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The Most Important Considerations in Your Organization’s Supply Chain Technology Investment Plans

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Tomorrow, this author will be joining a distinguished compliment of speakers at the 7th Annual Supply Chain Management Summit sponsored by Bryant University and Benneker Industries. This event is turning out to be one of few premiere New England regional conferences focused on current issues and learning in supply chain management. Last year’s event drew upwards of 250 attendees among many industry settings.

Since many of our readers are located across the globe, the purpose of this Supply Chain Matters commentary is to summarize the key messages and takeaways of my talk.

My presentation is titled: New Developments in Supply Chain Technology- What to Consider in Your Supply Chain Investment Plans. The key takeaway messages I’ll be delivering is that three converging mega-forces:

  • Constantly shifting customer and business needs requiring sense and response, as well as  more predictive business processes and decision-making capabilities.
  • Supply chain process and IT technology convergence providing more cost affordable opportunities for integrating both physical as well as digital information and decision-making capabilities.
  • Digitally enabled manufacturing enabled by the Internet of Things.

are aligning toward extraordinary opportunities for what has long been the Holy Grail of our community, namely, integrating information and decision making across physical and digital supply chain spectrums. The alignments of the above mega-forces are providing significant opportunities in management alignment and top management sponsorship which can be leveraged. New and emerging technologies, especially engineered systems, cloud computing, predictive and prescriptive analytics are becoming the technology catalysts. Besides touching upon the latest advances and significantly changed IT market dynamics surrounding supply chain technology, my primary goal in this talk will be to advise supply chain teams on the most important investments to focus upon in the coming months and years.

First and foremost, and without question, the most important initiative for any supply chain organization today is a concerted set of initiatives directed at Talent Management. The business benefits of advanced technology are marginal without people who have the necessary and required skills to be able to leverage and harness these technologies. Recruitment, retention and increased skill needs are constantly identified as the single biggest challenge across C-level, business, IT supply chain and manufacturing teams, and the challenge will continue as newer technologies make their presence among industry supply chains.

More than ever in the past, supply chain, procurement, customer fulfillment, product lifecycle management and service management teams must have active technology awareness and planning strategies.  The umbrella and accountability of the supply chain now involves far broader dimensions of common information and related decision-making needs. The notion of the goal for pursuing Integrated Business Planning is not just IT vendor hype, but a necessary and required capability. An organization’s Sales and Operations Planning capability is thus the most critical to focus and improve upon. That stated, an important reminder for cross-functional and cross-business remains that final objective is not technology alone, but rather required business objectives and outcomes.

I’m also urging technology selection teams to broaden their context of their technology planning to include leveraging information and decision-making capabilities across an end-to-end, value-chain and B2B business network. With today’s pace of business change, supply chain planning or forecasting can no longer stand-alone as a capability, and must be augmented and synchronized with the sensing of actual events occurring across the supply chain network.  The good news here is that the supply chain technology market has shifted its emphasis toward broader support capabilities in this area.

For those who plan on attending tomorrow’s Summit, I look forward to meeting and chatting with all of you regarding your organizational and personal objectives. For those unable to attend, be advised that next week we will post a PDF copy of the presentation in our Supply Chain Matters Research Center for complimentary reader downloading.  Minimal registration information is all that is required.

As always, give as a call or contact us via email if you require further assistance or if this type of presentation can assist your organization or forum in setting its supply chain management objectives for the coming year. Our home page can be accessed at this web link.

Bob Ferrari


Supply Chain Matters News Capsule: August 15; Google, Airbus, Boeing, HP

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It’s the end of the calendar work and this commentary is our running news capsule of developments related to previous Supply Chain Matters posted commentaries or news developments.

In this capsule commentary, we include the following updates:

Google and Barnes and Noble Partner to Take on Amazon

Airbus Completes Test Trials of the A350

Boeing to Make Additional Cost Cuts from Defense Focused Supply Chain

Hewlett Packard Announces Smaller, Less Costly Cloud Platform

U.S. Job Openings at a Thirteen Year High

 

Google and Barnes and Noble Partner to Take on Amazon

Earlier in the week, the New York Times reported (tiered subscription) that Google and Barnes and Noble are joining forces on for fast, cheap delivery of books. According to the report, buyers in Manhattan, West Los Angeles and San Francisco Bay locales will be able to get same-day delivery of books from local Barnes and Noble retail stores via Google Shopping Express, beginning this week. The effort is billed as a competitive response to Amazon’s same-day delivery services.

Google Shopping Express already allows online shoppers to order products from 19 retailers including Costco, Walgreens, Staples and Target and secure same-day delivery. As noted in a previous Supply Chain Matters News Capsule, the Google Shopping Express strategy is to become an ally and complement a retailer’s local brick and mortar presence, relying on inventory from local retail outlets rather than the deployment of a larger network of fulfillment centers.

Airbus Completes Test Trials of the A350

Airbus completed the route-proving certification phase for operational testing of its new A350-900 model commercial; aircraft, approximately two months after completing the maiden flight of this aircraft. During this completed phase, engineers had to demonstrate to safety and regulatory agencies that the aircraft is ready for commercial service. A Vice president in charge of flight testing for Airbus declared; “The airplane is perfectly fit to go into service tomorrow.” The A350 was designed to compete against the current operational  787 Dreamliner and the 777 aircraft. Bookings for the A350 have surpassed more than 700 aircraft.

It has been noted that 7000 engineers worked on the development of the A350, with roughly half of these engineers stemming from key suppliers.  Important learnings have included the need for a singular Product Lifecycle Management (PLM) software system, creating a single electronic rendering of an aircraft that every program engineer can reference or modify when needed.

Administrative reporting to various agencies remains a milestone before this aircraft can be officially certified for commercial use.  Meanwhile, the Airbus supply chain ecosystem continues preparations and scaling to support planned production levels of 10 A350’s per month by 2018.

Boeing to Make Additional Cost Cuts from Defense Focused Supply Chain

Supply Chain Matters has posted numerous commentaries related to Boeing’s commercial aircraft focused supply chain ecosystem, faced with a dual challenge of having upwards of 8-10 years of customer order backlogs while continually being challenged to reduce costs.

Boeing’s defense businesses have a far different problem. Cutbacks in military and government spending programs have led to declining business, and a supply chain oriented to engineer-to-order specialized aircraft and spare parts. Early this week the head of Boeing’s defense, space and security business unit called for an additional $2 billion in cost cutting, two-thirds of which is being targeted among suppliers. Boeing has already cut $4 billion in spending related to its defense businesses. The unit chief called on suppliers to note efficiencies that have been gained in Boeing’s commercial aircraft programs.

 

Hewlett Packard Announces Smaller, Less Costly Cloud Platform

Hewlett Packard announced what it is communicating as a less costly cloud based IT platform under the Helion brand name.

Helion Managed Virtual Private Cloud Lean is being targeted for use by small and medium sized businesses looking to move applications development, software testing and workplace collaboration onto a Infrastructure as a Service platform. According to HP’s announcement, the new service offering can further provide services around SAP’s HANA in-memory systems.

With the new service offering, HP’s goal is to provide the same level of large enterprise services but at a lower-priced alternative. Pricing for this announced service is noted as $168 per month for a small virtual service configuration. A pilot trial service also is available for customers who want to certify an application to run in the cloud with the full support of the HP team.

U.S. Job Openings at a Thirteen Year High

Talent management, retention and skills development has been a constant theme among supply chain management forums and indeed many Supply Chain Matters commentaries. Executives and team leaders constantly lament on how difficult it is to find people with the right level of skills. Current forces of supply and demand in the U.S. labor market are not going to help in overcoming this challenge.

The number of job openings across the U.S. reached a 13-year high in June with U.S. employers announcing 4.7 million job openings. Reports indicate that employers additionally hired 4.8 million workers in June; an indication that the U.S. labor market is showing new momentum. With this increased level of hiring activity, existing workers have showed increasing willingness to seek other opportunities, given the level of new opportunities. A reported 2.53 million U.S. workers quit their jobs in June, up from 2.49 million in May.

 


Samsung’s Announced Acquisition of SmartThings is Another IoT Strategy Play

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One of our Supply Chain Matters 2014 Predictions for Global Supply Chains published in late 2013 (available for complimentary downloading within our Research Center) predicted that interest levels in the “Internet of Things” (IoT) would accelerate this year.  That prediction is proving to be valid one, considering the increased acquisition announcements coming from larger technology providers in a frenzied interest in acquiring key IoT technologies and related applications.

Product lifecycle management technology provider PTC has already made two strategic acquisitions in this area, while Amazon Amazon is taking “on-demand’ to a new dimension with its inaugural 3D printing marketplace. Other large technology vendors such as Google, Qualcomm and Cisco have strategic initiatives underway targeting the operating systems supporting IoT.

Samsung Electronics announced this week that it intends to acquire SmartThings, which the Wall Street Journal described as “a poster child for a movement to bring intelligence to all manner of everyday devices.” SmartThings is noted as a provider of smartphone controlled software that allows homeowners to control functions within their homes.  More importantly, this provider has been working on online services and specifications that assist developers in creating designs for web controlled devices.  Financial terms were not disclosed, and according to reporting by the WSJ, the acquired company will remain independent, allowing it to work with many device partners, rather than just Samsung. 

We will have to see in the future as to how independent SmartThings remains in its efforts.

As we have noted in a previous commentary, controlling consumer devices in a home is different than controlling industrial devices, in that the latter has strong requirements for information and data security. None the less, developments in both consumer and industrial applications benefit the whole of IoT.

Bob Ferrari


What is the Hottest Job in Supply Chain Tech?

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There is probably little surprise to those of us in the supply chain management and B2B network community as to what is the most in-demand job in our technology focused community. This weekend, the Wall Street Journal validated the most in-demand job, that being the data scientist.

In its article, Big Data’s High-Priests of Algorithms (paid subscription or free metered view), the WSJ reports “Retailers, banks, heavy-equipment makers and matchmakers all want specialists to extract and interpret the explosion of data from Internet clicks, machines and smartphones, setting off a scramble to find and train them.” Once more, what companies seek is more than just data analysis and interpretation skills but knowledge of customers, markets and business processes. 

And, in the classic high demand, short supply, scenario, employers need to be ready to attract these skills with competitive compensation. “While a six-figure starting salary might be common for someone coming straight out of a doctoral program, data scientists with just two years’ experience can earn between $200,000 and $300,000 a year, according to recruiters.

Not that long ago, when data scientists aspired to join academia or a Wall Street firm now have much broader opportunities and roles for career selection. Once more, employers will have to do their homework in personal communications and outreach in attracting such people and must be prepared to act quickly with an offer when they locate such talent.

There is a twofold message for both aspiring students who have hopefully chosen supply chain management as their career choice and those already working among supply chain teams.

For the professional already within supply chain management, augmenting one’s skills with formal certificate or degree programs in data science may well be a good investment.  Having several years of broad supply chain management experience and understanding and augmenting with data science skills provides a rather attractive background.

For aspiring students, the message is clearly to balance your studies and awareness of broad supply chain and business management with data analysis and interpretation skills. Probably one of the best investments in intern assignments would be on a big-data analysis or analytics projects. Besides a solid background in data-analysis, you also need good communications skills with the proven ability to collaborate with various functional and business teams on projects and initiatives. The messages for colleges and universities who currently specialize in supply chain management is to broaden the curriculum to include deeper data analysis training and skills development.

Some organizations may be prohibited in taking on highly specialized and expensive data analysis talent on a full-time basis.  That will open up broader business development opportunities among those professional services firms that cater to specialized supply chain management data analysis services and support programs.

The other obvious takeaway message is ongoing retention of such talent.  Challenging assignments, broadened opportunities to learn other aspects of the business and ongoing training support will all be important tenets of a retention strategy.

As this author reviews the current and upcoming wave of advanced information technology, I have no doubt that such technology will enable further breakthroughs in supply chain capabilities. However, organizations that are not actively investing in identifying talent needs and nurturing the skills needed to harness such technology will not be able to take advantage of such capabilities.

Bob Ferrari


Upcoming- Join Us at 7th Annual Supply Chain Management Summit

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Supply Chain Matters readers residing in the New England region are invited to join me at the 7th Annual Supply Chain Management Summit being held on Thursday, August 21 on the campus of Bryant University in Smithfield Rhode Island.

Over the years, this Summit has grown and matured into a northeast regional event focusing on a new burgeoning supply chain challenges and solutions. I was a featured speaker in the 2013 event which was very well attended and I’m pleased to be invited back to speak at this year’s Summit.

I’ll be joining a distinguished compliment of speakers for this year’s event including a dear former colleague, Dr. Larry Lapide who will be delivering the morning keynote, and Dr. Jim Tompkins who will deliver a very timely luncheon keynote.

My presentation is titled: New Developments in Supply Chain Technology- What to Consider in Your Supply Chain Investment Plans. This presentation will address:

- How senior industry executives view needs in business-wide decision-making, and what expectations they have for supply chain capabilities.

- The new requirements of Plan-Sense-Adapt- Synchronize and the new levers of information velocity-context- clarity

- A new thinking required to overcome current organizational and supply chain collaboration barriers

- What you should know as operations, planning, procurement or supply chain management professionals in terms of skills readiness and tool adoption

Individual registration for this upcoming conference is $150 with discounts available for organizational table sponsorships. Registration is available at this web link but act quickly since the event is a sure sellout.

If your organization has needs for a dynamic speaker, panelist or roundtable facilitator on compelling topics impacting supply chain management and B2B business networks, you are welcomed to review our Speaking Services page.

Bob Ferrari


Implementing Innovation and the Importance of Addressing Organizational Culture

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We call Supply Chain Matters reader attention to a very insightful article: Culture Eats Strategy.. and how to deal with it, which was published in the July/August 2014 edition of Supply Chain Management Review. (PLUS subscription required) The authors John D. Hanson, Associate Professor of Supply Chain Management at the University of San Diego, and Steven A. Melnyk, Professor of Operations and Supply Chain Management at Michigan State University, are both noted scholars in our field. This author has personally invited Dr. Melnyk to be a part of previous supply chain influencer panel discussions that I have chaired and audiences have truly enjoyed his supply chain management focused insights.

The article itself is very timely, especially considering the amount of radical change occurring across a number of industry supply chains. There are important reminders that organizational attempts for implementing strategies of radical innovation are often stymied by inherent organizational culture. The authors provide insights as to why “culture eats strategy for breakfast.” Too often, managers or transformation efforts discover that their best outlined plans are nullified by inherent organizational culture, and when strategy and culture provide different paths, they cannot co-exist.   The article reminds us that the management myth of showing teams a better way and they will embrace it is often de-railed by an inherent organizational culture that can and often will resist radical change unless old ways are discredited

The authors point to a number of examples encountered from their research.  Examples of culture and strategy in supply chain relationships where more and more, companies must rely on suppliers for product and process innovation were brought out. The authors remind us that in the past, supplier partners were selected on the basis of cost, capability or capacity considerations without truly recognizing that organizational culture is just as important. The authors’ further note: “In times of strategic change, it is just as necessary to manage the culture change in the supply chain as it is within the firm.

Reading the article and thinking about some of stories previously highlighted on Supply Chain Matters, we could think of a number of current day reminders. For instance, when retailer JC Penny hired the former head of Apple’s retail operations as its new CEO reeled from consecutive revenue shortfalls as consumers failed to respond to the far different boutique store-within-in-store merchandizing strategy being deployed.  A massive change in product merchandising was thwarted by an inherent consumer culture of anticipating coupons and promotions based merchandising. We now know how that story turned out as too much change caused consumers to abandon the retailer.  Similar situations within retail involve the need to drive more timely aspects of online and Omni-commerce capabilities for consumers running into the resistance on inherent organizational cultures that have marketing, merchandising supply chain and customer fulfillment separated by organizational silos with different performance metrics.

The article outlines various actions that teams can take for bringing culture and strategy into re-alignment.  The actions include the importance of displacing existing strategy when a far different one is required along with the importance of peer groups and leadership.  We gained additional insights and benefitted from the article and we believe you will as well.

Bob Ferrari


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