Android solution. Typically, we are providing Android-based solutions for operational purposes. So for physical things happening in a port or in a container yacht for example, and we are also provided iOS iPhone solutions, but that's more for desk port, office-style management for mobile usage. We actually also are playing with our first apps running on smart watches.

 

So the example we're looking at here is an app to lock the handling of break bulk cargo. We have other variance that focus on other cargo types, for example, containers, dry bulk, or [inaudible 00:08:02]. In this case, it is for locking up break bulk cargo boat, the cargo that is being handled, but also, all the stoppages of the handling operation in the port. So the shipping line’s interest and, as well, the terminal operator's interest, is to expedite the vessels as quickly as possible, get the vessel out sailing again as quickly as possible. From the terminal's perspective, that releases the key resources and the major investments in the port, namely the key site itself, the berth and the handling gear, for example, cranes, so that they can expedite the next vessel with the same resources.

 

From the vessel's perspective, the fact that the vessel is sailing in the sea as fast as possible, so reducing the port today is not just possible, it means that you can sail as slow as possible to the next port, hence burning less [inaudible 00:08:52], less fuel. That's quite a substantial difference in fuel burn when you are increasing the speed. It's not aligning [inaudible 00:09:00].

 

So in this case, we are locking from the shore-sites the cargo being handled a well as all the blocks of time when the handling gear is not operating and that could be because of some circumstances, which cannot really be changed by... An optimized business process, there could be bad weather, for example.

 

But also, in many cases, this is something that can be dealt with, can be... The partners, the stakeholders who are working together during the port operation can together optimize the handling process to [inaudible 00:09:38] the vessel faster.

 

Another example is here, a berth planner, where we are combining a physical map of a port with some augmented reality, so displaying the berth and the plant vessels' arrival on top of each other to allow the planners in the port to plan for as many vessels as possible and possibly to reshuffling of berth locations if a vessel is delayed, for example, or if a vessel has been expedited and is ready for sailing at an earlier time, then it is possible, by this visualization, to quickly plan for how to utilize these resources effectively.

 

 

About René Bendt

 

 

 

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René Bendt

 

Director at arl-shipping.com Limited

 

LinkedIn Profile

I interviewed Steve Johnson who discussed Increased Feasibility in MHE Systems, Including Robotics Involved in order Fulfillment.

 

 

 

 

 

 

Today we're speaking with Steve Johnson who is the Managing Principal and Co-founder of Johnson Stephens Consulting, which is a Supply Chain Operations consulting firm. The topic is Increased Feasibility in MHE Systems, including Robotics Involved in Order Fulfillment.

 

So, Steve, could you first provide a brief background of yourself?

 

Hi, Dustin, of course.I'm glad to talk to your audience today. I am co-founder and managing principal, as you mentioned, of Johnson Stephens Consulting. My background is in industrial engineering and supply chain operations, both as a client at one point and then also, for the last 25-plus years, as a consultant.

 

Our firm reaches out the United States as well as into other countries internationally to help retailers, wholesalers, third-party logistics providers with their distribution and supply chain challenges, including designing distribution centers things such as that.

 

Thanks. Well, my first question regarding this topic is the federal minimum wage. Can you talk about how this change is affecting companies and how are different companies approaching this?

 

It's an interesting phenomena. Just in the last few months, it really started, I guess, just after, probably in February or January this year, where potentially our federal minimum wage here in the US could possibly go up to $15 per hour, depending on who gets elected here in 10 days or so. That would be phased in over a period of time.

 

Some states have already taken steps to do this. New York in particular and California have inactivated a $15-an-hour minimum wage on a state basis, phased in over the next three or four years. New Jersey has passed it. The governor there, Chis Christie is probably going to veto it, but I think they have the votes to overturn that veto.So we'll probably see that in New Jersey. Then in the cities of Seattle, Washington, we know that that's implemented as well.

 

And what's happened is, retailers that consume a lot of resources to pick their orders in e-commerce fulfillment centers and in their stores as well, if they do have stores, are looking at increased ways to automate some of the processes that we might not have found in the past when we run the automation analysis and return of investment analysis, they wouldn't have penciled out.But all of sudden, people are going from $9, $10, and $11 per hour to a $15-per-hour wage rate, plus benefits.It starts to change the equation in there as far as labor.

 

We've also seen an increased competition for labor availability here in the US. Just about every client that we have is fighting for labor where they are, because they need, in some cases, up to 1,000 people in these fulfillment centers to fulfill customer orders. And so they find themselves using a lot of temp labor these days, which tends to be about, when you hire a temp person, it's about 50% productivity coming out of the gate, versus a regular trained, experienced person.

 

So they find themselves kind of with a [inaudible 00:03:41] to get quality labor. And so they've reached and said, "Are there way that we can automate some of this so we can reduce the number of folks who we have in our facilities?" I think it's an unintended consequence of potentially the law that might get passed on the federal basis, which is really to try and help people, but in this situation, it's just a hinderance to throw that on top of companies immediately and have them deal with nearly a 50% wage increases all within three years.

 

We're also seeing pretty much that across the US. And requests are coming in for that kind of analysis. And that can lead to things such as automated storage and retrieval systems, automated picking systems, and even some robotics that used to be really confined to the manufacturing plant. We've seen some robotic-type devices that would potentially be used in these order fulfillment centers to help pick orders and assist. You won't do away with the human element, but help that productivity rate be a lot higher. So you need less people.

 

Just an interesting thing, after spending a lot of time in this industry, to see this happen all of a sudden.And it's a very critical thing that's on the front of minds of all the C-level executives and the senior VPs of supply chain that we run across.

 

Can you talk more about some of the businesses that are affected that might be looking into automation?

 

Yeah. Absolutely.So I mentioned retailers, e-commerce kind of fulfillments. It goes to everybody, Amazon all the way across to name your local store — Target, Home Depot, people like that. So it's kind of your general [00:05:48] that are out there across the universe. And then also wholesales as well. But the wholesale distribution was with the wholesaler Thursday and large sporting goods equipment manufacturer that is really frightened by this whole thing. They do, also, distribution to all the main retailers out there — Dick Sporting Goods and Academy Sports and Bass Pro Shops and Cabela’s and people like that. And they're very afraid about it.

 

What's interesting is what's popped up as well is third-party logistics providers. So in other words, companies that outsource their distribution and logistics to these 3PL — with call them 3PL providers. We're seeing the 3PLs pop up. We've had several of them pop up and say, "Well, we typically don't look at automation for our facilities because we're tied to a contract with our client. And a lot of times that wouldn't let us spend a lot of money on a capital basis. We're faced with these increases in the labor rate, and we want to get ready for that."

 

So we're actually doing return on investment analysis for 3PLs for automation and for robotics, which is very unusual. I mean, typically, a 3PL, if they do rack and some conveyor and maybe a sortation system, that's about as far as you're going to see that, because they're typically working on anywhere from one to three-year agreements. But they're looking for three- to five-year's worth of commitment from their clients these days. And this is a way for them to try and mitigate this risk of needing just tons of people. They think that potentially this could be a positive return on investment.

 

What it's going to lead to is it's probably going to lead to situations where we're going to have less people in the buildings, which, of course, is not great for our employment picture here. But it's a reality that I think people are going to have to face up to if we inflict these kind of wage-rate increases in a short period time like this on the industry.

 

Thanks. And do you have any final recommendations?

 

I think it's important for companies, because labor availability, labor quality, the turnover rates are high. They're all faced with this. I think what we're seeing is we'll take a look at labor, space, capital, and service levels — that is to the customers — when we run what we call an after-tax internal rate of return on material, handling, equipment, technology assessment.

 

I think it's important to companies as they're headed into this holiday season that they reach out and, either with themselves or with a consulting partner, they try and do these analyses and run some of these with the $15 to $20-per-hour wage rates in the two, three, four, five year out-year, and just see if this is going to be something that they're going to want to look at. Because typically, that type of investment, it's at least 7-figures. In some cases, it's 8-figure US dollar investment. But if it would generate some kind of ROI after tax, then we could find ourselves in a situation where companies would benefit from this approach.

 

Thanks for sharing today, Steve.

 

Well, thank you, Dustin. I appreciate the opportunity.

 

 

About Steve Johnson

 

 

 

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Steve Johnson

 

Managing Principal at Johnson Stephens Consulting

 

LinkedIn Profile

I interviewed Romeo Elias who discussed Business Process Management and Workflow Automation.

 

 

 

 

 

 

Today we're speaking with Romeo Elias who is the president and CEO, as well as the founder of Intellect, which is a Business Process Management Software Company. And they also focus on quality and compliance management for organization. Today's topic is Business Process Management and Workflow Automation. Romeo, can you first provide a brief background of yourself?

 

Thank you, Dustin. It is good to talk to you. My background, I kind of came out of the engineering world. I am a mechanical engineer and manufacturing engineer, and about 16, maybe 17 years ago, I came up with the idea of helping companies — initially it was engineers —automate some of the knowledge and some of the processes that they do every single day in their day-to-day lives.

 

So we started the company and really, my background has been primarily very focused on process and helping companies optimize and automate what they are doing manually. As we evolved the business and we started to work with various companies and customers, early on, companies like Boeing and Jacob Engineering, we learned quickly that the software in this approach could really help with various departments, not just the engineering departments. And so we expanded it into pretty much a broad platform to help any department in organizations to capture their processes.

 

So that's kind of a little bit of background on myself. So really, it's primarily this company that I've been focused on for most of my career and really growing the business. And today we work with customers worldwide. We have hundreds of customers all over the world — tens of thousands of users. And the software is used for a variety of processes — in human resources or in supply chain and finance and operations and engineering, in a variety of different industries and verticals.

 

Thank you. Can you talk about what is business process management and also workflow automation?

 

Absolutely.So basically, when companies grow, they get to point where... When you're starting out, you can do things manually. You can pretty much have some of the information and processes ingrained in some core people's heads, essentially. And you can run the business and grow and be efficient. But you get to point where it becomes not manageable anymore. And plus, you need to implement process and controls to ensure compliance, ensure that you have a repeatable and reliable customer experience, that you are delivering on your service levels for your clients, and your employees are treated the right way. So it's essential that you get to a point of maturity where you really want to standardize and have an enforcement of processes.

 

So then you start to define your processes, and you say, "Okay, this is how we do, for example, on boarding of an employee." Or, "This is how we handle expenses and how we report expenses and how we reimburse expenses and how we approve them." So you document all these, and that's another level. At that point,you're doing business process managing, because you're basically documenting your processes, and then you're trying to enforce them and follow them.

 

Then business process automation is the next level beyond that where not only do you have your processes documented, how do you ensure that you use technology that ensures that those processes are being followed correctly, that you have transparency and visibility into whether they are or not. Then you can improve on those processes and ensure that any bottlenecks are being streamlined and addressed so you can report and get more information about your business and how you're performing overall. So you would use a software, like business process management software, to enable you to do that.

 

So workflow automation is a component of BPM. Essentially, to have a BPM software, a company has to have a number of tools integrated into their software platform that enables that. You need to have the ability to create forms that will capture data and that's usually a form builder. You need an ability to have an engine that allows you to model a block diagram describing your workflow, just like in Visio, and then basically, to be able to execute that, to enforce it, which is what that engine would do.

 

You need the ability to capture business rules and case management. So this is where you defined certain requires for how the business, the workflow, will run, and how the form data is being captured and what happens under certain cases.

 

You need to have a notification engine that will notify people that they have to do something in this process or maybe to escalate if the process is stalled. You need to have visibility to reporting and dashboards. So you have to be able to create all that. And there's a number of other ones. You need to be able to store data. You need to have a user interface. And then, obviously, one critical piece as well is an ability to interface and integrate with different systems that you have, because oftentimes, your systems are not running in a silo, they're running interconnected with various other tools that you have.

 

So a BPM software suite allows you to do all of that. It will take all of those capabilities and then use them to create business processes and automate them. In our world, we call them apps. We're able to create these apps, and then you're able to deploy them in a web environment and also mobile environment and be able to then manage, to [inaudible 00:05:54] the flows and the information that's being passed along from person to person as part of your process.

 

Does that make sense?

 

Yes. Can you talk more about why is this important?

 

Well, I mean, if you don't do this, then you really... I mean, this happens all the time. We’ve been in so many large companies. We visit, and they're doing everything manually on paper or on spreadsheets. You just don't know what's going on. You have a lot of inefficiencies otherwise. I'll give you some examples where a university we were working with had a process of approving contracts and subcontracts that were awarded to them. And just the process that they have to go through in order to get the subcontract reviewed by the various entities from the operations to the legal team to the scientists and researchers involved, and oftentimes the government, who is awarding this, when it's manual, first of all, it's reinvented every time. It's like you're doing things the same way every single time, or completely from scratch. Second, you have no visibility into what's going on. So something may be sitting on someone's email box or inbox or just their desk for weeks, and nobody knows where it's at.

 

So you have all these inefficiencies. I mean, it takes six months to a year to get something approved, just because of the inherent inefficiencies when you have a lot of people doing this manually.

 

So when you implement BPM to that, and you map out the process, and you automate it using a software like ours, you can reduce that complexity and inefficiency down to a few days. Literally, it could be a couple of weeks now, because there's no more of this friction. Everything disappears, and everybody now knows what's going on — full transparency — because the amount of effort required to complete the process isn't six months. It's usually hours. But because there's no visibility to anything, it can be spread out across that amount of time.

 

I'm sure we've all experienced this in companies when the moment you put in transparency and visibility and structure, everything moves a lot faster.

 

Can you talk about implementation and how implementation is done effectively?

 

So typically, when we work with customers, they've already identified that they have a process problem. They’ve already identified, maybe it's an area in their organization, let's say...And let's take HR on boarding, because probably a lot of people are familiar with that. So if you're a large organization and you hire an employee, you need to decide, first of all, you have to collect all their paperwork from HR. Then you have to decide what systems they may have access to or not, in terms of servers and software and cloud services, whatever you want to give them access to. You may have to decide also in terms of what business cards they have to get ordered and what desk they sit on, and what options they have to specify in terms of benefits and so on.

 

All those things have to happen. And most companies, they do these in a completely unstructured way, and it's very manual and it's not unusual that an employee is onboarded, and a month later, they still haven't received a laptop, or they still haven't gotten access to some critical system that they need in order for them to perform their work. And there's a real cost for that.

 

So the first thing you have to do is really add... The company has got to identify this problem. They've decided and mapped out that the process... They say, "Every employee now, from this point on, has to follow this process. They have to... Once we onboard them, we need to make sure that first they fill out these forms. Then they have to notify their manager to order these things. Then we have to make sure the marketing team is informed of getting them business cards," and so on and so forth. IT has to be informed about their server status, access, and so on.

 

So all that stuff gets mapped out into a flowchart, and along with information, business rules about what happens if...how many approvals they need for the server versus for that server and so on. So they come to us with this information. We work with them. We work to understand it, and then we basically take that and either we show them how to use the platform to build out the process and automate it themselves, or we do it for them, and then they take it on.

 

And this typically, with a BPM solution, the key is that you're not programming. There is no traditional programming here. It's all done through a drag-and-drop interface. So the key is speed of deployment and speed of change. So you would drag and drop the forms. You would drag and drop, build out that flowchart from the system. You put in your business rules, again, just through the interface, and then that could be a process of a few hours to maybe and few days, and then you have that process implemented, and then you are able to run it. And once you run it, now from this point on, the person will be walked through that process from beginning to end.

 

Some of the inherent benefits are reporting and dashboard. So you'll be able to see all this information. You'll be able to see how quickly you're responding. You can enforce the rules. Now you know you're compliant. If anybody audits you, all this information is there.

 

Thanks for sharing today, Romeo.

 

Absolutely, Dustin.Hopefully this was helpful and gives your audience a sneak peek into the world of BPM and workflow management.

 

Great. Thank you.

 

About Romeo Elias

 

 

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Romeo Elias

 

Helping companies automate workflow and process, BPM Expert, Entrepreneur, Advisor, CEO at Intellect

 

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I interviewed Bruce Rubin who discussed Sourcing and Product Development.

 

 

 

 

 

 

Can you provide a brief background of yourself?

 

Yeah. My background — I've spent over 30 in the industry working mostly for medium-sized consumer products companies, starting out in inventory management and inventory control and forecasting. Eventually, we got involved with product development, which led to global and sourcing of product and going around the world looking for new products as well as looking for new sources.

 

I've spent the last 10 years of so in my own consulting company, working with companies and entrepreneurs [inaudible 00:01:00] products, focusing on the consumer products that would be into the retail market, so helping my clients source product.

 

And then, through a network of independent salespeople, help them get the product in front of the retailers and understanding what it takes to make the supply... Once you source the product, what you need to do to maintain the supply chain so that the product can be in stock when the customer, the client, needs it.

 

I've got a college education, etc., and of working in a number of different areas in manufacturing from injection molding, metal working, cutting and selling, and a little bit in electronics, which allows me to help a client with any type of product that is sourced.

 

So that's my background. Most of the companies that I've worked for were in the $30 to $50 million sales range.

 

How do you get the best value enough you source products, either domestically or overseas?

 

What we look for and work with are people either that I've worked with myself directly for a number of years. So we've made sure that the vendors we're working with are reputable and do produce a quality product. And if the vendors that I've personally worked with do not, cannot supply the product at the right price at the right quality, then I've got a network of contacts globally that will be able to point me in the right direction.

 

So the best value is typically deciding on a cost, what the perceived value of the product to the... Looking at a consumer product, the value that the product needs to be sold for at retail and then working back and coming up with a target, and then seeing if that target is reasonable, and then going back and saying, "To make this kind of product at this price, can it be made and be made well?" And then working backwards with the vendor saying, "Okay. We want to make a product." Let's assume a $10-retail item should cost the original manufacturer somewhere around $3. And if we can't find... If the product, the ways it's designed, cannot be made for $3, then we either have to redesign the product or change the focus on how it gets to market.

 

But it's developing the right sources so that you'll end up with who can make a quality product and then work backwards into a cost that makes sense for the product and the quality you need.

 

I hope that answers your question.

 

Can you talk about the best practices when you're doing product development? And sourcing and product development, are they done together?

 

Well, product development, depending on the product, they are done sometimes, the product development gets done first and then you go out and get the product. But in many cases, it's done in junction with the supplier so that what you end up with is a product that can be made at a cost you need it to be made at. As an example, a number of years ago, I found a product. Actually, I was traveling in England and found a product that the company I was working for at the time, the owner had an idea that a product like this would be successful in the US. And it was not in the US at the time.

 

So I brought some samples back and we came up with concepts to Americanize the product, versus what was being sold in England and then worked with the vendors to come up with something that could be made at the right price. Sometimes it's done upfront. And then working with the vendors, you tweak it, or you work with the vendors to help you do product development. So it's a combination. But you cannot, in today's environment, develop a whole product internally and then say, "Here. Do it," because in some cases, if you don't design the product properly, it may not be able to be made. And that doesn't do anybody any good. So you need to have... It's got to be a partnership between the vendors and the product development team to be able to, at the end, come up with a product that can be made and made at a reasonable cost.

 

Do you have any final recommendations on sourcing and product development?

 

The one thing about product development is, if you wait until you have a "perfect" product, in many cases, you'll never get the product to market, because it's hard to say this is exactly perfect. So when you get a product to a point where it should be producible, then you go ahead and make it. And then, as you go along, you can make adjustments. But depending on...some products are relatively simple, but if you don't have, like I say, a simple one-piece metal stamping, or a simple injection molding part, that you need to get the product to a point where it's producible and then go make it and tweak it later than waiting to get it, "perfect." So product development is a process, and as soon as you're ready to make something that is saleable, make it, and then worry about fine-tuning later, not wait until you get it 100%, because in many cases, as I'm saying, you'll never get it to 100%. And you'll find the product on the market by one of your competitors.

 

Thanks for sharing today, Bruce.

 

Not a problem. My pleasure.

 

 

About Bruce Rubin

 

 

 

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Bruce Rubin

 

Partner at Nenko Advisors International, LLC

 

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