Time is moving fast. I notice that blueprinting and software selection easily takes a year. Any supply chain technology project taking a year risks being delayed or stalled by changing business priorities: operational issues, bad business performance, mergers & acquisitions, …
Business is evolving fast. If you get delayed or stalled, your blueprint and resulting selection might be outdated requiring you to start over again. Over the last 5 years I’ve encountered this disillusion in many companies.
In general, the traditional approach is slow, requires a significant upfront investment, for an uncertain return. That’s not how modern companies think or work.
There is no one-size-fits-all in supply chain and supply chain planning. Every business is different. We sell different products in different markets and may pursue a different strategy on cost, service or product leadership. Different companies have different supply chain maturities, depending on how long they exist, the management they had and their competitive landscape.
Moreover a Supply Chain is a complex system of inputs and outputs. Input data in general is incomplete, inaccurate, and coming from different systems. A Supply Chain deals with a lot of uncertainties on a short-term, a mid-term and a long-term horizon.
The two of these, the difference in nature and the supply chain complexity, imply you cannot develop a good planning solution by drawing it on a white board or describing it on a piece of paper. What you write down at the start of a supply chain technology project, may be neither feasible nor optimal. A successful planning solution goes through iterative cycles where the planner and the consultant experiment within the constraint of the available data on how to lift the existing processes to the highest possible level. It is, from that perspective, very different from implementing more transactional software like an ERP system.
Focus on the business problem not the software features
Software selection programs tend to be overly focused on software features. Many of these will not be used, or at least not in the foreseeable future. Expectations tend to get inflated and drift away from the key business problem at hand. There seems to be a fear of ‘making the wrong choice’ and a sense of ‘eternity’. Though we do believe that the snapshot of today is future proof, which is a mistake in the fast changing world we live in.
Check the implementation partner, not the software
I’m also amazed how late in the process companies will check the relevant knowledge of the implementation partner, as if a supply chain planning software would install itself. Instead of checking a long list of features, we believe that checking the capability of an implementation partner to solve key business problems is the key to successful supply chain planning implementations. The implementation partner should be knowledgeable in different areas.
- Supply chain and supply chain planning: As a supply chain is complex, knowledge and experience is key to do a good job.
- Knowledge of a flexible and scalable supply chain planning solution: As your situation is different, it will require configuration. Comparing standard features in that aspect is of limited use. What counts is how fast and effective the implementation partner can use it to understand and fix your business problems, of today, and of tomorrow.
- Requires good knowledge of analytics: Statistical forecasting, stochastic inventory models, linear programming are like turbo chargers. If you plug them in on an efficient process and tool, they can easily get out a 30-40% extra performance. However, they should be handled with care. I’ve seen many companies where the analytics were turned off because of a bad implementation and a lack of knowledge after the implementation consultant had left.
- This is old wisdom, but people are key: You can have the best process and tools with the most advanced analytics, if planners do not trust the outcome, they will easily revert to the old excel files they have been using before. This is a stretch for any implementation consultant. Where the process, tools and analytics are clearly hard skills. The best implementation consultant knows how to balance that with the soft skills. Success in a supply chain technology technology project only comes together here.
We live in an e-world, where systems are easily connected. Still we long for 1 single system that will solve all of our problems, both today and tomorrow.
We believe wiser companies go more pragmatic, tackling business problems by hiring relevant expertise that brings fit-for-purpose solutions. It reduces risk, shortens the payback and brings forward the benefits. It’s a new style of management, which takes courage and determination. But we believe it’s more rewarding.
I’m most curious to hear your comments! Let me know on firstname.lastname@example.org!