On Tuesday of this week, this author had the opportunity to anchor a webinar titled: Your S&OP Analytics: Crystal Ball or Ball and Chain?
In my presentation I addressed the forces that that are converging for S&OP teams to consider more leveraged use of predictive capabilities. I trust our readers had the opportunity to tune-in to this event sponsored by Steelwedge Software. Over 250 registered for this webinar and we were able to conduct some live polling exercises. We also received some great questions from the audience.
If you did not have the opportunity to tune-in, a recoding has been made available for playback. I also authored a guest blog posting on the Steelwedge blog where I summarized the key takeaways from this webinar, along with a response to attendee questions. we were not able to fully address at the conclusion of the webinar.
You can view tall of these by clicking on this web link.
On July 30th, Supply Chain Matters attended the Infosys 2013 Global Analyst Summit meeting held in Boston. This is an annual event held each year with invited industry analysts representing multiple coverage areas. It was a great briefing event, held at a scenic facility overlooking Boston Harbor and filled with insightful information.
Bottom-line, we were surprisingly impressed at the consulting efforts that Infosys’s manufacturing and supply chain teams have made in the past twelve months.
Infosys itself has undergone some turbulent changes in terms of lagging growth, culminating with bringing back its founder N.R. Narayana Murthy as executive chairmen. During the opening session, Co-founder, Board Member, Managing Director and CEO S. D. Shibulal reviewed the accomplishments of the Infosys 3.0 re-alignment that has been executed over the past 18 months. He acknowledged that last year provided some challenges for the firm with growth below industry average. Since that time the firm has re-aligned both its industry and geographic organizational focus and has assembled 14 offerings around products and platforms. Last year, a significant percent of the firm’s new deals around business outcomes came as a result of the new platforms strategy with the Process and Platforms business unit reaching $725 million in Total Customer Value last quarter alone. The re-alignment and re-focus has begun to demonstrate other improved performance. Shibulal re-iterated that Infosys maintains a 98 percent customer retention rate among nearly 600 core clients. The CEO also highlighted some key client accomplishments across multiple industries and it was rather clear that he was personally involved in overseeing some of these engagements. Also made clear was the firm’s renewed focus on assisting clients in major business process transformation that extends beyond just information technology, with broader measures of engagement performance. Infosys is in the process of transforming to both a services and platform consultancy.
The remaining morning briefing sessions featured a combination of Infosys senior executives and select customers discussing areas termed Insights-Driven and Agile Enterprise, along with Cloud and IT Outsourcing implementation efforts. What we found most interesting was how these clients described their business objectives, which included:
Building a smarter organization
Digitizing the enterprise for growth
Fail fast and win faster- iterated by more than one client presentation
Harnessing the power of real-time decisions
Managing disparate global operations effectively
Enabling guest experiences
Re-architecting the entire data environment
These are terms that connote broad cross-functional and enterprise initiatives. The other common theme we picked-up on was a sense of urgency for industry change in either maintaining or up-ending industry leadership in business capabilities, or seizing business opportunities in new markets.
Our afternoon time centered on a series of dedicated briefings from various Infosys executives within the Manufacturing Industry practice business unit, chaired by Sanjay Jalona, Infosys Senior Vice President for Hi-Tech and Manufacturing, along with his associated manufacturing industry leaders. This business unit stated that it works with more than 100 global 2000 clients and that 40 percent of engagements are led from a business process consulting framework. While we are restricted from the mention of client names, we can relate that the names are impressive. Once more, the described engagements are far reaching, many with multiple-year timetables for innovation.
More importantly, Infosys has shifted to a shared-risk outcomes-based client engagement model where end results are predicated on specific client specified business outcomes. Infosys has now discovered that its core capabilities lie in combined services that span engineering, business process outsourcing and IT transformation. The firm’s broad global presence across multiple countries is further leveraged to assist manufacturers and retailers in implementing capabilities on a global scale, including needs in higher-growth emerging markets.
Five areas of investment capability and client transformation focus were described that include: Information, Digital, Infrastructure, Business and Supply Chain. Beyond IT and business consulting, the manufacturing practices have also focused on the delivery of specific services including product engineering and industry specific customer services. The firm is also developing impressive capabilities in the area of leveraging predictive analytics applied to supply chain and online fulfillment needs.
Our briefing emphasized the increasing importance that manufacturers currently place on transforming to more services focused business areas particularly in discrete manufacturing and aerospace settings. In some specific engagements, Infosys has assumed the ongoing management of a client’s legacy products that frees-up client resources to work on more innovative product offerings. Client names were again impressive, many of which Supply Chain Matters has featured in specific supply chain, B2B, and online fulfillment capabilities.
As outlined above, we were obviously impressed, and we were not the only analyst firm with that impression. The firm has clearly shifted toward delivering strategic capabilities for its clients, a theme that was candidly not the top-of-mind impression for India based firms.
One of the current shortfalls of Infosys is its ability to effectively market its broader array of capabilities for global based manufacturers and retailers and that conclusion was openly echoed by other attending analysts as well. We were informed that this will be addressed.
The takeaway for our readers is that we were impressed by the renewed focus of Infosys, particularly its Manufacturing practice area.
Disclosure: Infosys is a former sponsor and client of the Supply Chain Matters blog
In our most recent Supply Chain Matters Quarterly Newsletter, we called attention to published reports that the hottest interest in business schools of late is not banking or finance, but rather a career in supply chain management. Both Bloomberg Businessweek and the Wall Street Journal (paid subscription or free metered view) published articles in June reflecting on this hot new interest. They note that the complexities of managing globally extended supply chains is now fueling demand for people with concentrated supply chain academic backgrounds. But alas, there is a classic demand and supply problem and additional academic institutions are moving to satisfy current and future demand for such trained professionals. More than a half-dozen universities have recently introduced undergraduate majors, MBA concentrations, or entire degree programs dedicated to areas of supply chain management.
Bloomberg cites a study from the Georgia Center for Innovation and Logistics indicating that nearly 200,000 U.S. supply chain jobs will go unfilled each year through 2018 because of the lack for qualified talent. Because supply-chain graduates are in such high demand, they are garnering high starting salaries upon graduation. The WSJ noted that, at the MBA level, starting salaries average above $97,000, nearly $5000 above all other MBA’s.
Both articles made mention of up and coming Smithfield Rhode Island based Bryant University, which five years ago began offering a minor in supply chain management curriculum. Last fall, Bryant launched both an undergraduate and an MBA concentration major in supply chain management under the direction of program director Dr. Teresa McCarthy, University of Tennessee alum. Thus far, 180 students are attending both of these programs. Needless to state, such business media citation has raised the visibility of Bryant.
For the past six years Bryant University has conducted a one-day Supply Chain Management Summit. This year’s 6th Annual Summit will be held on August 22, 2013 on the campus of the university. With all of the recent visibility to Bryant, the Summit organizers have been able to recruit 21 speakers for this year’s event. Among some select speakers are senior executives representing Banneker Industries, Barrett Distribution, C.R. Bard, CVS, Dunkin Brands, GSM Metals, NFI Industries and Sikorsky Aircraft
Yours truly is an invited speaker as well. My session is titled: Supply Chain Predictive Analytics- The Increasing Importance of Using Analytics in Supply Chain Planning and Response Management. My presentation will address the current converging forces in the areas of business, supply chain process evolution, and information and database technology that will lead to increased adoption of more predictive planning and decision-making capabilities across the extended supply chain.
We welcome and invite Supply Chain Matters readers residing in the New England area, or who happen to be in the area, to consider attending this Summit. Additional information and registration can be obtained by accessing the SCMS web site.
I’m looking forward to once again meeting members of supply chain management community at this regional summit. Hope to see you there.
In what Supply Chain Matters would context as a sudden and stunning announcement, E2open Inc. announced late last night that it has acquired supply chain planning, collaboration and response management software provider icon-scm in a transaction valued at approximately $34 million in total consideration. (Disclosure: E2open is one of other named sponsors of this blog)
According to this morning’s briefing call with analysts, the transaction itself involves $18 million in cash, $9 million in stock and the assumption of $7 million in existing debt. The transaction is expected to close over the next 90 days. It was disclosed that icon’s calendar 2012 revenue run rate was $10 million in revenues, thus E2Open has apparently secured the company for 3 times earnings, a rather attractive sum by today’s standards. However, the $10 million revenue run rate contrasted with $7 million outstanding debt points to other problems that forced icon to act.
Founded in 1992, icon-scm was a privately held company and is current headquartered in Karlsruhe Germany. Our SAP readers should be familiar with icon-scm because back in 2010-2011, SAP had elevated the icon capabilities into the preferred partner status and announced its intention to incorporate the company’s response management capabilities into its supply chain management support capabilities. Subsequently, SAP announced the product, SAP Supply Chain Response Management by ICON-SCM with a listing on the SAP price list for the sales team to sell. SAP offered the capability as an augmentation for SAP supply chain management customers, especially those residing in high technology, consumer electronics industries. Among current icon-scm customers are Avnet, Foxconn, Hewlett Packard, Pratt & Whitney, Western Digital among others.
This morning’s briefing from E2open disclosed that the initial conversations began in March and accelerated to last night’s announcement. E2open managed to have icon-scm sign a no-shop agreement during these discussions. There was also a revelation in the analyst Q&A that SAP may have had intent to acquire but became distracted by other events occurring. For icon-scm, turning over the entire sales process to SAP may not have helped generate desired sales growth.
Supply Chain Matters has reached out to SAP to secure a comment regarding how this announcement will affect previous announced icon-scm capabilities for SAP customers.
E2open CEO Mark Woodward indicated his belief in this morning’s briefing that SAP will henceforth discontinue its partnership with icon-scm but will continue to support any existing customers. Woodward further indicated that all current employees and offices of icon-scm would be retained by E2open.
The announcement itself vastly accelerates the product roadmap timetable for E2open, with an indication of as much as 24 months. The roadmap calls for the first phase of data integration to occur in the first 6 months with plans to integrate icon-scm capabilities into the E2open network in 2014. The balance of icon-scm capabilities will be provided as subsequent versions of Rapid Deployment applications in a timetable that extends across 2014-2015. It is E2open’s desire to convert all existing on-premise customer agreements to a hosted, subscription based model, which will be the model of engagement going forward.
Obviously this announcement has significant impact to the existing supply chain planning, collaboration, response management and B2B network vendor base. It is another endorsement of the need for integrating supply chain planning with real-time execution in order to make more timely supply chain end-to-end resource decisions. For manufacturers and retailers contemplating the need to deploy such capabilities, the announcement provides further evidence that the vendor community is hearing your desire to offer such capabilities in a single vendor capability.
Supply Chain Matters will provide additional insights related to this announcement in subsequent commentary when further information comes forth. In the meantime, we believe this is a positive development for the market.
Disclosure: E2open is one of other sponsors of the Supply Chain Matters blog.
It may be the dog days of summer but we remain quite active. We invite Supply Chain Matters readersto join me in an August 13th webinar, sponsored by Steelwedge Software titled: Your S&OP Analytics: Crystal Ball or Ball and Chain?
In this webinar, I will address the evolution of S&OP and how predictive analytics will play an important part for enabling future decision-making needs in this process. S&OP needs to move toward better prediction of events and business outcomes while converging forces in business strategy, supply chain strategy and information technology are aligning toward helping businesses to leverage predictive analytics tools within S&OP.
Do your S&OP team, process and technologies give you a holistic, predictive look at your business potential, like a Crystal Ball to get in front of demand shifts, new product prospects and supply cost factors? Or are you stuck in an articulated, but sequential monthly S&OP process that weighs down decision-making within the confines of the schedule and a rigid software system, like a ball and chain?
I’ll have some interesting insights to share with you.
Supply Chain Matters recently had the opportunity to attend the MIT Crossroads 2013 conference sponsored by the MIT Center for Transportation and Logistics (CTL). In our Part One commentary, we highlighted both a UPS presentation and a multi-industry panel discussion of supply chain management futures.
For Supply Chain Matters, Tom Linton, Chief Supply Chain Officer for global based contract manufacturer Flextronics provided the one of the highlights of the conference in his vision of supply chain evolution. Mr. Linton provided a deep level of experience and insights in many aspects of supply chain management along with perspectives of having been based in Asia for nearly 22 years. At Flextronics, his responsibilities span all of procurement (direct and indirect materials), materials management operations, logistics and fulfillment, including managed supply chain for customers. Mr. Linton, in a Dave Letterman Late Show Top Ten delivery style, provided his Top Ten listing of the trends driving the future of supply chains.
We will not steal all the thunder of Linton’s delivery but will highlight what we believe were highlights of his insightful observations. Number 10 on his listing was the adoption of cloud computing, along with his message that this is indeed an emerging low cost and reliable trend in technology adoption, that “apps” for supply chain is an up and coming trend that most firms will utilizing within the next five years. Number 8 was the prediction that global labor costs would equalize, the implication being that labor arbitrage is a declining trend. According to Linton, we are reaching a point where direct labor costs across major geographic manufacturing regions is reaching parity and that leaders of tomorrow will leverage and manage a regional geographic footprint predicated on customer and product fulfillment needs. Strongly related to this prediction was number 5, the new emergence of regional and local sourcing. Mr. Linton observed that as many manufacturers shifted manufacturing sourcing to China, the component supply chains of many industries also shifted toward a China concentration. With the emergence of a renewed manufacturing presence in the U.S. , the challenge is to re-building a competitive supply ecosystem becomes more important. Readers may recall that Supply Chain Matters has observed these same implications and has called for similar investment in supply eco-systems.
Number #6 reinforced the need for supply chain skills specialization and new areas of skill needs in cloud computing, supply chain design, supply chain cost analysis and other areas. The number 4 prediction was the emergence of control towers, described as virtual integration of the supply chain supported by advanced cloud technology. For further descriptions of what is implied in control tower capabilities, readers can review any of previous Supply Chain Matters commentaries tagged with the “supply chain control tower” category. Number #3 prediction concluded that predictability becomes the competitive advantage. For Linton, predictability is defined in three fundamental questions:
- How safe is my supply chain?
- How fast is the supply chain/
- How cost efficient is the supply chain?
Finally, Linton’s number one prediction was that non-zero supply chains win, that transparent supply chain ecosystems focus on win-win balance for success vs. win-lose.
We want to also highlight the presentation delivered by Jim Cafone, vice-president of supply network services at Pfizer, who spoke on the challenge of managing highly flexible supply networks in healthcare markets, and how a cloud-based system backbone deployed by Pfizer has helped to overcome challenges of information latency and integration. Like other pharmaceutical and life sciences manufacturers such as Johnson & Johnson, Pfizer has centralized its global supply organization to help drive acceleration in required transformation. One of the unique challenges for Pfizer and pharma supply chains is that because of regulatory requirements, recipes are country specific. As an example, four variants of the highly popular cholesterol control drug Lipitor translate to 800+ global sku’s. Lipitor has recently come off global patent which moves the strategic focus toward a more cost-efficient and effective supply chain. Centralized control helps Pfizer to move toward more agile, cost-focused supply chains, built on enterprise supply platforms. Pfizer has also identified both transactional and analytical supply chain control towers as a long-term capability.
The Pfizer supply chain team has moved toward the cloud to provide what is described as a “device agnostic’ layer of information retrieval, one that spans current existing backbone ERP systems. Pfizer now requires all of its highly specialized logistics providers to automatically send tracking information into the Pfizer cloud that is supplied by GT Nexus. The described advantage was the ability to “plug and play” logistics providers into the network, drive differentiated operating parameters and a new “network” information model. A previous Supply Chain Matters commentary on building foundational supply chain control tower capabilities, stressed the critical importance of a singular information utility that spans the cross-organizational business processes and physical boundaries of the extended supply chain. The Pfizer presentation was a great example of that principle in action and garnering positive business outcomes.
For us, the MIT Crossroads 2013 presentations were the manifestation of industry supply chain executives reinforcement that our community has reached important crossroads into even newer and expanded dimensions of needs for agility, responsiveness and risk mitigation. We once again extend appreciation to the MIT CTL team for inviting Supply Chain Matters to this great annual event.