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Pretty Is as Pretty Does?

Posted by lcecere Dec 17, 2012

It is pretty on the shelf, but it can be a problem for the sustainable supply chain. But in fact, unsuspecting consumers would never guess at the issues that the package on the shelf represents for the sustainable supply chain.


The package in consumer products is designed to market the product. The package is designed, redesigned and tweaked over and over again throughout the launch process. So much so, that you would think companies are getting it right; but, there are inherent problems. The package and the process of package development is a major source of corporate waste. While companies may have zero waste as a goal, the reduction of waste in packaging artwork management is a stumbling block. It is an area, based on recent research, where we find companies are going backwards not forwards. Here we share the results.


While the development of a package sounds simple, it is not. It is a major supply chain constraint, and the source of many product recalls. In 2012, 61% of consumer products companies want to improve packaging artwork management as a key initiative for global sustainability. This is both the minimization of packaging waste and the improvement in packaging materials to improve sustainability. Interest is increasing. It has roughly doubled in the last five years. To compare, in 2009, shortly after the release of the Wal-Mart scorecards, in a similar study, it was 39%.


While increasing in importance, companies are treading water on performance. Despite a twofold increase in the deployment of Product Life-cycle Management (PLM) over the past five years, many organizations are going backwards not forwards. Artwork approval time has increased by 30% and over 20% of product recalls are due to packaging artwork problems. The root issue is complexity. The second issue is market discipline. The third issue is regional/global governance. All are increasing in importance. Within the organization, the number of items has grown by 25% and the management of packaging in global networks is challenging. The answer has not been technology; despite the increase in the deployment of PLM, the amount of product recalled and destroyed due to packaging issues continues to rise.


So, what should a company do? Organizations have the best results when they:

  • Focus on Fundamentals. The process is very cross-functional To drive success have a clear process for understanding global requirements and governance for data fields in global roll-outs. This tight governance process needs to be carefully managed by an artwork steward in either the marketing department or the product development team. Product marketing teams often turn over quickly, so there needs to be training and alignment on packaging artwork management and global sustainability initiatives to make the reduction of waste an ongoing reality.
  • Manage it as a Network. The processes need to be mapped outside-in, and managed as a horizontal cross-functional process. While many companies source suppliers based on cost, sourcing artwork management suppliers should be sourced based on capabilities. Today, only 35% of the development process is managed internally. The design and management of packaging and artwork is spread across a complex network of designers and suppliers. To reduce waste, suppliers should be selected based on proven collaborative capabilities and software integration.
  • Measure and Track Progress Cross-functionally. Packaging artwork and the associated waste is a dirty job. In many enterprises, over 150 people touch the process and the littlest mistake can result in costly recalls. Training and process discipline is key. It is only when it is consistently measured and tracked that cross-functional alignment against the goal can happen.


So, the next time that you pick up a package, give it a bit more respect. Consider that it is the product of months of cross-functional reviews and approvals by scores of people. And, that when companies make the approval process a priority that they make a huge step forward in reducing supply chain waste, improving time to market, and delivering on the brand promise. To read more on this topic, check out our report on slideshare. What are your thoughts? We look forward to hearing from you!


Herding Geese

Posted by lcecere Dec 12, 2012

Geese fly in a v-shaped pattern and walk in single file.  There are well-established patterns of leadership. Smaller flocks fare better than large ones. When they lose their leaders, many liken it to a wild goose chase. But, can they be herded?


Last week, I visited GXS.  The company is focused on the delivery of business-to-business (B2B) connectivity.  It is a spin-off of General Electric. At the beginning of the day, Steve Keifer, VP of Marketing, handed me a copy of his book, Herding Geese.  Without thinking, I thanked him and put it in my bag.  I get a lot of books. I did not think much about it.


Later that night, I started thumbing through it. The book is a good read. < For supply chain leaders, let me requalify the recommendation, it is a great read.> I am often asked for a list of good books on supply chain, and I don't have many on my list. I will add Steve's. I like the grounded reality and the sense of humor. Both of which, I find sadly missing in today's market.


Steve's book chronicles the rise and fall of the promise of B2B connectivity. I remember the hope and promise of yesterday's initiatives like it was yesterday.  I remember the go-go years of XML, B2B Trading Exchanges, RFID, CPFR, and Global Data Synchronization. They were overhyped and I think that all would agree that they largely under-delivered on the promise. We could easily dismiss the importance of B2B connectivity, but Steve's math shows that it has grown twice as fast as the much more overhyped traditional software market. GXS grew 33% last year. They found a niche in hosted B2B services and support of SAP projects (each SAP project plan has a need for B2B connectivity upgrades that is largely overlooked in initial scoping).


We laughed together at the new cadre of overhyped terms like Big Data, Hadoop, and Omnichannel Retailing. We talked about the future opportunities in the B2B markets and the potential role of GXS. I was encouraged.


In many ways, Steve and I are "birds of a feather." We are both, in our own way, attempting to herd geese in the software industry. Many would see this as a lost cause. Over the course of the last year, we have seen more and more vendor consolidation and less visionary leadership from the suppliers of technology. I remain firmly convinced that the only people who win in software consolidation are the shareholders of the software industry.  There are too few examples where merger and acquisition activity has added value for the line-of-business user.  In fact, I struggle to find an example.


As a result, I believe that the first generation of supply chain applications was based on best-of-breed leadership.  Successful technology companies in this era had a visionary leader and the company was fueled by passion.  These best-of-breed solutions gave way to the rise of the extended ERP platform implemented largely by consultants that understood transactional feeds, but lacked an understanding of planning. Ironically, as computing power increased and machine learning accelerated, the supply chain technology market has been slow to respond. However, I think that the third generation of technology will be owned by new best-of-breed providers and will be complimented by a rise in interest in B2B providers like GXS, GHX, IBM and E2open, Software as a Service (SaaS) vendors like Kinaxis and Steelwedge, and advanced analytics providers for text mining and learning systems like IBM, SAS and Enterra Solutions.  I also see a resurgence in activity for demand sensing with vendors like SmartOps, Terra Technology, ToolsGroup, SAS, and VisionChain. So far Terra Technology is winning on referenceable clients based on the use of analytics, but the demand sensing space is heating up.


For supply chain leaders, it is no surprise that the INFOR, SAP and Oracle Supply Chain planning applications have failed to live up to the  expectations of supply chain leaders. The depth of the SAP application continues to fail the market and the Oracle application, while deep in demand and transportation planning, is weak in the areas of manufacturing and distribution. The INFOR platform is still being sorted out.  Of the three, SAP is the strongest, but it is expensive and long to implement and SAP has been slow to close the gaps.  The issues manifest themselves into organizational political dynamics of line-of-business leaders pitted against IT with paid consultants chiming in that 80% is good enough. Sadly, it is not. And the consultants are not egalitarian. They have made large profits implementing extended ERP platforms that have fallen short of meeting the needs of line-of-business users.


This week, at Supply Chain Insights, we will host our monthly webinar on IT supply chain spending. It is called the Voice of the Supply Chain Leaders.  We are doing monthly free webinars as a service to the community.  Past webinars have been archived and are posted on our website.


In this sharing of results, you will see the current gaps in supply chain technology and see the results on future expectations by supply chain leaders. We hope to see you there, and we would love to continue the dialogue in the SCI Community.



The good news is that Supply Chain Leaders are loosening the purse strings on IT in 2013. The primary focus is on demand management: the ability to sense and shape demand. Companies are more serious about demand and are looking at new options. These include cloud-based solutions and are they openly looking for new forms of analytics in the demand space. While there is a high level of confusion, it is about more than traditional demand forecasting.



A rising issue is the ability to get to data to use it.  It is about more than reporting. The gaps in technology are compounded by the lack of understanding of the supply chain by the executive team.  In Figure 2, which represents individual pain of the respondent, we see that after two decades of technology implementation, teams are still trying to get at data to use it. One of the primary issues is that most implementations of technology were implemented in a vertically siloed approach without looking at the extended supply chain from the customer's customer to the supplier's supplier outside-in. Too few companies have charted a look at how to build the end-to-end supply chain outside-in using advanced analytics.  In this study, 40% of companies were not clear on supply chain strategy.


When geese fly, there is a clear leader. There is a bird at the head of the pack and when it gets tired they alternate and stay in the v-shaped formation. They are clear on the goal and have a clear plan. I strongly feel that the answer here is leadership. I feel that it is time for the supply chain leader to clarify the end-to-end vision and chart the course. It requires enlightened leadership on new technologies and questioning traditional paradigms.  As we see in Figure 2, we have some clear problems. The lack of clarity of what defines supply chain excellence permeates the organization and the traditional approaches do not lend themselves to being able to get to data for clear decision making. We believe that it will mean a return to Best-of-Breed. Let's just hope that it does not lead to an overhyped market around meaningless terms like Big Data and Omnichannel retail. If so, we are probably involved in a "wild goose chase." I sadly hope not. I hope to see you on tomorrow's webinar to continue the discussion.


What do you think? Let us know your thoughts.  The final report including tomorrow's audience polling will be available by January 2nd.

My soul craves a holiday. Like many of you, I've sat in one too many airline seats, hustled for one too many cabs and slept in too many hotel beds. I need to unwind. I want dust to gather on my suitcase as I bake my special holiday treats. I crave time to step off the treadmill of life to think. It is time for reflection and celebration.


The book Bricks Matter is currently at press. In my mind, I imagine a factory of printing presses whirring with the words that I have written; the smell of ink hangs heavy in the air; the printing line is busy stacking cut sheets on skids, assembling the book onto pallets; forklifts are putting the cases onto trucks. I think that it is only fitting that a book about supply chain is born this way into the real world.


I anxiously await to open my first box.  Holding the first book in my hands will be emotional. It represents 18 months of hard work. The presses are rolling. The hard copies of the book will ship from the Amazon warehouses on January 4th and the digital versions will be available the week of December 22nd. Emotions are swirling in my head. I am anxious. What will people think? Will I have the courage to read the ratings and reviews? I feel a bit naked.


In between strategy days this week, I had a call from Branka in Croatia. I do not know her, but she reads the Shaman and is an active member of the Supply Chain Insights Community. She stumbled on the website through a Google search, and she has become a loyal reader. She said that she has a group of friends that reads the blog and they have placed their pre-orders on Amazon. They are also anxiously waiting to open their boxes. She invited me to visit Croatia to speak about the book to her group in March. We now have six book signings confirmed in the spring. I love the thought of swapping stories with supply chain pioneers around the world and discussing the book. (You can follow the book tour and my insights on a new website dedicated to the book at


I am glad that it is Friday. It was a busy week. In between writing deadlines for next year's January publications, I also had a call from Sam, who had read my post about Steve, asking for help on S&OP. He started with a simple question. He had a need for an S&OP technology. He asked, "Would you be willing to help me too?"  I said, "Yes." His chemical company had been spun off many times and the regions had started very autonomous S&OP processes. There were many of them, and he needed to bring them together in an executive dashboard.  He had read my research report Putting Together the Pieces and wanted to chat about his options. I give thanks for Sam and for Steve. I am amazed that this blog has allowed me to connect with Branka in Croatia, Mark in China, Dudes in the Philippines, Eric in Brazil, Niels in Australia, Trevor in Canada, and Jose in Mexico. The list goes on and on.... I am in awe and wonder that a simple blog allows me to connect with 5,000 people around the world in a meaningful way.


This evening marks the third anniversary of the Supply Chain Shaman's blog. This post is the 147th. I purchased the domain when I announced that I was leaving AMR Research. It was a cold day in Boston three years ago. The sting on my face from a nor'easter was one that only a Boston resident could know. I held my coat tight as the tears froze on my cheeks. I was scared. I could not go forward as an analyst after Gartner Group's purchase of AMR Research, but embarking on my own journey was frightening. I did not want to do it, but I had to.


I started my new company, Supply Chain Insights, on February 10th, 2012. We published 19 reports this year and had 62,513 views on SlideShare of the work that we have written. The best read report was Does S&OP Improve Supply Chain Agility?  It's been read by over 2,750 line of business users. The Cash-to-cash Cycles report that we published December 4th has already been viewed by over 600 readers. The power of ink amazes me. The viral nature of being an analyst in a world of social technologies is exhilarating. I love writing. I love helping Scott, and Sam, and connecting with people around the world. Tonight, I raise a glass to the power of ink. Happy holidays.