It’s easier to change technology than people! Managing Change…

In the world of analytics, social media and digital revolution, there is one age-old concept that companies still struggle with – CHANGE. Having worked with over a dozen clients, most of which are Fortune 500 companies, I have learned one thing – its much easier to change technology but difficult to change human behavior.

Take for example. A well-known company, like many others, is going through some turbulent times and wants to manage cash flow very carefully while continuing to service their customers well. All executives are aligned on the common goal. However, when it comes to executing the plan, you cannot get anyone to agree. Business units don’t want to “shake up things” too much, IT wants to protect the aging systems and Finance doesn’t want to pay for anything risky. Yet, everyone is aligned on the common goal of “managing cash flow”.

Another example that comes to my mind is from several months ago. A client wanted to expand operations in Asia and had the right business case, brand recognition, market support and skillsets to do so. In this case IT, Finance and Corporate Business were all in agreement and ready to execute. However, the country general manager was not in favor and his rationale was that growth would be too fast to sustain. His real reason, that we found out later, was that this change would have lessened his authority with a regional business model.

It is not uncommon to see this kind of resistance to change in most companies. Everyone wants to adapt to changing market conditions and customers but when it comes to self-change, many transformation initiatives fail or run into significant roadblocks.

This brings us to the point on how to manage change. Some of the lessons I have learned along the way from my own experiences and from some of my colleagues.

ChangeMgmt

First, Find the Nay Sayers – there will always be some. In the early stages, there are more. Key is to identify them quickly and try to neutralize them early on. There are always some left but try to maximize the ones on the positive side.

Second, Get to the Real Issue – like the country general manager in the example above. When we were able to understand the issue behind his position, it was easier to develop an alternate model that would address his authority concern while launching the expansion plan. Focus on people and their concerns. What they say or do is often a cover.

Third, Create a Spark – in the first example where Business, IT and Finance were all resistant, it was very difficult to get anything started. In one of the meetings we brought their projected income statement showing negative cash flow in subsequent quarters. Their future was in front of their eyes. Message was clear and it sparked the need for change.

Fourth, Respect everyone – change is not about organizations or systems or cash flows. It’s about people. If we get the right buy in from people at all levels, change will be successful. So, however long it takes, listen to everyone and try to address as many concerns as possible. Don’t disrespect or stomp on people. Carry them along!

Last one for this blog, Have the right Leader – this is not something new. Lack of a change leader will impede the progress. Nominate someone who represents the change, lives it, practices it and preaches it. We all look for role models in our personal and professional lives. Elect the most common role model for your change!

In the dynamically changing socio-economic market conditions, make CHANGE a weapon to be more competitive!

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Posted in advocacy, analytics, behavior, change management, leadership, management, productivity, thought leadership | Tagged , , , , , , , , , , , | 1 Comment

Science of Persuasion – simple steps via cool animation!

I came across this tweet “Science of Persuasion” by www.influenceatwork.com.

What impressed me is the following

  • Using animation was really cool and it has a long lasting impact on the audience – many management gurus and consultants are now using animation because a picture is worth thousand words. In this case, moving pictures with a narration register very well in your memory. This new style is certainly more effective.
  • Concept has been simplified such that anyone can learn and apply we all have to persuade others in our jobs. It’s not just for sales people. A consultant has to persuade the client, a financial analyst has to persuade the market, a clerk has to persuade the boss, a business analyst other departments, a teacher to students (and vice versa), parents to kids (and vice versa).  There is persuasion all around us and everyday. With everyone trying to persuade the other, how do you do it effectively and in simple steps. That’s what I liked about this animation.

I have captured the key steps here for quick read but you can watch the full video on You Tube. http://youtu.be/cFdCzN7RYbw

2013-07 Simple Persuasion1

Always be the first to give. Don’t wait for others. People will reciprocate and so should you. 2013-07 Simple Persuasion2

Create the need when it does not even exist. Sometimes people are not sure what they want. 2013-07 Simple Persuasion3

People trust expertise but it takes a lot of effort to get to that level. Leverage other experts to endorse you. 2013-07 Simple Persuasion4

Make small commitments and deliver accordingly. No harm making large commitments either but see what you can deliver soon and effectively. 2013-07 Simple Persuasion5

Get to know people. Don’t see people as a transaction or objects. Understanding people will help achieve better results (for both sides). 2013-07 Simple Persuasion6

When going gets tough, look for mass consensus. Majority always rules especially if someone is trying to block you with their personal agenda.

Simple and Effective. You could apply these in your next meeting, next discussion. Good luck persuading!

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Wow customers at the speed of Hana…

I am a supply chain guy. All I can think of is to make sure any product is available to customers when they want it and how they want it. No pressure but admit it, in this digital age, customers have more power and more options.

So, how can we service customers at the speed of their changing preferences and demands? Sales and marketing people live by the mission of keeping the customer engaged. But what can we do as supply chain people? I lead with the principle of “promise to deliver and deliver to promise”. Let’s break that down –

Promise to deliver – a commitment to ensure that our products and services will always be available when customers want them.

Deliver to promise – a commitment to deliver the right quantity at the right time, and to ensure best quality in our products and services.

In order to fulfill this promise, companies have been focusing on right people, right processes and right technology. With the new era of big data and social media, companies now need right information as well. It’s the integration of these four components that have hana 4bizcomponentshelped them to satisfy their customers better. However the buck doesn’t stop here. We live in a world of information chaos. There is data all around us and predictive analytics is playing a big role in harnessing this data to develop a competitive advantage. You would think that by balancing the 4 components with the envelope of analytics, one would have achieved the nirvana of being a top player in the market. Sorry to disappoint but the world is moving faster than we think.

You have the data and you are applying the analytics to make meaningful business decisions to retain or attract customers. In this race, time is of essence. Usain Bolt is the fastest athlete in the world. He runs 100m in less than 10sec and holds several records.

Imagine this. Bolt is at the starting line when people start tweeting about what he is wearing and what are his chances to win. In the next 5 sec, when he is at the 50m marker, there are thousands of tweets, facebook messages etc. about his speed, performance gear he is wearing and more. And by the time he finishes the race (<10sec), people are already ordering his shoes, socks, shorts, wristband, the drink in his hand and there is chatter all over the web. How would you like to have a marketing campaign in the next few seconds targeted by age, gender, region, income range, marital status, etc.?

In a traditional supply chain, it would have taken days to launch such a campaign. However, in today’s world there is a groundbreaking technology that can actually help perform such an analysis faster and drive agility and flexibility in your supply chain operations. Meet Hana by SAP!

In simple words Hana is an in-memory database, something like Macbook Air but more robust and powerful at an enterprise level. As SAP says in its publication “Frequently Asked Questions – SAP Business Suite Powered by SAP HANA” – “It provides a modern platform for real-time applications and real-time analytics, while simplifying existing IT landscapes. With SAP HANA, customers also have a choice of deployment models and partners, providing lower cost and faster innovation from an open ecosystem.”

Hana_drivers

Hana Drivers (source: SAP)

Hana is the Usain Bolt of the technical world. It speeds up computing power to new levels such that processes that used to take hours on traditional databases can now be run in a matter of minutes. Think of how much time you could gain in your order to cash cycle and how responsive your supply chain could become with faster analysis and decision capability.

Lets narrow this down to Supply Chain Logistics – SAP Extended Warehouse Management and SAP Transportation Management. In January 2013 SAP announced that SAP Business Suite is now available on Hana but we haven’t seen the details for EWM and TM yet. So I have been going around and asking people what improvements they would like to see with EWM and TM on a Hana platform.

Here is a wish list –

  • Labor Management Performance Analytics – Hana enabled real time performance reporting so that warehouse managers can run dynamic operations enabling flexibility to manage order variations. Capability to match volume mix to labor skills would help taking any type of orders at any time and balancing operations to ship orders as promised to customers.
  • Wave Management and Order Allocation – one of the longest processes in EWM that sometimes takes hours for large order volumes. Hana could reduce wave planning time to a few seconds or minutes so that orders can be released for pick/pack/ship quicker and more frequently, thereby improving throughput and reducing order cycle time.
  • Slotting and Rearrangement – Slotting simulations for a warehouse can take up a lot of time hence resulting in passive operations, i.e. warehouse profile adjustments usually lag the order mix, and more often end up being inefficient. How about Hana enabled slotting recommendations in real time so that the warehouse profile could be adjusted dynamically according to the order mix?
  • Freight Planning and Optimization – This could be a nightmare sometimes. Long durations to plan hundreds or thousands of shipments through selection of the right mode of transportation and determination of the best route to minimize the cost of transportation while maintaining faster delivery times forces transportation managers to dedicate labor and perform these activities well in advance. This reduces the flexibility to make adjustments without incurring huge costs. Hana should drive significant reduction in planning cycle and should support “what-if” scenario based real time planning. Transportation should not be a bottleneck but in fact a seamless transition from warehouse operations to the end customer.
  • Event Management – any supply chain is prone to disruptions, changes or unknown events that require supply chain managers to make significant adjustments. Most of the times, these adjustments either result in customer disappointment due to service issues or result in increased supply chain cost to meet customer standards. Event Management triggered adjustments should allow real time re-planning of transportation schedules and warehouse operations that Hana should be able to support.

Many of us have great expectations from Hana for EWM and TM because it could help build a true “real-time, responsive and agile” supply chain, and we can truly Wow our customers at the speed of change – enabled by Hana!

Posted in analytics, Business Suite, Hana, productivity, SAP, supply chain, thought leadership, transportation, warehouse management | Tagged , , , , , , , , , , , , | Leave a comment

And why would I run my warehouse on SAP EWM?

I meet with a lot of clients who ask this question. They believe in the best of the breed systems and a proven history of operating warehouses successfully. In the past I used to give detailed answers about how great EWM features are, how it can support the business, etc. Now I smile and begin my round of questions with “Why wouldn’t you like EWM?”

  • Don’t you want to reduce operational costs?
  • Don’t you want to improve customer delivery performance?
  • Don’t you want to improve inventory visibility?
  • Don’t you want to improve fill rates and provide real time delivery status to your customer?
  • How about empowering your people with data on how they are performing?
  • How about taking your decisions by leveraging data on how your network is performing?

The list is long but typically 2-3 questions are enough for my clients to understand what SAP EWM can do for their business.

The logic is “simplicity with complexity”. With cost containment pressures and fluctuating demand, supply chain executives are looking for systems that will be simple to install, simple for people to follow, while still supporting complex processes.

Simplicity – unlike other BOB systems, SAP EWM does not require bolt-ons for labor management, slotting, yard / dock management, kitting, cross-docking, MHE management and many other processes. Having these capabilities in a single platform reduces IT cost and provides one system for Business to learn and operate.

 Simplicity extended – EWM is scalable from small warehouses to large warehouses. An entire supply chain can now operate on a common backbone thereby improving information sharing.

Complexity simplified – “but large warehouses have complex processes that are an over kill for small warehouses. How do we manage that?” Answer is not in the software but in the design of how you operationalize the system with different templates. Further, think of EWM as a supply chain system and not just a warehouse management system. In my previous blog entry, Developing an Integrated Supply Chain, I had highlighted the benefits of an integrated supply chain. EWM integrates your warehouse with front office functions, hence helping you to improve customer experience.

The Myth – “EWM is expensive to implement.” This statement was true not too long ago. 2011 was a remarkable year as cloud technology evolved and industry took a turn. Think of EWM as Software as a Service that reduces your total cost of ownership. And, even with limited skill set there are new ways of accelerating implementation to reduce your CapEx.

Well, I can keep going but you have a business to run. Send me an email if you find yourself in the situation I have described above. You can also meet me at Sapphire Conference (May 14 – May 16, 2013). I will be showcasing how IBM is helping clients to implement SAP EWM successfully!

Posted in productivity, SAP, supply chain, thought leadership, warehouse management | Tagged , , , , , , , | 1 Comment

Developing an Integrated Supply Chain

The concept of an integrated supply chain has been around for several years but it has taken a new turn since last year. With the advent of cloud, social media and advanced supply chain systems like SAP, companies are now able to create a low cost, efficient, agile and integrated supply chain.

Let’s start with the basics – what is an integrated supply chain? There are numerous definitions floating around but in simplest terms it is “an effective information exchange between supply chain partners (internal and external), in a timely manner and at fast speeds to creating a value chain network”.

At the heart of this network is the first key element – information or data – like demand, forecast, operational status, inventory status, order status, exceptions, transportation and more. Data exchange between various supply chain partners allows better visibility of inventory, and supply chain processes & events thereby allowing companies to service their customers better. Industries concerned with food safety, patient safety or sustainability can further collaborate to share additional supply chain data for end-to-end traceability. And, as social platforms are becoming data-rich, their influence is permeating in supply chains as well, as I have explained in my article “Social Media in Supply Chain” (https://csuitepen.wordpress.com/2013/03/22/social-media-in-supply-chain-the-new-frontier/)

The second key element are the supply chain partners. Traditionally companies have viewed supply chain as the one within their organization. In the last decade, when globalization peaked, companies started collaborating with their suppliers and third party service providers. The new integrated supply chain goes beyond these two models by bringing customers, customer service, marketing and IT as enterprise partners. A 2012 CEO study conducted by the IBM Institute of Business Value (http://www-935.ibm.com/services/us/en/c-suite/ceostudy2012/) reveals that CEOs see renewed or new partnerships between Operations, Marketing and IT to build an agile and customer centric organization. Figure 1 provides one of the views of an integrated supply chain of the future.

IntegratedSC

Figure 1: One view of an Integrated Supply Chain

As there are more partners, there are more complexities driving the need for simplification, timeliness and speed of information exchange – the third element(s). Simplification mostly relates to IT technologies that provide a robust and low cost common platform for the partners to come together. Cloud platform brings these benefits to companies. Unlike the traditional on-premise infrastructure, supply chain technologies are now available as SaaS offerings via cloud. Companies can chose a subscription based model that lowers upfront cost, reduces the burden of maintenance & upgrades, provides reliable service and future scalability, thus reducing the total cost of ownership. Also, SaaS offering via cloud is a multi-tenant model, which implies that a company and its supply chain partners can co-exist leveraging the same system thereby minimizing the need for extensive integration and maximizing data sharing. This data exchange can happen in almost real-time and robust infrastructure capabilities of cloud service providers like IBM ensure faster speeds.

Now that you have a view of an integrated supply chain of the future, the next question is “how to develop one?” It typically starts with a supply chain analysis to identify a company’s capabilities, strengths, weaknesses and opportunities in the context of three key elements of an integrated supply chain: (1) What data is available to them and how effective is information exchange? (2) Who are the supply chain partners and how well are they connected? (3) What IT systems are currently in place and what capabilities do they provide? This particular topic is vast and generally requires an expert to do such an analysis.

After the business analysis, a critical decision for most companies is to select a suitable technology or system that would support the vision of an integrated supply chain. SAP offers an extensive suite of supply chain solutions that help achieve this vision (http://www54.sap.com/lob/scm/software/overview/highlights.html).

–       SAP Advanced Planning and Optimization (APO) provides advanced planning capabilities for demand planning, production planning, cross-docking, supply network planning and global availability by integrating multiple forms of data including supplier/company/customer forecasts, historical data, POS data, capacity, inventory position and much more. Advanced predictive analytics capabilities allow companies to run simulations for “what-if” scenarios especially for unplanned events

–       SAP Extended Warehouse Management (EWM) provides basic to advanced warehouse operations capabilities by including labor management, operational KPI cockpit, cross-docking, complex put-away & picking logic, material handling capabilities, voice enablement, and standard integration with APO, SAP Environment Health & Safety (EH&S) and Global Trade Services (GTS)

–       SAP Transportation Management (TM) provides full suite of transportation capabilities from shipper and logistics service provider perspective. New algorithms and advanced analytics provide effective route and freight planning capabilities, mobile screens for real time updates, and event management to track shipments throughout the supply chain (all the way up to customer delivery)

–       SAP Supply Network Collaboration (SNC) is a 360-degree collaboration tool that provides a gateway to integrate various supply chain partners. SNC provides a multi-mode communication layer for data exchange and visualization of supply chain events and results. SNC is particularly suitable for APO functions by allowing suppliers, contract manufacturers and distributors to provide their data to the host company. This allows sharing of forecasts and inventory in almost real-time

–       SAP Track and Trace addresses supply chain traceability with three solutions – Global Batch Traceability (GBT), Auto-ID (AII/OER) and Event Management (EM). GBT enables complex batch genealogy and end-to-end batch tracking, while supporting numerous formats of batch numbers. Auto-ID (AII/OER) enable RFID and other barcode scanning activities and capture serialization of batch data from manufacturing to end customer. OER is the enterprise repository for product tracking and provides reporting for regulatory requirements. Event Management (EM) in the scope of Track and Trace provides visibility of processes and assets involved in the supply chain. Key application of EM is automated exception resolution and alert mechanism, hence creating a responsive supply chain

–       SAP Sales and Operations Planning (S&OP) provides a unified model of demand, supply chain and financial data to balance supply & demand. Real time simulations allow scenario based decision making and drives cross-functional collaboration in the organization

SAP has additional specialized offerings for supply chain optimization (Figure 2). The ones highlighted above are the key ones that companies worldwide are adopting and realizing benefits of an integrated supply chain.

sapscmsolxns

Figure 2: SAP Supply Chain Solutions (source: SAP)

Furthermore, SAP has made a game changing technological innovation called SAP Hana – an in-memory data platform for real-time analytics and applications. By combining the transactional data and analytical data via in-memory computing, Hana architecture provides “never seen before” type speeds, for example, reducing forecasting process from 8-9 hours to 1-2 hours. Additional information on SAP Hana is available on http://www.saphana.com/community/learn. SAP has announced that its supply chain applications are now powered by Hana.

Lastly, SAP supply chain applications can also be hosted in the cloud. IBM cloud-based solutions for SAP (http://www.ibm.com/cloud-computing/us/en/sap/) incorporate IBM best practices, SAP solution offerings and a robust platform to provide an agile and low cost integrated supply chain.

With the dynamic socio-economic market factors (like emerging middle class & fast growing emerging economies), rapidly changing technology and continued global interdependence, companies are being forced to be more innovative, be more customer centric and be more efficient than ever. In the midst of this race, gain competitive advantage by developing your integrated supply chain.

For more on SAP Supply Chain Management– join me April 24-26 in Prague at Logistics & SCM, PLM, Manufacturing, and Procurement 2013. Also make sure to get the latest event updates by following #SCM2013 on Twitter.

http://scm2013.wispubs.com/Prague/Sessions/4391/?tid=986&s=&u=

Twitter: @saxenaas

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Social Media in Supply Chain – the new frontier

2013 has been an exciting year so far. I have been to several industry events like the SAPinsider conference and industry specific innovation forums presenting and discussing the future of supply chain. At the same time analytics, in-memory computing, big data, mobility and social media have been hot topics as the application and results of these technologies in business are tremendous.

social-1This year seems like the part of big-bang theory where our digital universe is converging with a hyper-connected network of 15+ billion mobile devices and internetofthings, and social media is stringing them together. Companies and consumers have started to understand the value of these new technologies in customer facing activities like marketing and product development. Social media platforms like facebook, twitter, pinterest, google+ etc. have massive information about consumer preferences and emerging trends, and the CMO office has started harnessing that data already. Agreed that only a few companies have embarked on this journey but the understanding and need have been realized by many.

In the midst of this evolution, a new question has started coming up – “What does social media has to do with the supply chain?” Let’s examine that as some of us believe that social media will provide tremendous improvement opportunities for supply chain, like faster time to market, improved customer service, working capital reduction and more.

When was the last time you ordered something online from Amazon or Macy’s or your favorite e-tail store? Remember getting a notification like “Your Order will ship in 2-5 business days”? And, then one of the days you get an email that your order has shipped. However the order did not get delivered on time or it was damaged or incomplete etc. You obviously were not happy and went online to post a review about your experience on facebook or the company’s website or your blog. Similarly your customers are writing about their experience all over the web. How about tapping into that information and relaying it as a feedback back into your supply chain operations? This is the best performance scorecard that is available today.

Most companies measure fill-rate, accuracy and on-time delivery type metrics that I call internal metrics. They represent how we performed within our supply chain but do not give us the full view of how well we serviced our customers. And that’s the power of Social Media in Supply Chain. In the supply chain scorecard, add one more box for customer’s voice that is an aggregation of social media data. This is only one use case. So let’s look at one more example.

It is Monday and as a Supply Chain Executive, in your weekly operations conference call you find out that certain products have an unusual demand for the last few days. Your distribution centers are unable to keep up due to insufficient inventory or staffing for the unpredicted demand. This is a very common scenario for most companies despite state of the art planning systems. In today’s world, your CMO most likely knew about this upward tick. How? Consumers started “liking” your product on facebook or were posting “positive” reviews on external websites for the last several weeks that triggered this uptick in demand. You wish you had access to that information to predict unplanned events like these and had planned for inventory and labor in advance thereby relieving the strain on your supply chain and satisfying your customers.

social-2

Simple scenarios like these have immediate benefits of managing your costs (inventory and labor) while maximizing revenue (filling available demand) and servicing your customers well (adaptive supply chain). Integrating social media in your supply chain will provide competitive advantage as companies are looking for newer ways to lower operating costs and to provide more value to their customers. This is just the start. As social media propagates from B2C to B2B world, the level of information available will be more extensive. The benefits will then extend to end to end supply chain giving more opportunities for optimization.

So, begin the social media campaign for your supply chain now!

And don’t be this –>

social-3

Source: http://dilbert.com/strips/comic/2011-03-12/?Page=3

(coming next – Analytics in Supply Chain)

Posted in analytics, internetofthings, mobility, productivity, social media, supply chain, thought leadership | Tagged , , , , , , , , , , , , , , | Leave a comment