(Extract of Speech delivered by Self at 4th Asian Manufacturing Supply Chain meet @ Mumbai on
“Seven Wonders of Supply Chain Software & Ten Tips for getting buying Approval”)
1. Make your CFO as the Initiator.
Let your vendor approach your company through the CFO, Let all the credit for the initiative, payback calculations (must) and the KRA fulfillment for the project be granted to the CFO (Supply Chain Transformation is your WIN, not to worry if all credit is shared)
2. Highlight savings Potential of your proposed software in every CEO presentation.
Project cost savings, with and without the software in every CEO presentation. After a while the CEO would have digested the savings and may instruct the team “Just get it”
3. Shout loud, “Competitor gaining Competitive Advantage”.
In highly Competitive industries, if your competitor already has the software, just share the risk of ‘’Loss of Competitive Advantage” to Sales, Marketing & all concerned and you are sure to win approval for buying “two Software” or an “upgraded version”.(Eg during my tenure at Pepsi every sales promotion of 1 bottle free per crate launched by Coke would be immediately countered with a 2 bottle free per crate scheme by Pepsi & vice versa).
4. Highlight Employee Retention Risk.
Ask all your star resigned employees who would crib about lack of software tools to cite in their exit interviews that “use of excel in place of latest software” as cause of resignation. The last words of a resigned employee’s are often given more weightage and it could help. Another advantage of the same is that it is now you have HR support.
5. Budget, Payback & other ground rules.
Research all ground rules, acceptable payback period for CAPEX, attach all data and approach the CFO at the right time (The best time is the last month of a financial year. You are likely to get a reply, there is no spare budget this year, we shall source it next FY out of the new budget. Document same and approach the CFO again in the new FY & hope for the best (Worst is the CFO telling you April fool).
6. Reduce the payback period.
Ensure that the Payback period is shortened by negotiating hard to bring down the price and maximize savings by including hidden costs. Talk cost reduction and not value creation etc as an accountant is a person who knows the cost of everything but value of nothing.
7. Convert to OPEX model if CAPEX is a constraint.
Most vendors would be in a position to provide you with an OPEX model, in case if you have “CAPEX” constraints.
8. Sharing is sweet.
By share I don’t mean to signify “Copyright” as “Right to copy”. I mean frequent y use software like network design/ optimization tools can be bought on behalf of group of companies or association with the understanding that it would be used by all group members.
9. Find a way for funding it.
a. From cost avoidances/savings.
b. From value generated out of scrap sales.
10.Choose a 3PL who has it.
Last but not the least the easiest way, if strategies 1 to 9 fail, go to your existing or prospective 3PL and you shall get yours. Please note that a good 3PL shall at a minimum need to use a WMS, LMS, Network planning, & Optimization software & some would even need a “TMS” thus leaving out only S & OP & Global Trade Management.
Note to Hon CEO/CFO’s:
a) We do not need to use the above tips and tactics if understanding of the need is supported by approval in place of the frequently used statement, “Excellent software, we shall buy it in a better year (which rarely comes)”.
b) It is an accepted fact that excelling in EXCEL is not sufficient for Supply Chain Excellence (to quote Lora Cercere, CEO, Supply Chain Insights “The greatest obstacle for Supply Chain planning is the Excel spreadsheet. What many leaders do not recognize now, but they will over time, are the limitations of the Excel spreadsheet to model the complex supply chain environment that exists today.”