Supply Chain Systems Supply Chain Systems Implementations Implementations Presented to PMAC By Nicholas Seiersen Executive Editor, LQ Magazine [email protected] 647 299 8360
Dec 19, 2014
Supply Chain Systems Supply Chain Systems ImplementationsImplementations
Presented to PMAC
By Nicholas Seiersen
Executive Editor, LQ Magazine
647 299 8360
Material provided in confidence – not intended for distribution
Logistics Technology - Logistics Technology - AgendaAgenda
Trends in Technology & Logistics: Brief Overview
eProcurement – What it is, What Can it do for You
Putting Technology to Work for You
Leading for Success: Tips on Project Management
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Underlying Technologies: Underlying Technologies: Trend: Faster, Cheaper, Trend: Faster, Cheaper, BetterBetter
AnyoneAnyone
AnytimeAnytime
AnywhereAnywhere
Any DeviceAny Device
years
Per
form
ance
/$
Processors
years
Per
form
ance
/$
Networks
years
Per
form
ance
/$
Storage
years
Per
form
ance
/$
Memory
User Interfaces Development Tools
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Networking & Value Single ComputingAdded Information Services Data-bases Power
Batch->“Real Time” Memory & Storage
User Interfaces Barcodes, A.E.I., Software development RFID tools
Integration Frameworks
The Trends- The Trends- Technology EnablersTechnology Enablers
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eProcurement - What it iseProcurement - What it is
Spend Analysis – Job Number 1 All sources of spend Commodity classification schema
Strategic Sourcing eAuctions, eRFPs, eBids, …
Contract Management Authoring Approvals Reporting & Compliance
ePO Catalogue User Adoption Transaction Automation Backend Integration
Supplier Relationship Management Supplier Performance Measurement & Scorecarding Relationship Governance Compliance Innovation & Increasing Value
ePOePO
Employee selects product from electronic catalog and
creates requisition
ePO application routes requisition to several
approversApplication transmits PO
and sends to supplier network (CXML, OBI, EDI, XML format, fax, e-mail)
ePO
Supplier ships product/electronically
transmits invoice
Invoice Match to receipt and purchase order
Match invoice to checkfor supplier
Start
eProcurement - the business transactions between buyers and suppliers using the advanced electronic means of intranets, extranets and the internet.
Making ePO WorkMaking ePO Work
Selecting a system that will work for you: Understand what you are trying to achieve through this
exercise - trendy, catch-up competition, wring costs out of procure-to-pay cycle, empower users…
Work with suppliers that can make a difference for your pilot/proof of concept.
Make it easy to use: find products, codes, prices, approvals…
Event-based purchases: e.g. new hire’s phone, computer, network hookup, business cards,,,, or training workshop’s manuals, flip charts, overhead, markers, catering, room reservation…
Engage suppliers so they can get their offer to your people effectively.
30-second rule for a standard transaction - bookmarks of frequent and previously ordered items.
Integration into your systems - BOM, Catalogue, Budgeting, AP, GL… may require a Corporate Gateway system.
Easy administration for procurement & IT organization, auditing, business rules...
...
Catalogue Management:Custom catalogue for internal offerings and small, local,
service vendors. Combine with content aggregation (common look & feel) of electronic feed suppliers puts all vendors on same footing for your business.
Let users connect to supplier web-sites directly - back office integration a challenge, and may raise issues of user productivity and company control.
Open Buying over the Internet (OBI) generates a shopping cart at the supplier, transmitted for approval by the buyer’s management, then executed.
Use Web technology to update your intraweb catalogue from your vendors.
“Supplier Malls” third party operated on fee-per-transaction basis, often by vertical market.
Electronic auctioning - put your requirements out for bid. Brings prices down. Quality and consistency are challenges.
Don’t forget the contingency plan for non-catalogue items - 5-15%!
Benefits:
5-10% reduction in prices,
7.3 day cycle time reduced to 2 days,
$125 PO cost reduced to $35,
25-50% reduction in inventory costs.
Components of ePO:Self-service “requisition to payment” processing.Electronic catalogs and web search capabilities.EDI, ASN and other automated data transmissions.EFT, P-Card and other efficient payment options.Reporting and decision support.
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Collaboration & Integration - Collaboration & Integration - Driven by Business Driven by Business NeedsNeeds
Business Objectives
Strategy
Process
Data & Tools
Process change and integration is a business initiative that is enabled by technology.
Operating practices & policies stemming from integration are carried out with the aid of technology, not dictated by it.
Entrenching a process in technology is the like setting it in electronic stone
Exercise - Exercise - Collaboration & IntegrationCollaboration & Integration
Federal Express, Dell Computers, Grocery Gateway, and Wal-Mart are often held up as benchmark companies within their industries.
What makes them so successful?
What strategies do they employ?
What processes are they exceptional at executing?
What sorts of tools must they be using to support their processes.
Business Objectives
Strategy
Process
Data & Tools
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Technology Projects - Technology Projects - Key ElementsKey Elements
Data Applications Technology Strategy
Operating Environment Infrastructure Standards
Project Management Management Plan Scope Control Testing Team
Risk Management Change Management Project Execution
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Data Architecture & StewardshipData Architecture & Stewardship
Integrated processes require integrated systems that must share data: not sharing data leads to redundancy, discrepancies, divergence, slow responses & poor
decisions sharing data avoids manual intervention, data entry mistakes & compresses the cycle time
Capture data once at the source 80% of all computer printed output is re-input 1 P.O. will generate 10 - 15 pieces of paper 10% of world trade value is in document processing
Data should support the key business metrics that drive the business data structure and elements
Data is a major asset of any corporation protection & nurturing is required
Data cleanliness alone can improve process (low hanging fruits in many companies) data cleanliness has three variables
completeness, accuracy, timeliness data must also address proper content and presentation requirements requires well defined data ownership and responsibilities healthy data bases require robust monitoring and measurement tools to ensure clean data
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Laws of ComputingLaws of Computing
1. Technology breakthroughs require a surrounding infrastructure.
2. Size is the greatest determinant of implementation difficulty.
3. Enterprise solutions must be managed on an enterprise basis.
4. Things break!
5 Change causes the most downtime.
6. Industry standards channel innovation.
7. Market share wins, not technical eloquence.
8 Competitive advantage is hard to gain and maintain.
9. The scope of every computer project grows.
10. New computer technologies unveil new application opportunities.
11. Serendipity does not apply to computer systems.
12. If data resides in two places, it will be inconsistent.
….You must have a technology strategy to ensure you do not defy the immutable laws of computing.
Best of Breed or Integrated Package?Best of Breed or Integrated Package?
BenefitsSingle purchase contractTightly integrated functionalityConsistent user interfaceCohesive data modelSingle architecture & toolsetCoordinated release scheduleUnified product support
RisksInconsistent functional depthProduct scalabilityLimited functional or industry domain expertiseIncompatibility with legacy or tactical point solutionsLong product development and release cyclesMajor development investments with long amortization cyclesSlow response to technological or functional innovation
Integrated Package
BenefitsIndustry focus or functionally specialized expertiseFaster time to marketLower development costs and reduced riskCustomer buys only the applications they needFaster response to industry & technology changes
RisksNo common look & feelConflicting or redundant data modelsOverlapping functionalityMultiple vendor contractsNo single point of supportRelease synchronization problemsFrequently more expensiveNiche vendors often lack geographic coverage
Best of Breed
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Technology Strategy - Technology Strategy - GuidelinesGuidelines
Modularity & Scalability - The world changes, so should you Design with a modular approach. Design for the future, reduce the risk of obsolescence Design to minimize the cost of change for the users Design to middle ground, handle larger and smaller installations as one-offs
Standards -- Don’t reinvent the wheel Use industry standards & “off the shelf” solutions where possible Manage the trade off between standardization & unique requirements If standards don’t exist, create and promote them
Complexity -- KISS Design to minimize the operational effort to run the system Simplicity is preferred over elegance
Cost -- Engineering problems all have a cost component Design must be affordable Good technology is much cheaper than bad technology
Project Management: Project Management: IT Projects Have a Poor Track IT Projects Have a Poor Track Record...Record...
Over budget
exceed
schedule
60%
On time Within
budget
15%
Terminated, not completed
25%
META Group, 4/15/97
85% IT projects fail to deliver on time and on budget!
32
52
717
20
17
1. Inadequate Project Management
3. Poorly defined
objectives
2. Lack of communication
4. Organization not familiarwith project scope and complexity
The management of the project is
largely at fault!
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Project Management - Project Management - The Management PlanThe Management Plan
Describes the project strategy and approach. Is driven by the business case (benefits & costs). Includes the project vision and governing principles.
Establish success criteria. Picture of how success will be recognized. “Exit” criteria for each phase.
Develop a Robust and Flexible Management Process. Key milestones with Team & Executive reviews. Each task has a deliverable that is reviewed, tested and accepted. Be ready for surprises & the “never thought of's - plan some slack for these. Remember things never work quite as planned, make sure you have a
contingency plan and budget. Planning tools.
Balance between control & seat-of-the-pants. Don’t let managing the tools become the project.
Reread your business case and scope every week!
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Project Management - Project Management - Scope ControlScope Control
The Sand Box: Draw the line, discuss. Dig the trench, discuss. Pour the concrete, discuss. Let the concrete harden.
Impose evaluated change orders for every request. Make the Steering Committee approve them. Document and date each scope change and the forecasted implications.
Project review meetings must have a published agenda and a clear articulation of decisions needed at each meeting.
Manual workarounds can defer last minute requirements until the system is functional and stabilized.
Make the project phases work for you. The Pi law of Information Technology projects.
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Project Management - Project Management - TestingTesting
Why Test? To make sure you get what you want To make sure it works the way you want To make sure it performs well enough to support your businessImplication: Each of these must be articulated!
Test What? Installation testing – that installation was properly performed
on this platform, with most recent version Parallel testing – of Functionality, Integration and Regression
with current systems to ensure the results are consistent with your current systems’ logic, and if not, why not.
Volume & performance testing – ensures the systems support your business effectively (response times, cycle run-times) and expected peaks (raw compute capacity, update & data entry times, back-up times, print runs,…)
Security – ensure confidentiality (e.g. “ethical hacking”) Testing is a major expense. Do not be a “cost cutting hero”
by cutting back here. Plan and organize testing to catch problems early.
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Project Management - Project Management - Project TeamProject Team
Ensure your Champion executive level sponsor ensures executive concurrence and focus
Establish a Steering Committee provide a strategic sounding board & allocate corporate resources
Get the Right Leader leadership, direction, accountability
Focus the Business Process, not the Functional Organization ensure that all affected groups are properly represented
Human Resources, Finance, Sales, Marketing, IS, etc ensure the right experience & skill set
field & staff personnel
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Risk ManagementRisk Management
Technologies can and will fail to perform as expected. New technologies can and will always fail to perform as expected.
Look for risks in functionality, adaptability, obsolescence, secondary effects, deadlines, after sales service,
Ensure problem definition and evolution, standards, speed of innovation have been understood.
Publicly publish the project plan, document variances to the plan and committed corrective actions.
Keep an issue log and document resolution of each issue. IT projects are exposed to technical and conversion risks, organizational and
resource risks, financial and funding risks, and supplier failure risks. Recognize the risks you will have to face, prepare contingency plans. Be realistic, you will usually have to deploy these at some point. Plan project “off-ramps” if the project gets out of control, communicate and
publish the criteria that will trigger an off-ramp. Review and revise your risk analysis and contingency plans, at least once a
month, and More Frequently just before go-live.
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Change ManagementChange Management
Successful management of change requires several key elements:
Sponsor-ship
Vision High Priority
Business imperative
Resources Action Plan
Successful Change
Conflict & Little ChangeConfusion“Do it when we have spare time”Gradual Change
Frustration
False Starts
Identify the key playersIdentify the key playersSponsors
“Targets”
Change Agents
Project XProject X
The FutureThe Future
The BenefitsThe Benefits
..and rumours are always 10 times worse than the truth!!!
Rumour, myth, horror stories will emerge unless you tell people what is going on...
Over my
dead body!
Communicate
Recognize Resistance
£
BenefitsRisks
WIIFM?
Deal With Resistance
Change Management - Change Management - CommunicationCommunication
Status, Timelines,
Risks, Wins!
Formal/informal, letters/events/posters/
videos/logos...
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Change Management - Change Management - TrainingTraining
Different audiences can require different messages & methods main users & indirect users coaches & managers support staff
Delivery method hands on classroom instruction Vs Computer based training (CBT) real data Vs test data in house trainer Vs outsourcing
Train them, train them again, & then train them again training is a journey will spend 2X to 4X per person on training as software
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Project Execution – Project Execution – Data & Infrastructure ReadinessData & Infrastructure Readiness
Data Cleansing Cleaning it up Filling in the gaps
Data Conversion Moving data from the old world to the new Double your estimate of what you think it will take
Infrastructure Readiness: often a stumbling block instead of a building block Far too many projects fail because requirements were “revised” at budget time. Do not
skimp! Reality:
No one wants to invest in infrastructure Cautions:
LANs & WANs new wiring, bandwidth
Hardware upgrades clients, servers, etc
Inter-operability will it work with all of the other things
Set up a test environment
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Project Execution - Project Execution - Process IntegrationProcess Integration
Process integration Business & management practices: remember: the business, not the technology is
the driver Tie reward & recognition to key metrics of the new process
Performance measurement should be used as a key driver of change Structure
Does the new process require a different way of organizing? Project success
Who has most to gain by a successful implementation? Who might perceive they will lose out in the new order of things?
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Project Execution - Project Execution - PilotPilot
Pilots are an invaluable proving ground for all of the project elements: Communication Training Data Infrastructure Support Process Integration Functionality
Choosing the right pilot group is critical: Big enough to prove, small enough to contain Attitude and aptitude
Don’t underestimate the support requirements during start-up, and after Data Application Infrastructure
Project team must have a dedicated support representative Desk side support is critical during the pilot phase
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Leading for Success - Leading for Success - Lessons LearnedLessons Learned
Leadership and effective communication is critical Data cleanliness is a key success factor Systems literacy is a prerequisite Stand up classroom training is most effective, but hands-on
doing is also needed Where possible have real data loaded before training Development group must be responsive to resolving issues Early productivity gains will be marginal due to learning curve Application & infrastructure must be reliability Users must believe that there is value Metrics must be tied to management processes
In process metrics Results metrics
Assess the risks & be up front in communicating Quick hits vs the big bang Commitment to pre & post launch support
Closing ThoughtsClosing Thoughts
Fallacies: “Field of Dreams” “Bulldog with Lipstick” “Me Too” “Once and For All” “Islands of Collaboration”
Prerequisites: Vision driven Clear, customer driven value
proposition Innovative business model Ruthless execution (phasing) Real-time responsiveness
The Big Challenges: Data Discipline Technology Funding