InfoVerto: SCM and ERP Notes

ERP invades households for good

noreply@blogger.com (Puneesh Lamba) — Tue, 14 Jun 2011 07:14:05 PDT

Location : Earth Year : 2025 Scene 1: Suraj, who just joined “Worldwide Mart” 2 days ago, was in his way to deliver his first order to one of the customers and was apprehensive whether his details are already mapped with customer’s Unit Resource Planning (URP) system or not? He reached customer’s place and found that there is nobody at home. He tried scanning his hand on the door bell scanner and was happy to find that his finger prints matched with information in customer URP and the automatic door of delivery box fixed on the wall opened. He again scanned the ship order & invoice on the scanner in delivery box and kept the goods there. The door closed automatically once the activity was over and Suraj moved to the next customer address. Scene 2: Krish, gets a mail (delivered on smartphone) containing dashboard from his URP. The dashboard has a set of recommendations and suggestions. The URP recommended that since there is an acute demand supply gap currently in house-keeping services, he should renegotiate the rates of house maid, baby sitter and gardener with the agency. A drilldown facility allowed him to see what the prevailing rates are for this week. The dashboard also highlighted the utility and credit card bills that are due for payment. Krish authorizes URP to pay all bills on due date using intelligent payment system which maximizes interest income in saving accounts & credit cards. The dashboard also provides suggestions for holidaying, eating out and other leisure activities as configured by Krish in his URP. His life is made easy with URP and he is far less stressed than before and family life is as smooth as silk. Scene 3: Jacky, is standing at his home with his family and society caretaker and verified that nothing is missing from his house while it was tried to be ransacked by thieves last night when they were out. The Group Resource Planning (GRP) system installed by the society was subscribed by Jacky, which is integrated with the security system at his house. The security system raised an alarm upon an intrusion and in addition of the alerts that went to prescribed people/groups, information was sent to GRP too which not only closed all possible exits from society but also sent alerts to all subscribing households in society. The thieves were struck inside the house only and were captured by police red-handed. You must be wondering what is a URP and GRP when this article is for ERP. Well, ERP, over the years have evolved and has expanded its reach from large, medium and small enterprises to households and group housing societies. For a house, it is now called as URP (Unit Resource Planning) and for a Group of units; it is called as GRP (Group Resource Planning). The clouds have taken over and there is no need for people to invest in hardware to take benefits of ERP just they do not have to build a powerhouse for drawing power to run their appliances at home. Scene 1 showed us how automated deliveries from retail marts to houses will happen with hand/finger scanning systems installed at homes which means that an authorized person will deliver the goods and even when there is nobody at home. The orders will be placed through smart phones and all systems will be integrated to process orders and payments. Scene2 showed us how our lives will be made comfortable with ERP/URP with an electronic personal assistant taking over and completing all important tasks either by providing recommendations or if authorized, finishing them on their own. Security is another area (Scene 3) where ERP/GRP will act as our personal watchman which will have less than 0.2% probability of failure (Six Sigma) and people can travel to spend their vacations without worrying about the thefts etc. till the thieves come out with another novel way to intrude. I am convinced that ERP is here to stay and will be further invading our lives in future. Only software programs like ERPs will be able to control the robots that humans are planning to use for home chores in future. In addition, ERPs also have the potential to educate our children finding their improvement areas when they record their progress in them. The potential is huge and only things like ROI, hunger for more etc. will drive its use among larger population.

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Budgeting, Forecasting and Financial Planning: Critical Success Factors for your organization

noreply@blogger.com (Puneesh Lamba) — Sat, 28 May 2011 21:09:11 PDT

An effective financial plan is the means by which an organization underlines their strategic business financial objectives. A well-thought and prepared financial budget creates the platform for effective decision-making during the performance period. And it also forms the basis for the forecast which enables organization to plan future goals based on recent actual performance. All best in class organizations today need to have the tools that provide highest visibility and maneuverability for balancing plans with real life. Just to measure, please ask questions to yourself:What is the overall budget accuracy level for your organization What is forecast accuracy level How much improvement, the organization achieved in profitability year over year How many times your budget was ready before next fiscal year What is the level of process standardization in the organization These will give you a small idea on where are you placed currently. You will find that following actions will help you achieve Best-in-Class performance:Use technology to automate and assist in the budgeting process Have visibility into all factors and collaborate with all stakeholders Consider alternative scenarios and have the ability to change forecasts, plans, and budgets mid-stream Cost controls have remained a significant driver of the financial planning and budgeting process throughout the past four years and have only intensified again this year. Efficiency of the process rounds out the top four challenges in spite of the fact that it typically happens only once a year. Yet it also happens at a time when the urgency of closing out a fiscal year is most intense. There is risk in focusing all the attention on the present at the expense of careful planning for the future. Overall budget accuracy reflects the ratio of actual revenue and cost (bottom line) to budget, with 100% accuracy as the ideal. A budget which is 100% accurate is reflective of either an accurate prediction of revenue and costs, or good controls in place to manage against budget, or both. Because of the continued emphasis on the ability to respond to changing market conditions, forecast accuracy is also included in the Best-in-Class criteria, reflecting the rising importance placed on agility. Accuracy is tempered with improvement and / or preservation of profitability. While achieving budget and forecast accuracy is viewed as important, it cannot come at the expense of good business. An organization’s ability to finalize the budget prior to the beginning of the new fiscal period is indicative of the performance of the financial planning and budgeting process. The use of automation to assist in the planning process leads to an efficiency that is very hard to achieve only with manual processes and the ubiquitous spreadsheet. Automation of the process not only boosts efficiency, but also helps insure that standards, methodology and proper review cycles happen as planned. This automation is essential in analyzing driver based scenarios and providing "what if" analysis. The steps to success as per us are:Use technology enablers to receive alerts triggered by internal and external events Increase the frequency with which forecasts are updated Perform "what-if" scenarios and change analysis before finalizing plans Use technology to be automatically guided through steps of the financial planning, budgeting, and forecasting process Establish enterprise-wide collaboration from the top-down and bottom-up as well as across departments Align sales forecasts with overall business revenue and cost forecasts Go ahead and give them a try to check-out how much they benfit you.

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Best Practices: PLM and QMS Integration for your organization

noreply@blogger.com (Puneesh Lamba) — Wed, 25 May 2011 08:49:45 PDT

The impact quality can have on corporate performance is often misunderstood and underestimated by manufacturing organizations. If we examine the design-make-deliver processes, there are a number of workflows where the incorporation of a closed loop quality management initiative would yield tangible benefits. Largely, it has been observed by InfoVerto that manufacturers that have implemented a PLM and quality management interoperability solution, are better able to manufacture products and subsequently get them to market quicker and at a higher quality, all while streamlining operations across the design, make, and deliver process. To present it with facts, organizations with PLM and Quality Management Interoperability had 83% overall equipment effectiveness (OEE), 80% successful new product introductions (NPI) and 90% on-time and complete shipments whereas organizations without PLM and Quality Management Interoperability had 81% overall equipment effectiveness (OEE), 75% successful new product introductions (NPI) 88% on-time and complete shipments. This data bring two facts – 1st that PLM & QMS interoperability makes organizations more efficient and 2nd that there are some best practices that if followed can make your organization better equipped. To go a little further, in fact, across the board, these manufacturers are able to achieve an 83% OEE rate, which shows that these companies are better utilizing their assets because of improved quality capabilities, as well as, enjoy 6% more successful new product introductions. In the case of certain industries, even a 1% or 2% increase can have a significant impact; a 6% advantage can translate into millions of dollars of business. In addition, these manufactures were also able to achieve 90% on-time and complete shipment rate. Companies that have yet to implement system interoperability between and QMS software can use this research to understand the best practices implemented by those companies that have, and use this information in their strategic as well as tactical actions. Up until this point, we've addressed the importance of having PLM and QMS software interoperability. And while this interoperability is a key enabler, achieving Closed Loop Quality Management takes more than a technology implementation. It takes an enterprise-wide commitment to quality, a culture of operational excellence, and providing employees with the right quality information, at the right time, and in the right context. When looked at in their entirety, this set of business processes enables the incorporation of quality management into the complete lifecycle of products and processes across engineering and manufacturing. In a nutshell, the best practices that will help companies achieve closed loop quality management and are associated with improvements in a number of key performance indicators are:Standardize processes for responding to adverse events across the enterprise Executive sponsorship for closed loop quality management Perform quality planning early Invest in PLM and QMS software interoperability

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What is your reason to go for eProcurement Initiative?

noreply@blogger.com (Puneesh Lamba) — Thu, 24 Mar 2011 06:22:56 PDT

Successful technology management provides an opportunity for procurement departments to meet or even exceed established business targets by increasing spend and capturing savings generated through the innovation it provides. To attain procurement goals through technology in future, companies may look to expand, update, or even replace their current platforms. Yet to garner executive support for these investments, eProcurement initiatives will need to demonstrate continued measurable benefits. In a survey by InfoVerto, we intend to find out which are the top reasons or justifications that CIOs or CPOs have to go for eProcurement initiatives. The top reasons as per InfoVerto are given below: Increase visibility into spend & its increase Simplify the buying experience for the end-user Measure compliance against negotiated contracts Incomplete coverage of spend types / catalog categories Confusion on policy and requirements for buying products or services Confusion on policy and requirements Employee reluctance to use the eProcurement system(s) currently in place Difficulty in understanding/leveraging information generated in the eProcurement system Increased operational cost of IT management for existing procurement solutions Difficulty in finding desired products or services in the eProcurement system's catalog(s) Set targets to improve the efficiency of the procurement Institute a change management program or internal marketing campaign for eProcurement Lower the capital cost of IT management (hardware, facilities, software licenses) Let us know if there are other reasons or your reason is one of these in the above survey.

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ERP: To have or NOT to have?

noreply@blogger.com (Puneesh Lamba) — Wed, 16 Mar 2011 06:51:11 PDT

ERP products and implementation both are expensive in terms of not just cash outflow but also considerable resources are engaged in its deployment for around an year, first for going LIVE and then a painful change management process takes away initial productivity of staff to make sure that all intended users use it as the primary application for the organization. Also, as complex a system as ERP is, the decision-making around selecting, upgrading, and changing an ERP system is even more complex. The system touches almost every aspect of planning for a manufacturing company, from budgets and reporting, to detailed inventory and production scheduling. It becomes the foundation for growth in both operational efficiency, as well as growth into new, distributed markets. As profitable growth returns in 2010 and 2011, companies are taking advantage of the cash they are sitting on to expand IT budgets and shore up their business infrastructure. Manufacturing companies are deservedly notorious for being focused on cost. But scratching the surface of company priorities provides a little more insight into changing business drivers. While cost continues to be a primary challenge for all business activities, managing growth and the customer experience are close behind. Interestingly, companies without ERP are feeling more pressure to improve the customer experience and innovate. This is derived from having a lack of systems or scattered systems that can frustrate, or at a minimum, be a drag on customer interaction.InfoVerto recently measured the benefits of deploying an ERP for a couple of manufacturing organizations and got few contrasting figures. Both the organizations used same ERP, were of similar industry profile and size but were operating in different geographies. Whereas, the results for first organization were:22% reduction in inventory levels 97% inventory accuracy 3.4 days to close a month 96% manufacturing schedule compliance 98% complete and on-time shipments The other organization could boast of just below:3% reduction in inventory levels 90% inventory accuracy 7.3 days to close a month 73% manufacturing schedule compliance 84% complete and on-time shipments What does it tell us? Oversimplifying it will take us to a straight forward conclusion that deployment and sticking to the solution is much better for first organization. But, just to look at the other side, one of the organizations in our sample did not have an organization wide ERP but their measurements were also good, as below:90% inventory accuracy 7% operating margin growth YoY 5.3 days to close a month 87% manufacturing schedule compliance 89% complete and on-time shipments These were much better than the 2nd organization with ERP so this question came into our mind, if ERP is required for better efficiency or we can do without it too? Well, a simple answer is that every organization’s dream is to become best in class and if we again have a look at the results of the 1st organization, we will find that they are much ahead of the rest two. The other benefits for the organizations which implemented ERP Solution are typically:Streamlined and accelerated processes to improve efficiency and productivity Standardized business processes Optimized use of current capacity Visibility to business processes across functions and departments Modernized technology infrastructure and applications Less number (& cost, pain etc.) of disparate enterprise applications in organization Linked global operations to improve interoperability and collaboration Centralized selected functions using shared services Integrated disparate enterprise applications So while some of the organizations might think that having ERP is more of an issue than not to have it but it is always a case of getting ahead of competition by deploying state of art solutions. Regardless of how efficient you are, a good ERP implementation will make you more efficient. You should focus on streamlining and standardization of your business processes as a goal for your system. Selection of your ERP should be as much about defining the functions you need to grow, as well as the ease of use for the entire strata of users in your company. One critical aspect of the selection process will be the definition of ease of use. And that is something each company must define on its own. Evaluate it yourself!

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Selection of right WMS Software for your organization

noreply@blogger.com (Puneesh Lamba) — Wed, 29 Dec 2010 08:00:17 PST

Software selection is always tricky and when the software is for improvement of productivity, automation and standardization, it becomes all the more important to evaluate it objectively so as to make sure that the objectives are met. The selection of a suitable Warehouse Management System (WMS) system is a key objective for many companies today. Properly fitting the correct software solution to the operation is critical, more so than for many other types of software. Best WMS can be the piece of enabling technology that allows organizations to achieve these goals and improve their profitability. A failed WMS implementation, however, has the potential to put a company out of business in a worst-case scenario. Many companies have also been disappointed to see that their WMS implementation involved much more resources than anticipated to implement, and took much more time than budgeted. Additionally, a poorly fitting WMS can cost a significant amount of ongoing money to maintain and upgrade. So, what should be the criteria for selecting the right WMS Software? InfoVerto believes that organizations should first finalize the value propositions which are best aligned with their needs and then start evaluating WMS software among the shortlisted solutions against those value propositions. Since distribution organizations are the ones which need WMS most, let us see what can be the value propositions for them:Full features and functionality: Distribution companies with this strategy seek a software system with a robust feature set which includes WMS, labor management, slotting, order management, and other features, all available on a single platform. There is generally minimal need for third-party integration. Extremely high rates of transactions may also need to be supported. A trade-off these companies may need to make involves system investment – these solutions generally have a higher upfront cost than with other providers Flexibility and adaptability. Companies looking for more flexibility may have highly unique business processes which need to be accommodated, while still maintaining the ability enhance and upgrade their system in the future. These companies should focus on systems with a high degree of user-configurability, often achieved through Service-Oriented-Architecture (SOA). These companies often have strong internal IT capabilities and are able to create custom workflows in the software system with minimal outside assistance. The software systems which fit these needs sometimes cost less than those in the first group. A trade-off these companies may need to make, however, is that some of the more advanced features they seek such as order management, yard management, labor management, and slotting may need to be integrated from third-party software providers as they are not a core part of the WMS Short time to value. Companies with this need often have a low level of process complexity in the distribution center, as well minimal amounts of automated material handling equipment. These organizations seek a basic, no-frills solution that can be implemented quickly and which will allow them to address their most pressing areas of inefficiency. These companies have often accepted the fact that the solution they are searching for might only meet their needs for the next three to five years, and are willing to implement a more robust solution in the future Ease of enterprise integration. Many companies seek a warehousing solution that is very closely integrated into their ERP system. They may not wish to build a WMS/ERP interface themselves, or take responsibility for costly upgrades and maintenance of this interface. These companies do well to investigate WMS solutions which are offered by their ERP providers. The range of features and functionality available in ERP-based WMS systems vary broadly. Some of these companies have developed native WMS applications while others have developed them through acquisition. Depending on the ERP currently in use, some trade-offs may need to be made in terms of features and functionality Ease of MHE integration. Companies with a high level of automated Material Handling Equipment (MHE) such as conveyors, carousels, and AS/RS systems often seek a solution that is closely integrated to these systems. They may seek a solution that will give them a single point of visibility and control over these devices with the ability to support very high transaction rates. These companies do well to investigate hybrid WMS/WCS solutions developed by manufacturers of MHE. As with the previous category, companies in this group must be often willing to accept fewer features and functionality out-of-the box Industry focus. Some companies may seek a solution that is tailored to their industry and already has special workflows and features that are unique to their business. Third-party Logistics Providers (3PLs) and retailers often fall into this category. Any industry-focused solution, while providing specific functionality, may also limit a growth options for companies that plan to expand operations across industry boundaries Just choose your picks and go for the right WMS software. To further assist the organizations with few prominent WMS solutions, InfoVerto has provided the list below in alphabetical order: 7Hills Business Solutions Accellos Boxworks Cadre Technologies CDC/Catalyst Click Commerce Daifuku Deposco Epicor WMS Fox Fire Technologies HighJump HK/Irista IES Infor WMS Intellitrak Knighted Computer systems Lawson WMS Logility Lognet Made4net Manhattan Associates Microsoft Minerva Associates Motek Next View Oracle WMS ProAct Reddwerks RedPrairie Retalix SAP WMS Savant SmartTurn Softeon Sologlobe Sterling Commerce Swisslog Tecsys Viewlocity Zethcon

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Virtualization: It is the need of hour for IT organization today

noreply@blogger.com (Puneesh Lamba) — Sat, 20 Nov 2010 19:07:28 PST

Today there is a great buzz around the benefits of virtualization. The term “virtualization” has taken on great marketing value. However, the term has disparate definitions - suppliers of network gear, desktops, operating systems, security, and outsourced services all have assigned the term very different meanings. Even within the storage industry, there are widely differing definitions as to what constitutes virtualization. Most storage solutions support virtualized storage over and above the basic concept of Logical Unit Numbers (LUNs) and centralized management of the arrays. No two storage virtualization solutions are exactly the same, with some being widely different from the others. There is, however, a common element: storage virtualization means adding an abstraction layer of software that hides the physical devices from the user and allows all devices to be managed as a single pool. This means data is represented differently from where it physically resides and it is managed as a logical unit. As the storage virtualization market matures, the definition will narrow into a commonly accepted set of functions. The common goal for everyone is to easily manage data across multiple platforms, solutions, and technologies and allow effective allocation and reallocation of resources with no planned or unplanned downtime. Virtualization is gaining ground and one contributing factor to this rising demand is the virtualization of servers and PCs, which increases the amount of data that needs to be stored centrally. For example each server VM (virtualized OS and application stack) has a copy of the operating system, rather than sharing one copy of the OS across multiple applications on the same server. Storage virtualization enables more efficient utilization as all forms of storage (NAS, SAN and server-based disk) by collecting and managing them together as a single unit with no stranding of storage assets. Virtualization is a complex process and needs to be thought completely through before implementation begins. A well disciplined IT organization should have formal plans in place for every major project. All IT organizations are under great pressure to deliver more with less. While storage virtualization is relatively new, all of us have enough information to strongly recommend a set of best practices for organizations deploying this technology: Make a plan. Company management needs to understand the goals and objectives of deploying this new, additional layer of technology Formal training on the tools. Storage virtualization adds an additional layer of software that can either enhance the performance of the datacenter or add to its complexity. Formal training can ensure that these tools are successfully installed and performing as required Measure the results. In concert with the plan, organizations should measure the results of any new technologies implemented. . Only by understanding the real results of deploying new technologies, corrective actions can be taken or further investments be made to enhance the performance of the IT infrastructure So what are you waiting for? Go ahead and evaluate your virtualization needs to remain ahead of the curve.

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Leverage item level RFID tagging to achieve organizational objectives

noreply@blogger.com (Puneesh Lamba) — Sun, 24 Oct 2010 16:51:00 PDT

Re-evolution of RFID (Radio Frequency Identification Device) lately as an enabling technology has prompted retailers to investigate the value of the technology across four major objectives: process efficiency, product and demand visibility, shrink management, and increasing profits. Due to this reason, most retailers across all segments of the industry are implementing RFID solutions, measuring the results of their initiatives, and searching for ways to leverage the technology in every part of their business. Retailers are now approaching RFID with confidence, seeking ways to minimize their risks while maximizing their returns and making core business processes, in-store operations, and customer-facing activities cheaper, faster, and more accurate. Directly and indirectly, usages of RFID tagging of items help the retailers in: Reduction or Elimination of full manual inventory calculation Improve staff productivity Reduction in cost of labor Improve on shelf availability Smarter replenishment process Reduction in pilferage by customers and employees Obsolescence reduction Increased inventory accuracy which leads to lower safety stocks, better usage of working capital, more inventory turns per annum etc. Reduction in out of stock instances As is the case with most technologies that enable business process transformation, the return on the investment is not limited to the obvious metrics, nor should it be. Often, the most beneficial returns from an RFID initiative are to be found in non-obvious or unanticipated areas. These areas can be Success of in-store product promotions, improved employee productivity and improved (reduced) customer wait time etc. Recently, we have seen best in class organizations have started taking actions like below to achieve the organizational objectives very efficiently with the help of RFID technology:Monitor customer in-store purchase activity and correlate it with real-time inventory management. Having achieved customer behavior monitoring and real-time inventory visibility in the store, organizations are positioned to extend their competitive advantage through information integration and analytics Leverage automated alerting. To turn real-time merchandise visibility and real-time customer behavior monitoring into operational excellence, it is essential for personnel to have instantaneous detail information about what is happening in the store. This goes well beyond understanding when an item is leaving the premises without authorization; it includes proactive management of in-store promotions, redirection of staff to high-traffic services, and seamless interaction between online sales systems, in-store stock status, and service desk activity Deploy advanced customer-facing services. Much research has been done into the value and utility of interactive fitting rooms for the fashion and apparel segments; yet, very few instances of this technology are to be found in current use. Intelligent customer service applications are as applicable in hardware and furniture as they are in footwear and fast-fashion. Whether it is measured in customer wait-time reductions at the register or waiting for a sales associate to check the back room for a SKU, RFID-enabled advanced customer service improves the customer experience, increases sales, and improves job satisfaction. All retailers, from Best-in-Class to Laggard, must study the impact of RFID on the customer experience

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Check for important features before selcting reverse auction solution

noreply@blogger.com (Puneesh Lamba) — Sat, 09 Oct 2010 21:40:00 PDT

Procurements costs are a substantial chunk of the total supply chain costs and best in class organizations always strive to drive deflation in their procurement costs keeping transparency and quality intact. Reverse auctions have proven to be quite an effective tool over the years, in this endeavor and have allowed the organizations to rule the prices to a larger extent in addition of making sure that the vendors agree to the terms and conditions first and then quote their prices. The process of reverse auction starts with doing some homework by the buyer organization to set the terms and conditions, pre-qualification criteria, specifications of the items/services to buy etc. and then an auction event is set up in the platform that they have deployed for this. The pre-qualified vendors (other vendors can also be invited) gets communication from the buyer or by the reverse auction service provider on buyer's behalf and they are notified about the event time, duration and other modalities. when the event starts, the vendors log in using their user id/password combinations and start bidding on the items/services. Since they can start bidding in the event only below the start price stated by the buyer, the buyer can control the prices to an extent. Also, since the process is transparent with vendors able to see the lowest bid value (but not the name of vendor who quoted it), they try to outpace each other and quote their best prices.This ensures that you get the best price for your buy and that too from the pick of vendors that you selected to be part of the process. There are multiple solutions available in the market these days as reverse auction has already been proven as an effective tool to reduce costs, improve efficiency and transparency and brings host of other benefits to the organizations. The key features that you should look for, while evaluating the solutions are:Vendor name encryption: To maintain transparency of the whole process, it is imperative to have a feature which allows you to control, who in the organization can see the actual names of the vendors who are bidding in the event. This will make sure that if a buying executive within the organization has some friends in a vendor organization, the quotes are not leaked to them during the event and we have a fair play. On the other side, some senior executives like the chairman or CEO would like to see the actual vendor names instead of encrypted names. So a feature to control this ability is a must have in a reverse auction solution Different pricing models: Depending upon parameters like available time with existing teams, volume of auctions in a year, intricacies of business, specifications of items/services, ease of operations in reverse auction platform etc. you might want to try out multiple pricing options and the more popular ones are: Pricing per event - this is more popular if you want the service provider to create complete events for you), unlimited events for a lump sum fees - this is useful if you have the self service option and your team creates and manages the whole event on the service provider's platform, %age of spend in year - popularity of this model is going down these days, share of the saving you achieve by using reverse auction processes - this model is offered to those organizations only which measure the procurement costs as a general practice and have historical data to prove what is the as-is state: choose the best pricing model Refresh time of bids: Refresh time is the time taken by the platform to refresh the data entered by different bidders to show the buyer the latest data. This varies from 5 seconds to 30 seconds normally but it is important to weigh your requirements in details before you try to select the service provider Self Service and Assisted Events: The option to have self service events as well as assisted events is an important one as it allows you to move from self service to assisted event if there is some attrition in your team or the workload is huge in a specific period. An assisted event is the one for which the vendor communication, bid form design, managing the event etc. will be managed by the service provider and you just have to watch the event going on Spend analytics and Reporting features: Managing events is one activity that will help you save costs but to further drive deflation and to know which vendors are getting most orders - what is my spend per vendor etc., you will need some spend analytics capabilities in the solution. Look for these capabilities and match with your requirements The above are some important features that are required to be looked at while your evaluation process is on. But please note that the above list is nowhere near the exhaustive list and you should first write down the requirements in details, map them to the capabilities of the solution and then take a decision.

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What can a Best in Class ERP implementation do for you?

noreply@blogger.com (Puneesh Lamba) — Sun, 03 Oct 2010 18:00:01 PDT

Last week I got the opportunity to attend a seminar on new technology trends around enterprise applications hosted by one of the leading consultancy companies. The seminar was very informative and lot of participants like me were excited about the new options that are opening up in enterprise applications field to take leverage from and further improve the efficiencies and effectiveness of teams and operations, specially supply chain and financials. I got to meet few industry leaders also who shared their viewpoints about the successes and failures they had around deployment of erp solutions and whether their expectations were met or not after this initiative. As always, the views varied but a question that almost everyone had, was how to evaluate whether they have the best of the solutions as per their industry standards and organizational needs, is it dependent on the results alone or do we have some other parameters also to check if we were successful enough or say best in class in this intiative. To answer this, let me share some results from so called "Best in Class" implementations that I have witnessed during my career. For an organization where supply chain was their major pain area with inflated but incorrect inventory, haywire manufacturing schedule compliance etc., the results they could finally achieve were:23% reduction in inventory 98% accuracy in inventory 35% improvement in perfect orders 94% on time delivery (up from approximately 78% - this there was no trusted means to measure it earlier) 93% manufacturting schedule compliance - this was most difficult to achieve for them as lot of change management was involved 24% reduction in item obsolescence Having given above example, it is not that all results of an ERP implementation are tangible and if you do not get them, your initiative is a failure. NO, this is not at all the case. Process standardization, greater compliance towards regulators as well as putting controls in place to reduce revenue leakage in multiple ways and having a single source of truth are few of those non tangible benefits that you will get from a successful ERP implementation and they should also be given equal weightage while evaluating the success or failure of your project. For example, for a project based organization, one of the most important benefits will be to restrict buyers to their budgets as defined in the application so that the sanctity of budget is maintained and the management knows at all point of times, that what is the current status, how much they have to spend in the coming period etc. Also, this will ensure that people start giving accurate budgets so that they do not have to go to the route of getting it revised whenever they exceed it - and believe me getting your budget revised is not an easy task in any organization. Then, opportunities like scalability, easy reporting, manage growth, ability to do actual costing and better calculations of profit margins, collaboration with suppliers and customers etc. are equally priceless which we tend to miss while trying to measure the value that was brought by an ERP implementation. The list is endless and depends on what do you expect from your project - while it is ideal to say that we need to define and detail out in advance about the parameters and objectives - but in real world, it is difficult to get this done at a granular level, specially if you are implementing ERP for a first time and not moving from one to another. So, it is better to start measuring the project success after 6-9 months of going live and after checking the improvements that you could see in your operations.

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Financial Consolidation: A pre-requisite for BI Tools Deployment

noreply@blogger.com (Puneesh Lamba) — Sun, 26 Sep 2010 17:27:00 PDT

Today's enterprises do not have a simple structure with multiple business entities at multiple geographies, large number of joint vetures, subsidiaries, acquisitions, de mergers etc. and all this is adding to complexities of financial reporting. Add to this, different currencies, legal requirements, ever changing leadership formats of reporting and you have a substantial challenge in front of you. A typical structure of a large transnational organization will have parent organization with multiple subsidiaries and some of these subsidiaries would have acquired few other companies which might have their own subsidiaries in few countries. Then there will be different business lines or verticals which operate independently or have joint ventures. Now, consolidating the financial data from all these entities is a challange and most of the time your transactional system or ERP will not be able to help in this specially if more than one system is being used in these entities. Another important point is that the business intelligence tools will also not be able to help in giving the correct information as data is available in piece meal and the real picture is not captured. While deploying a business intelligence solution, it is imperative that our data is first consolidated with the help of either a financial consolidation tool or the module of the Enterprise Performance Management tool you have deployed. The major benefits of data consolidation will be:Get a single source of truth: These Provide a single version of the truth to support financial management and statutory reporting Accelerate reporting cycles: Substantially reduce the period closing cycles and deliver more timely results to internal and external stakeholders across the globe Improve transparency and compliance: Helps reduce the cost of compliance (as stipulated by the Sarbanes-Oxley Act, IFRS, electronic filing, and other regulatory requirements) and support disclosure requirements, such as sustainability reporting Perform strategic analysis: You will spend less time on processing and more time on value-added analysis Deployment of Business Intelligence tool will be much easier and highly useful if it is done after financial consolidation exercise and will help you in getting expected results. (Yes, the scope of this article is only financial business intelligence and not includes supply chain intelligence etc.). The benefits that you can reap after deploying your BI tool can be: Aigning the enterprise with its KPIs Assist leadership take faster and fact based decisions Simulation of scenarios and doing what if analysis Allocation and re-allocation of costs and overheads across entities without distrubing the transactional system entries No need to look at multiple sources of data All above can be reaped in a much better way of we consoildate the financial data first and then utilize the BI tool to provide the required dashboards and reports.

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Strategy: Improve business efficiencies with ERP Health Index

noreply@blogger.com (Puneesh Lamba) — Sun, 19 Sep 2010 09:40:00 PDT

Business efficiencies can never reach a level that satisfies a CEO completely which simply means that we need to constantly keep on improving on it. As you will iron out one area of business processes to make them more efficient and effective, the other areas will starting popping with new inefficiencies as per the market dynamics and everytime it is not the fault of the employees but the new requirements of market force them to take their own small measures to adapt to the newer practices which might not be best practices and these continue bringing new inefficiencies. One of the measures to reduce these inefficiencies is to constantly review them and address the business issues urgently and the 2nd option, whihch we will talk here in detail, is utilizing your ERP Health Index to improve business efficiencies. To start with, what is an ERP Health Index? Do you have one for your ERP? Well, let me start explaining the concept of ERP Health Index or EHI. Every ERP has a set of processes mapped to the technology as per the business metrics or Key performance indicators (KPIs). during the course of implemeting the ERP solution, these business metrics are identified, frozen and a processes is setup in such a way that these metrics attain their best values. Normally, what happens after some time, that due to reasons like market demands, lack of co-ordination within departments, new systems coming into place and getting integrated with ERP, new features implementation in ERP etc., the best practice processes which were put in place while solution deployement are either changed or are not best practices any more and need to be changed. Now, how do we measure this? How will we make sure that our ERP still has the best solution suited to our business? EHI helps in measuring these changes and you can achieve following:Know the existing state of ERP in terms of the business metrics and KPIs Helps to find out the desired state of ERP Assists in creating a roadmap for reaching the desired state in certain time frame Normally an EHI has 2 important sections and that are: functional - which focusses on KPIs measurement, their best in class values and ways to improve those KPIs and, technical - which focusses on the technical aspects of ERP telling you about the performance of the instance, inegrations, data duplicacy and redundancy in the system etc. Both these sections have a set of configurations and scripts that will extract information from your ERP, present them as a dashboard, compare them with indutry best in class standards and recommend the actions that will help you improve your processes in ERP to ultimately improve your business efficiencies. I will be happy to share more details on the modus operandi of EHI and its ingredients if anyone is interested more in this. Don't worry - the information you may want from InfoVerto is not chargeable at all.

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Strategy: Leverage ERP to increase vehicles utilization

noreply@blogger.com (Puneesh Lamba) — Sun, 12 Sep 2010 18:09:00 PDT

Large fleet owner organizations, whether they are 3rd party logistics companies, EPC companies or others, have sizeable costs of vehicles running during rendering services or projects for their customers. Moreover, controls on right usage of these vehicles is increasingly becoming a substantial issue with the cost control officers due to reasons such as usage of these vehicles by employees for their personal use, pilferage or leakage of fuel, reducing fuel mileage, increasing maintenance cost due to missed dates or more frequent maintenance than required, age of vehicles versus their retainability in fleet etc. There are multiple other reasons that have started forcing the organizations to keep a tab on these vehicles and define the key performance metrics for them. While agreeing on the metrics is the easier part, the difficult part is to start monitoring them because of obvious resistance from employees, manual readings, increased data entry etc. Leveraging your ERP in recording these metrics can become a boon for you as it will not only reduce the need of manual readings as well as data entry but will also make sure that the vehicles are properly maintained as per their service needs and the cost of vehicle maintenance goes down. The technology usage such as radio frequency identification devices deployed on the vehicles, when integrated with ERP for sending required metrics helps ERP to take appropriate actions within the application and also send reminders to the maintenance engineers or department to schedule the vehicle maintenance. ERPs can be configured as per the needs and requirements of the vehicles performance monitoring metrics and when integrated with the vehicles (and their measurement systems), can get you rid of the manual activities (and touchpoints) bringing in accuracy, automation and host of other benefits. Once the data is collected within the ERP, it can be tabulated and analyzed too for further refining of vehicle usage as well as to find out more metrics that needs monitoring (like downtime, suitability to the tasks etc.) to further reduce costs and right sizing the fleet.

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Trend: Blend BPM with your ERP to save cost

noreply@blogger.com (Puneesh Lamba) — Sun, 05 Sep 2010 18:29:00 PDT

ERP is a well known business transformational system and almost all of the best in class organizations have deployed it to conduct their business. We all know that ERP is not one of the economical solutions and takes lot of organization's resources while deploying and after deployment to maintain and continuously improve the design, data structure and configuration. These days after just concluded recession, the focus on cost is more than ever and every investment needs to go through a magnified scanner before they are approved. While continuous improvement and innovation is essential to stay ahead of the competition, it has now become more important to come out with a ROI based approach and there is when the role of BPM or Business Performance Management comes into picture. BPM has multiple definitions, but if we state it simply - it is meant to manage the performance of business through a set of processes that defines goals, KPIs, metrics etc. against which a business is measured. Though the metrics decided by business can be measured by using ERP itself but lately it is seen that usinf much evolved BPM solutions have started making a considerable impact on the way these measurements are done and corrective actions are taken. The ROI of these solutions is also much improved as BPM solution deployement in most cases is economical. Till some time back, BPM solutions were being used for categories like:Strategy Management Financial planning, budgeting and forecasting Reporting and consolidations Profitability and cost management In addition of above categories, now BPM is increasingly being considered as the essential extension of ERP in areas like Supplier payment processing, credit management, sourcing etc. and it is time that we also start looking at the positive and the negative aspects of using a BPM solution to complement our ERP deployment and take more and more benefit from it.

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Prioritize your focus areas for best benefits from your ERP

noreply@blogger.com (Puneesh Lamba) — Sun, 29 Aug 2010 19:05:00 PDT

In one of the recent meetings with a group of CIOs, I heard this loud and clear from more than a handful CIOs that though they have implemented ERP and have waited for couple of years to stabilize the processes but still the expected benefits have not been able to impress them as well as the CEOs. Going into details, one common thread that came out from all of them was their extra wide focus areas. When asked about in which area, the results were far from satisfactory or which areas you were focusing on get the low hanging fruits first and then aim for the higher ones, the reply that I got is that they focused on getting all the benefits and have taken quite a good amount of initiatives to make them happen with the help of ERP. Quite a decent strategy! But then, why they are still unhappy or rather I should say less satisfied? Is it the ERP as product or their processes or the expectations or something else? Together we tried to go deep into it and picked couple of cases from the group and the findings were enlightening. Though I will not be able to share the name of the organizations, CIO names or the exact findings but I would like to share the strategy that came out after this post mortem of their existing strategies which left them less satisfied with their ERP deployment. The clear cut strategy was multifold, but it was suggesting in more than one ways that instead of firing bullets in all directions, the focus should be on fewer directions and in phases. Say for example, a typical organization wants following benefits after ERP implementation at their end:Cost reduction due to process standardization, automation, improved end to end visibility etc. Improved working capital due to lower and accurate inventories, less obsolescence/scrap etc, better payment terms etc. Better customer satisfaction due to improved on-time delivery, communication/response time, perfect order fulfillment etc. Effective strategic decisions by executives due to crystal clear MIS, reporting etc. Improved compliance due to process controls, monitoring etc. Higher collaboration between teams, with suppliers, with customers etc. increasing efficiencies and reducing cost of operation Improved staff efficiencies due to smaller period closing activities, automation etc. Finally single source of truth for everybody to benchmark and plan accordingly There will be many other benefits an organization can get but the objective of listing some of them above is that if we start focusing on everything from the start, there are chances that we are not able to do justice with all of them and lose steam on some of them or even all of them when our patience runs out. A larger group has always less patience and tiny but focused groups with smaller milestones will always have higher success rate. So the strategy here should be that we need to prioritize our focus areas in such a way that we pick some of the critical ones along with the few low hanging fruits in the first phase - implement your action plans and then move on the next phase with a similar combination of focus areas. With this, I do not mean that you should take business functions or modules one by one (that is a different discussion altogether) but the intent of the strategy is to pick your result areas after implementing the ERP and keep on improving the processes, putting controls, automating it further, complementing them with BPM solutions etc. to make them ready to reap benefits and then move to the next batch. The batches can also overlap for some time looking at the available bandwidth of team. The group of CIOs jointly took a decision to re-look at their ERP deployments and identify the areas of focus to give a new try to reap the benefits and you also might want to try out this simple but effective strategy. Best of Luck!

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Finally an Inventory Solution for Wholesalers, Dealers and Large Retailers

noreply@blogger.com (Puneesh Lamba) — Sun, 22 Aug 2010 19:46:00 PDT

For ages, the resellers like wholesalers, dealers and retailers had to forecast, plan and store their own inventory where all of the risk is theirs only and the rise and fall of demand kept on impacting their on time delivery, their return on investment, stock-outs and so on. Never ever they had a collaborative solution which can provide them access to a preferred group of resellers inventory and they can collaborate to re-distribute, re-allocate and replenish inventory based on the groups requirement. Few days back, I witnessed an inventory management solution which could help the resellers do all this and not only this but the solution offered lot of other benefits. I prefer to call this solution as Shared Inventory Pool Solution (SIPS). This solution ensures that you can afford to keep lesser inventory and at the same time the participants of the group can plan together which slow moving items should be kept jointly or can allocate these items storage to different participants so that at least others can release their capital to that part and use it elsewhere. The benefits of SIPS are:It allows aftermarket manufacturers, dealers, wholesalers, retailers etc. to indicate which parts of the inventory can be shared with the participant group members and which part of the inventory can be visible to them. This helps you control your inventory privacy as well as let others know if you have something that they need and you have extra numbers, then those can be borrowed and sold Provides real time access to shared inventory pool whenever a customer orders which helps in giving accurate available to promise (ATP) date to them Provides ability to split an order across multiple participants in case the participant is not ready to part with its critical inventory and in this case, the customer will still get a unified quote and no participant will lose sales for want of stock KPIs like obsolescence, scrap, shelf life, on-time delivery, perfect orders fulfillment get improved Best in class inventory codification, catalog management and categorization Provides ability to integrate with multiple ERP systems and extract allowed visible items data to be shown in a single screen to all the participants Since SIPS can also be a cloud based solution, it is an innovative and practical application in supply chain space. I am not sure if this solution is available for businesses other than resellers for now in the market but it is just the matter of time if it is accepted in the reseller market and is able to show its value.

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Evaluate your sole-source versus multi-source strategy in ERP ADM

noreply@blogger.com (Puneesh Lamba) — Sun, 15 Aug 2010 19:40:00 PDT

We are seeing a turbulent time in ERP ADM services wherein organizations are not clear whether they should stick to their best and trusted vendor for providing the services or look for economical and probably better service models outside. Other than this, they are also wondering if their long term strategy should change from depending on one single vendor to keep on getting the volume discounts and single window service or should look out for multiple vendor services for getting exposure to different best practices, pricing models etc. from them. The objective remains same in both the cases, which is lower costs, better service and exposure to best in class practices. According to Bill Martorelli of Forrester, many firms are currently recasting their single-sourced, all-encompassing IT outsourcing agreements towards a multisourced scenario — in some cases carving out application services. But many application development and maintenance (ADM) service engagements grow organically, individual scope of work by individual scope of work. In cases involving multiple ADM suppliers, principal challenges include building a framework that governs the involvement of the different suppliers, as well as guidelines for awarding subsequent work to those that do the best job. The task is complicated by the often fluid nature of preferred applications services partner relationships, where the roles of respective partners can grow or shrink more than is typical in infrastructure-oriented engagements. Sourcing and vendor management professionals should compensate for these concerns with a greater emphasis on governance and transition assistance. Certainly, multi-sourcing brings competition among your partner vendors and in quest of getting more business or to outsmart each other, there are high chances of your getting their best of sevices and focus on your requirements but having said this, we need to be congnizant of the fact that Big is Beautiful and in case you do not have a large carrot hanging for the vendors for near future, the strategy may backfire and once again, the solesource strategy will become a better choice. We need to put our heads together to chalk out a short term and a long term strategy in going ahead with the sole source or multi source plan looking at the specific situation of our organization before we take any decisions.

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Strategy: Revisit your forecast frequency and methodology for better planning

noreply@blogger.com (Puneesh Lamba) — Sun, 08 Aug 2010 20:35:00 PDT

In today’s world, the industry dynamics demand that corporate management execute new strategies rapidly. Organizations have started to realize the limitations of annual static plans and shortcomings of limited horizons. Long back, organizations were forecasting only once a year and now this trend is not to be seen anywhere at least in their wish list. The trend has moved to complete forecasting activity at least once a quarter but still if we ask them about their satisfaction on this frequency, we will hear that they would like to forecast every month for better planning and budgeting. Lot of factors like volatile demand, new markets opening up and old markets saturating, supply inconsistency etc. contribute to the need of forecasting multiple times in a quarter. A rolling forecast, which is a best practice, that is revised on a monthly or quarterly basis can ensure that financial planning is continuous and dynamic. Introducing new methodologies , process and tools to forecast is the next step that most CFOs and CIOs have introduced some time back. To add to this, techniques like scenario analysis modeling help them provide better insights into future financial indicators and the risks and rewards of strategic actions. The other methodologies that have come to the fore these days are lot more different from the methodology that focused more on the history of demand. Some of these include:Zero based budgeting where the team starts forecasting with a clean slate with no history at all Performance based budgeting which is also called as result oriented planning and budgeting Driver based budgets which defines the drivers first and then the planning and forecasting is based on performance of these drivers Interesting fact here is that while using any of the above techniques, the organizations still are not able to get rid of the historical data syndrome and have started blending the alternative forecasting methods with this obsession of theirs and coming out with a new way. Now, let us look at the role of technology here. Certainly, technology will help the organizations to increase their ability to forecast as and when market conditions change, it will help the forecasting team to conduct simulation or “what if” scenarios and it will add to the existing capabilities to incorporate business drivers into the ongoing forecasting processes. In addition of the above, it is also recommended to adopt technology solutions for multi dimensional reporting, ability to drill down at multiple levels and ability to align sales forecasts with actual business revenue targets and costing forecasts. Interestingly, today’s ERP software products are modeled around these needs and can help the organizations immensely in their endeavors to revisit their forecasting, frequency, methodology and techniques. Infact, ERP software providers often package financial planning, budgeting and forecasting applications as a subset of a more all-inclusive category of Enterprise performance management solutions which are extremely useful. While evaluating the ERP software products in this area, we must look at some critical features and then take an informed decision.

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What is your criteria for spend analysis solution selection?

noreply@blogger.com (Puneesh Lamba) — Sun, 01 Aug 2010 09:40:00 PDT

Spend Analysis solutions are a critical component of the overall success of a spend analysis program and are being used by roles as wide as chief procurement office (or Head of purchasing) to category managers to buyers to chief financial officers. The whole solution often revolves about first increasing the spend visibility and then looking and analyzing the data. The modern spend analysis program consists of various process all of which contribute to an overall increase in spend visibility. These processes mainly include extraction of spend data from multiple internal systems be it the ERP or financial system, cleansing, transformation and classification of spend data followed by analysis or reporting of above data. The last phase of the program which is analysis or reporting of the spend data brings the most value in companies eyes. This capability helps the procurement executives slice and dice the corporate spend data in different ways like item category, supplier, date, geography, business unit etc. to effectively gain intelligence over purchased items. This information, then can be translated into true intelligence which can arm the strategic sourcing team while negotiating newer contracts with key suppliers. All above can not be achieved without the help of a technology solution that facilitates your spend analysis program and since we want this investment to provide us maximum ROI. Clarity about the criteria of its selection is something which is high on radar of a procurement executive. The main prevalent criteria recommended by procurement technology solution experts around the globe are:Ease of integration between spend analysis solution with the sourcing program/solution Reporting and analytical capability of the technology solution Ease of integration between spend analysis solution with procurement execution function Level of automation and completeness of the solution in terms of features availability Ability to track or measure compliance of processes/data Other than the integration criteria, the other main criteria as evident from above, is the process automation within the solution and including end to end process flow including areas like expense management, account payable or for that matter invoice processing reducing the usage of paper in office bringing in greenery as well as reducing costs. In addition of the above criteria, another important one which is gaining ground these days is the ability to capture the collaborative action trail between a customer and supplier so that deflation can be driven using that data. So, looking at the above points, what do you think is your criteria for selection of spend analysis technology solution. Is it different from the above or is part of them? Share your views for everyone benefit.

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Strategies for a successful supplier partnership

noreply@blogger.com (Puneesh Lamba) — Wed, 28 Jul 2010 22:28:54 PDT

What exactly defines a successful supply chain partnership? Is it just your picking of suppliers that can supply material to you at a low cost, minimum lead time and long payment terms or it is just the beginning? These are couple of questions that play in our minds when we are trying to fix our supply chain for better efficiency, effectiveness and cost. We wanted to have a dig at the strategies that should be part of our program to improve our supplier partnership to make them more profitable for both the sides. The strategies that have changed over time and more so as an impact of the recently concluded recession, it has become clearer that squeezing the suppliers might not be the right strategy going forward as you run the risk of breaking your supply chain in case their financial viability is in danger. The strategies in our view should be:First and foremost strategy is collaboration. As I keep on mentioning during conferences and my articles, today the supply chains compete instead or organizations and the efficiency of a supply chain can only be increased if all the stakeholders are collaborating, sharing knowledge and information and taking joint actions. This also improves the visibility within the supply chain and hence the issues can be fixed pro-actively Try to resolve the problems not only at your end but at your partner’s (supplier or customer) end also. Please always remember that it is the partnership that will succeed and not just one of the partners You can't rest on your laurels. Customers demand to see a plan for product development (especially in technology) so they know their future needs will be met. Similarly smaller suppliers look upto their customer organizations to help them plan their MRP with less volatility. These measures can reduce the costs at both ends and after-all both the partners will benefit and the probability of it becoming a far more successful customer supplier partnership will increase manifold Customers have lot of expectations from their suppliers. Customers outsource to those who have the expertise, so they depend on vendors to implement, train, maintain and support the technologies and service provided. Support is almost as important as the technology or service itself. So it is important for the supplier to invest equally in support of services Commitment is the key to a longstanding and fruitful relationship. Customers carefully monitor the leadership of their supply chain partners, their seriousness to groom the partnership and if the objectives of their organization finds any mention in the joint vision statement of their strategic vendors The main driver for purchasing any new product, raw material, technology or service is cost savings, but the most the important financial measure is value in terms of increasing sales, production or other revenue-related metric. This should remain at the forefront of all the strategies and tactics The crux of the matter is that the prime strategy for improving the success of a customer supplier partnership is to work together and win together instead of winning at the other’s expense.

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ERP Trend: Changing role of ERP in the eyes of a CIO

noreply@blogger.com (Puneesh Lamba) — Sun, 25 Jul 2010 21:56:00 PDT

Few months back, we left the worst behind and the economy started showing signs of a recovery though not a smart one but slowly and steadily it has started moving in the right direction. Most of the CIOs survived 2009 by cutting costs with the help of ERP and of overall IT operations but 2010 has come up with a new kind of challenge that is to grow and expand, keeping the capacities as more or less same. This challenge has come up for the organizations as they are still cautious in their approach in expanding operations by investing more due to the slow pace of economy recovery and doubts in the minds of experts that it will sustain or not. They do not want to lose the opportunity to encash the recovery but also are practicing restraint in investing. This has changed the approach CIOs also and they have started initiatives of increasing productivity from the same infrastructure in addition of continuous efforts to reduce the costs (or increase the cost efficiency). So the economic conditions required CIOs to shift their focus from cost-efficiency to raising resource productivity and the ERP solutions, this year, will be more focused on increasing the productivity of staff, operations, and infrastructure and this will be pertinent for existing ERP deployments as well as ongoing or yet to start projects. The model that is gaining ground and will gain more ground in coming months is like described below:

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Evolving Role of a chief Supply Chain Officer

noreply@blogger.com (Puneesh Lamba) — Tue, 20 Jul 2010 18:14:00 PDT

The main objective for a chief supply chain officer has long been to bring cost savings in supply chain, logistics, warehouse and manufacturing with the key objectives being reduction of lead times, leaner processes, higher staff efficiency and lately collaboration with suppliers. The combination of the recent downturn as well as marketplace competitive strategies has started changing rather adding upto the key objectives of a chief supply chain officer, like acting as a facilitator for added ability to differentiate in customer service, marketing strategy etc. A CSCO is also seen to be managing risks around supply chain like risks related to trade compliance, raw materials, demand fluctuations, product quality, financial instability, risk profile of suppliers and customers, currency volatility, catastrophic events, logistics capacity and congestion, supply chain security, and environmental disasters etc. With this, the CSCO has become a key stakeholder in the organization and is responsible for growth and expansion too in addition of improving efficiencies and coming out with innovative cost reduction measures beyond low cost sourcing and other similar strategies. These changes though, are not there in all organizations and in these organizations where the role of CSCO is still evolving and is largely seen as a cost center rather than a profit center or an engine for growth in revenues, the key objectives of a chief supply chain officer remain as:Inventory reduction / optimization Improvement in efficiencies by restructuring and automating supply chain Improved service levels Deflation in procurement costs Releasing working capital Reduce cash to cash cycle Improved financial arrangements with customers and suppliers (largely payment terms) Reduced lead times of procurement and manufacturing Improved visibility of supply chain metrics, data, disruptions etc. With enhancement in the role of the CSCO, the best in class organizations are leveraging their enhanced visibility into supply chain processes to make their supply chains more agile: if the market demands, they are able to change the direction of their shipment not just during the scheduling process, but at later points in the supply chain – after the cargo has been shipped (visibility). Best-in-Class organizations are also are much more likely to perform various kinds of data analysis in support of supply chain decisions which ensures that the visibility data they collect are used to help them achieve the market advantage (responsiveness). Many organizations do not even have the role of CSCO today but these organizations have started clearly seeing the benefits of centralizing supply chain operations, and to make SCM truly strategic, a strong leader as a CSCO will be a critical differentiator. No longer can organizations run different supply chains for different products within the same business units. Consolidation and rationalization of business processes within supply chain organizations is a reality that has to be embraced. So, they have realized that having a CSCO role orchestrate the supply chain across these different business units is a key requirement. In nutshell, the role of CSCO is evolving wherever it exists today and it is being introduced where it is not there currently. Infact, it has become one of the key differentiators for a company to increase not just the bottom-line but also to establish them as the market leaders in managing complex supply chains too.

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Identify Risks for your ERP software deployment program & plan mitigations in time

noreply@blogger.com (Puneesh Lamba) — Sun, 18 Jul 2010 23:25:00 PDT

ERP Software deployment program is not only an IT program but it is part of a larger business strategy and needs an equal (if not more) participation from business – a fact well established till now. Even if we follow the best of methodologies and frameworks as claimed by most ERP software vendors and service providers, it is highly recommended to do an independent exercise to identify the risks and plan their mitigation. There are some risks that only a customer organization can identify and no service provider will be able to find them as they all go with the standard list of risks that come in an ERP software deployment program. It is important to come out with your own list of risks and mitigants and the framework for this need not be a state of art intelligent framework but a simple list of risks and mitigants with good meaningful content. Some factors that will help you indentify the risks are:ERP exposure: In case the exposure to ERP software does not exist or is limited in your organization, risks related to change management, business participation, ownership, reluctant testing, delay in timeline & low priority to program can come and there will be a need to plan mitigants like effective change management program, awareness creation strategy, building excitement about the new system and its benefits will help you Number of existing systems: In case you have multiple systems that are going to be replaced by ERP or some of them will still exist after ERP software deployment, then complexity risks, project delay potential as well as dependency on multiple teams and their schedules might pose as a challenge for the program Multiple businesses: More is the number of businesses; more will be different requirements, their priorities and business stakeholders. If this is added with the increased number of geographies and languages, then it is highly likely that activities like design finalization and testing will get impacted in terms of more time required by businesses to digest a standard business process and it might be required to plan mitigations to these risks beforehand Level of existing documentation: It will depend on the level of documentation for existing systems that how much time you will spend in incremental documentation. Not only this, whether the business team will have the time to work on the documentation or not is a risk that normally skips the minds of the ERP service providers. Plan these pro-actively Other factors: Factors like level of cleanliness of data, data quality in whole (consistency, accuracy and completeness), expected customizations, lack of executive support, team size-quality-availability, test scenarios identification etc. demand your time to think and check whether they can pose risks to the ERP software deployment program or not The list is nor an exhaustive list but are those which normally a customer organization themselves can identify in a much better way than an ERP software vendor or an ERP service provider. Do spend time on them for a more successful program.

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SCM Strategy: Do not lose sales due to inventory issues

noreply@blogger.com (Puneesh Lamba) — Tue, 13 Jul 2010 23:21:00 PDT

I have written earlier about inventory optimization and its key drivers and thanks to my readers, the article made it to the best inventory optimization articles and was appreciated by Chief Supply Chain Officers across the globe. It also triggered a debate on how should we first identify the exact causes of lost sales due to inventory related issues and deploy pertinent solutions. Normally, lost sales due to inventory drives the business teams to push for increase in inventory levels and if the supply chain team resists, the sales team will start adding buffers to the safety stocks of at least the best selling items and hence the inventory levels will rise automatically over time. These measures however, are less scientific and panic driven which increase the working capital and inventory carrying costs. It also reduces the inventory turns and leads the best in class organization towards the laggards position, though the service levels might increase. This whole situation compelled me to take the article to the next level and come out with the possible reasons, causes, solutions and enablers on the subject of losing sales due to inventory issues. I could create a small framework that talks mainly just about the key reasons etc. and do not cover everything related to it. Infact, this framework (which is given below) is industry agnostic and can be the starting point of inventory optimization for most organizations. It also incorporates the best practices that major supply chain leader companies (like Apple's iPAD SCM policy) deploy and is worth a look and evaluation. In case the above picture is not visible or you need further details on how to use the framework to identify the reasons, causes, solutions and enablers for your own organizations, please contact me through the contact form. I share the knowledge completely free of cost.

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Critical Success Factors for ERP Deployment

noreply@blogger.com (Puneesh Lamba) — Sun, 11 Jul 2010 22:55:00 PDT

InfoVerto has long experience of executing ERP projects worldwide and from its experience, it has compiled a small list of critical success factors for ERP Solution deployment in an organization. This list of factors is not an exhuastive list of all success factors but represent a crux of few critical ones that has the potential of being a driving factor for success or failure of an ERP program. Have a look:Pre-Work Quality: There is a need to create a project charter, organization and have well defined objectives before starting the project so that every stakeholder and participant is on same wavelength and know their responsibilities as well as deliverables. Pre-Work will also include readiness check in terms of processes, skill set availability, bandwidth availability, budget, executive leadership keenness etc. Executive Sponsorship: A clear-cut and consistent mandate and support from the top executives of the organization is THE most important success factor for you as it will ensure that the projects is getting the right visibility as well as importance and is tracked for its progress at the highest level in all the divisions Participation of business teams: ERP project is never an IT alone project and It teams can never pull together ERP projects without the participation of business for the simple fact that it is the business that will use the system after it goes love so not only they need to own the design of new system, they also need to project it rightly in their teams so that a positive buzz is created for the new system in the organization Market the project rightly: A strong feeling in employees is always there that after ERP is implemented, they will see manpower reduction and this increase their resistance to change or they want to prove that the new system will not prove beneficial for the organization or the organization is still not ready for the new system. It is important to market the project addressing the issues of employee and regular communication needs to go to them highlighting progress of the project as well as what benefits it can bring to their daily work routines Map the business processes to system and not vice versa: ERP system is coming to help your business grow and increase efficiency and not the other way round, so please make sure that defining business processes is given utmost importance and compromises in the processes are at the lowest level, to accommodate ERP functionality. It can increase the level of customization in your instance but there is a need to review each and every process deviation due to product-requirement mismatch before taking a decision to tweak the process Change Management: This is one of the biggest non technology challenges in an ERP implementation and need to be planned pro-actively. Inadequate change management can derail even the best managed project and it demands a clear cut strategy to manage change in the organization Address Product Gaps: There will always be some product gaps that will stop you to map the whole requirement set to the product and a customized solution will need to be put in place. (If you have selected the right ERP software then the probability of having gaps will be much lower). It is important that these requirements and their solutions are well discussed in the team and should be taken up with the ERP Vendor before starting to customize the application as it will add complexity which will result in more robust testing, bug fixing and documentation resulting into reduced bandwidth of team ERP deployment partner: Having a consultative, knowledgable and experienced ERP Service Provider always helps to increase your chances to have a best in class solution as well as reducing the failure potential of your project. It is imperative that sufficient research is done in this field before selecting an ERP service provider and you leverage the tools & frameworks available on web to complete your study before taking a final decision It is important that you take care of all above points while planning for the ERP project for your organization and increase the succcess potential of the project.

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