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Supply Chain Software & Manufacturing Software

Satisfying the CEO: Nick Miller, Crimson

The supply chain represents such a significant spend that for many companies the instinct is often to ensure robustness at minimum cost. However, the supply chain can be used to drive growth and competitive advantage rather than just be a cost centre. There are three levels of maturity for a supply chain, and real step-changes in business performance occur as the maturity increases: 1. Aligned to basic business needs. This is the aim of most supply chains – they are designed to meet specific but fairly rudimentary requirements of the business, achieving broad service levels whilst minimising overall costs. 2. The supply chain aligns to multiple business needs through being segmented. Here, the supply chain delivers differentiated products and services whilst remaining streamlined and efficient. This is when companies begin to move away from their competitors. 3. Adaptability. Here, the supply chain can add new capabilities quickly and effectively as needs change, to deliver innovation or new customer requirements without disrupting existing operations.

Get back to basics!: Ian Batey, Capgemini

When I started implementing manufacturing systems in the mid-1980s, life was simpler. The systems (ERP, MRP II, etc) did what they were supposed to do, and the opportunity for tweaking was limited. The journey from idea to implementation was rarely more than 18 months. Implementation itself took less than a year and it all cost between £200,000 and £400,000 for a typical medium-sized manufacturer. Today, the same business will take two years and spend 10-20 times as much on a new system implementation. Yet surveys don’t show an equivalent increase in either performance or satisfaction. Even accounting for inflation – and increases in capability and expectations – this is scarcely a change for the better. However, it’s not really the products that are to blame, though they all have their quirks. By and large they work. And they can be made to work well. So what has gone wrong?

Keeping the supply chain pumping: Cliff Mills, NCC Research

The lifeblood of any business is its supply chain, which manages the flow of raw materials into the organisation and finished products out of it. This can involve many and varied interactions with suppliers, partners and customers – and the complexity of business today is such that companies are now totally dependent on their IT systems to keep track of and manage the whole operation. For this reason, there is no such thing as a standalone supply chain operation. When any system controls and monitors a business process, it needs to do this in conjunction with all the other corporate systems and functions. And if information cannot be seamlessly passed from one process to another, then inaccuracies and inefficiencies will occur, affecting business performance. Companies continue to spend on their supply chain, in order to gain competitive advantage by cutting operational costs while simultaneously improving customer service. To achieve this, it is vital to have a clear vision and strategy as to how these goals can be reached.

End of EDI?: Denis O'Sullivan

When electronic data interchange (EDI) was first introduced more than 30 years ago, it was heralded as a ‘silver bullet’ to cure supply chain communications problems. But while there has been considerable improvement in trading community communications, the use of the web in today’s supply chains has brought challenges which EDI struggles to meet effectively. Of course the internet has brought its own problems, but it has created opportunities for taking the trading community to new levels of connectivity at far lower prices. There are several issues with the exclusive dependence of companies on EDI to manage their supply chain communications. These vary from supply chain to supply chain but are often a result of one of more dominant trading ‘gorillas’ in the chain. Dominant players often try to impose their standards on other participants – particularly smaller suppliers. And while this may sound reasonable – they are a big customer – in fact it is impractical.

Value chain: how can IT help?: John Pope

The concept of the value chain is intriguing. It is usually applied to the downstream end of business where there are substantial advantages in managing the links between procurement, warehousing/breaking bulk and distribution to the customer. But why not extend this concept upstream into manufacturing? The potential benefits are shown in this example of an attempt to remodel a business. Over a period of three years, I helped the new chief executive of a manufacturing business. The company was concerned with providing major assemblies for the construction industry. There was an enormous range of standard products, with a variety of sizes and many opportunities for producing higher-cost ‘specials’. The firm had a very active design and development policy and a team devoted to keeping its products competitive and ahead of those of other manufacturers. It had a very complete range of manufacturing facilities on several sites, some of which were a considerable distance from the main site.

Forecasting: myths and misconceptions: C Poirier & C R Troyer, CSC

Most businesses today lack sound enterprise-wide forecasting processes. This can cause major problems because forecasting drives many key make-or-break decisions: how much inventory to deploy; how many goods to produce; how to staff key capacity centres; and how much material to buy. Get these decisions wrong and both customers and shareholders can be left dissatisfied with your company’s performance. Yet many organisations have essentially given up on ever making reliable projections about what the demand side of the supply chain is doing. This surrender leads to sub-optimised results because a reliable enterprise-wide forecasting process unlocks a wealth of benefits. Leaders do not give in. Rather, they spend time and effort on eliminating many of the problems. They introduce new processes and systems that bring greater accuracy and efficiency to the steps involved in forecasting, planning and inventory management.

An ounce of prevention: Mark Crone, Jeff Holmes & Kyle Hill, PRTM

In today’s uncertain business environment, global companies need to make managing supply chain risk a top priority. In doing so, many firms focus on their manufacturing operations. But they need to take a more holistic view of the supply chain. This means not only developing the ability to identify areas at risk, but also having the strategies in place to eliminate those threats before they wreak havoc. Fires, earthquakes, hurricanes… these are some of the natural disasters that have long disrupted the balance in extended global supply chains. Then there are the risks ‘du jour’ – piracy, salmonella outbreaks, oil price swings. Yet sometimes events that don’t make the headlines can take just as great a toll: the default of an important supplier, changes in environmental regulations, or restrictions on port capacity, to name a few (see Figure 1). Whatever the culprit, the threat of a sudden disruption makes risk management critical for any company that has a supply chain spanning several continents. Yet businesses often underestimate what’s needed to manage risk effectively or where their supply chains are most at risk.

On track for recovery: Nick Gill, Capgemini

The global economic crisis has hit much of the manufacturing world hard. Reduced consumer demand has led to swift production cuts at factories in many markets, while the credit crunch has prompted some companies to hoard cash. Factories in the world’s largest economy are producing fewer goods than they have in nearly three decades. In response, companies need to assess their entire value chain as they look for ways to keep costs low and improve efficiencies while continuing to innovate. To help address this challenge, Capgemini has undertaken research in collaboration with the University of Edinburgh into the ‘Best-in-Class Global Manufacturing Value Chain’.

In demand: Professor Robert Shaw, Demand Chain Partners

Achieving fully integrated demand chain automation is a few years off for most companies, but the technology to achieve it is available today. More and more companies in different sectors are increasing the degree of automation, integration and control of their demand chain every year. And by 2010 there will be major consumer goods companies and retailers able to claim that their demand chains are fully automated. Demand chain automation (DCA) is a powerful competitive weapon for large companies, especially multinational firms. Companies experimenting with it include Amylin Pharmaceuticals, Dell, Hewlett-Packard, HSBC Card Services, Intel and Warner Bros Entertainment. This article examines: why DCA is growing so fast; its key characteristics; who uses it and why; and what benefits it provides.

For planet and profit: Giles Hutchins, Atos Consulting

In tough market conditions, organisations are under increasing pressure to cut their costs and run leaner and more efficient supply chains. This climate provides the right environment to become a more sustainable organisation. Sustainability is moving beyond compliance. It is creating new opportunities to gain competitive advantage whilst also driving cost-reduction programmes. As a result, organisations need to establish how sustainable they are today, then plan and implement a more effective and cost-efficient programme to become a truly sustainable organisation. The four key drivers of sustainability are costs, revenue, risk reduction and competitive advantage – all priorities for businesses in turbulent market conditions. However, the journey to become a truly sustainable business must not only focus on direct factors such as saving costs and increasing revenue, but also indirect ones such as environmental and social aspects, employee, customer and supplier engagement.

Cloud with a silver lining: Denis O'Sullivan, NetworkedWorld

The current hot information technology is internet ‘cloud computing’. Not only is this set to change the way we all use computer technology, at work and at home – but we are seeing an unusual development. Supply chain operations are amongst the first beneficiaries of cloud computing, yet so far little is happening with the cloud related to manufacturing processes. Of course, when it comes to the latest developments in software technology, logistics and transport managers are usually at the back of the queue. There are many reasons for this – and a common one is that manufacturing and ERP applications take business and budgetary precedent. Once those manufacturing systems were in place, there was relatively little budget left over for the logisticians who were looking to make operations more efficient. However, with cloud computing this is now changing.

Balancing act: James Cockroft, Xantus

During economic downturns, many organisations focus on improving efficiencies across all functions of the business. One example of this is to minimise the amount of stock held – both input and output stock – without adversely affecting the supply to customers; a balance that is very difficult to achieve. This is where supply chain management tools can come into their own, enabling businesses to take control of the end-to-end process, through the effective management of materials and resources. They enable organisations to correctly plan production requirements based on such factors as market information, historical trends and promotions – so that customer demand is met. Being able to more accurately estimate the supply volumes to meet production demands in turn meets the demand from your customers.

Weathering the storm: Martin Williams, Bisham Consulting

In recent years, despite the steadily escalating price of oil, the business climate has been good and supply chains have generally become more efficient. As a result, most companies will have signed off their supply chain budgets for 2009 reflecting ever greater demands for better service and lower cost. However, over the last few months all the assumptions for the foreseeable future have been shattered. The threat of a global economic slowdown has become a reality. There is volatility in the markets, firms are finding it difficult to raise capital and all the economic indicators are pointing in a downward direction. Suddenly healthy margins have disappeared and hopes for incentivised bonuses have been replaced with concerns about job security. Retailers are nervous about high-street sales, the construction industry is in freefall and the car industry has been forced into factory holidays and lay-offs.

In this together: Jason Barclay, Picme

Companies have often talked about supply chain improvement, but what does this really mean in an environment where direct purchase cost is the key? Currently, manufacturers are able to pass on price rises throughout the supply chain for the ever-increasing cost of energy and raw materials, but is this sustainable in the medium to long term? And can consumers afford this additional outlay? If we consider true lead times, it is not unreasonable to assume that products being made upstream today will not reach the end consumer for several months. To improve efficiency, and therefore cost, organisations within supply chains need to work together to determine what creates value and how to make it flow quickly along the supply chain. If we consider the entire length of supply chains, organisations need to develop new ways of working between them that reduce overall cost, lead time, inventory and the subsequent working capital involved. And traditional methods of reviewing supply chain performance need to be replaced to meet the challenges ahead. Simply calculating earnings before tax and deprecation will not motivate companies to seek decreasing lead times.

A new dimension?: Tim Lawrence, PA Consulting Group

In the last year or so there has been a lot of talk about a new approach to supply chain management – an approach which turns the supply chain from concentrating on cost reduction into becoming a flexible and responsive, service-oriented commercial competitive edge. This new approach has been coined ‘customer-driven supply’ (CDS) or customer-driven logistics. But is it just talk – is this a commercial competitive edge or just a myth? There’s no doubt that supply chain is coming out of the shadows and is increasingly being recognised as a key driver for improving financial performance. More leading companies are looking to the supply chain to create a competitive edge which will directly impact their financial performance. As this recognition emerges, supply chain is becoming much more closely linked with sales & marketing, and leading-edge companies are integrating demand creation activity with supply chain capability. These new supply chains are more customer centric, with strong collaboration between supply chain partners who are all focusing on the ultimate end customer.

BRIC building: Nick Gill, Capgemini

Until recently, emerging market economies were mainly thought of as a source of low-cost manufacturing and cheap labour. This view led to substantial increases in the foreign direct investment (FDI) in these countries from the early 1990s onwards, as more industries became globalised and companies in the developed nations attempted to gain access to the rapidly growing domestic economies of the BRIC nations – Brazil, Russia, India and China. A less-reported but growing trend, however, has been the growth in outward foreign investment from these emerging economies. Although FDI from BRIC nations is still small compared to that from developed countries, it is fuelled by inward investment and strong growth in their home economies. This growth is allowing emerging multinationals to manifest ambitious internationalisation objectives that threaten the Western business model and promise to reshape the current business landscape.

Leaning towards innovation: Nigel Issa, Atos Consulting

Today there is a clear distinction in performance between organisations that invest in their product innovation capabilities and those that do not. The global economy enables businesses to rapidly eliminate competitive operational cost advantages through outsourcing and low-cost country production. As a result, organisations are increasingly competing and sustaining competitive advantage through innovation. This means pressures to innovate have never been greater, which in turn generates greater pressure on companies’ product innovation capability. The need to compete via innovation has been heightened by increased regulation and specialisation of consumer needs. As a result, the velocity and volume of demand for new or customised products has significantly increased. Von Braun in The Innovation War (1997) found that: “Since the 1950s product lifecycles have shrunk by a factor of four as a result of the accelerating pace of innovation.” The implication is that organisations have to innovate more – ie, bring more products to market – in shorter timeframes than they were previously used to.

The innovation culture: Mateen Greenway, EDS

Manufacturing and supply chain companies are keen to innovate and be seen as innovative. But why should innovation be so attractive? After all, innovation is not a thing that can be purchased or installed like a computer system. Rather it is a culture that must be adopted and nurtured – and it needs to have some aim or purpose for the company concerned. So why is there a focus on manufacturing innovation now? This trend can be traced back to the 1990s and early 2000s which can in many ways be seen as an era dominated by corporate cost cutting. The mantra was ‘if it is not broken, then do not fix it’. But this approach was a short-term view and when properly applied, concentrated on reducing waste within an organisation. Information technology also plays a role in this. The widespread perception that IT is a cost of doing business rather than something that contributes to the success of a company suggests there is no clear link between IT and business value.

Think now, save later: Gideon Hillman, Hillman Consulting

The debate about extending the use of RFID across supply chains and negating barcodes has gone on for many years and will doubtless continue for many more. But whether it’s conducted in the media or at conferences, the debate is usually being argued by individuals with significant sector and technology knowledge and presented to an audience who may not have the same level of understanding, but are the intended users of RFID technology. What companies really need is a short, simple summarised overview that helps them to increase their awareness of the needs, wants, do’s and don’ts when planning their RFID supply chain systems. The single most important message is that defined objectives and planning are paramount. It is recognised that RFID will enable – and already has in some cases – a new era of business optimisation, managing and increasing efficiencies throughout the supply chain. However knowing that it can assist your business, and understanding how it will do so, are two very different things – let alone knowing how to actually implement a system that provides a sound return on the investment, whilst meeting your objectives.

Missing link?: Adam Jura, Datamonitor

Agility is a term that’s been used extensively within the manufacturing industry in recent years. It’s been applied to areas such as IT, production, go-to-market, supply chain and even talent management, and it doesn’t look like abating. What makes it such a fascinating concept is that there is no end point for manufacturing companies – it’s a constant struggle to improve on existing operations and processes. But actually achieving this agility can be challenging for companies that ultimately have a wide range of operational concerns. Datamonitor’s research into the manufacturing industry has highlighted a number of strategies that companies can execute to drive agility across organisational units and functions. Not least of these is linking plant-floor and enterprise systems – the subject of Datamonitor’s recent report, Linking plant-floor and enterprise systems for greater manufacturing agility. The two environments of the plant-floor and the enterprise have traditionally been disparate, as manufacturing companies invest in what are effectively divergent IT strategies.

Evolution of EAM: Nigel Spooner, Logica

Enterprise asset management (EAM) has undergone a rapid change in recent years, maturing into a co-ordinated and focused strategy from its roots in various isolated functions. But the recent research study, Agile working: unlocking productivity improvements for physical asset managers in Europe, commissioned and published by Logica, suggests that organisations could be missing out on huge productivity gains by failing to use new techniques and technologies to manage assets more effectively. In fact, an inability to provide real-time asset information to engineers in the field, combined with a lack of flexibility to reschedule their work dynamically, could be costing European businesses potential savings of €5 billion each year. The report reveals that field service crews in the telecoms, utilities, transport and allied service industries spend over a third (39%) of their time back at base or en route to jobs, and only 61% of their time performing tasks in the field. By reducing travelling time and increasing productivity, companies with 500 field workers could achieve annual cost savings of almost €2 million each.

Staying power: Greg Cudahy, Thomas Jacobson & Tiago Salvador, Accenture

These days, there’s no question that more and more companies are recognising the key role pricing plays in improving performance. This growing awareness of the need for strategic pricing has led to a surge in the use of sophisticated pricing optimisation software – and a noticeable increase in the ranks of chief pricing officers. Yet, in reality, most companies’ pricing competencies are paper thin. Despite pockets of analytical expertise in pricing at many organisations, the insights gained are not getting to where strategic pricing decisions are being made. There are abundant examples – which financial analysts are all too familiar with – of companies being drawn into bloody price battles; and other companies are in danger of defaulting to a ‘win-at-any-price’ mentality as soon as the economy weakens. Companies are developing a sense of their customers’ willingness to pay based on demographic and geographic factors. But on their own, these and other capabilities cannot consistently test or track the effectiveness of various pricing moves. In short, most of today’s pricing capabilities are simply not sustainable.

Pulling it all together: John Pope

As I write this I have a client in mind, a mid-size engineering company of about £30 million turnover which should be making about £2 million profit but is not. This company manufactures, on three sites, large-ticket items for the construction industry and also for home improvement. It has a big range of standard products in a variety of sizes and finishes, and an even bigger range of specials, which are manufactured to customers’ order. It supplies these products to its market through a combination of specialist dealers and construction companies, and its despatch and transport bill is big – a lot bigger than its meagre profit. Concerned about its distribution costs, the company commissioned a pretty good survey by specialist transport and distribution consultants who reckoned there was scope for several hundred thousand pounds a year saving if it was managed better. Integrating the management and production of distribution is their solution. So should the client go for it?

All-seeing software: Simon Holloway, Bloor Research

Scenario 1 – No-one needs to tell you that hospitals are busy, sometimes hectic, places. Patients, doctors, staff and equipment are continually on the move. Scenario 2 – Production shopfloors and warehouses can be littered with expensive assets that people cannot find quickly enough to answer the urgent order. Scenario 3 – How many people are in a facility prior to the fire alarm going off? Locating people and especially equipment can be a time-consuming and frustrating task. In all these scenarios, real-time locating systems (RTLS) can help. But what is an RTLS? Well it is any wireless technology that can be used to continuously determine and track the real-time location of assets and personnel. An RTLS solution typically works by utilising battery-operated radio tags and a cellular locating system which detects the presence and location of the tags. The locating system is usually deployed as a matrix of locating devices installed at a spacing of anywhere from 50 to 1,000 feet. These locating devices determine the locations of the radio tags.

Why buy?: Denis O'Sullivan, NetworkedWorld

One of the biggest inhibitors to efficiency and high levels of customer service in the supply chain has always been a lack of real-time relevant knowledge. There is plenty of historical data about what went right and wrong, but it is a huge task to recover and analyse this to gain a real understanding. What is needed is real-time knowledge of what is happening out there now – but delivered in an affordable way, without the need for major capital expenditure. Yet companies are wasting money, time and resources in buying traditional software licences for their logistics and transport operations; and they wasting even more money on the capital expenditure needed for the hardware and annual maintenance and upgrades. There are also hidden costs, one of the most significant of which is the disruption to business for installation and regular upgrades.

Treasure hunt: Barry Payne, Chandresh Harjivan & Mark Deck, PRTM

Procter & Gamble. Eli Lilly. Boeing. These three companies, all at the top of their game, have something important in common: technology scouting, the ability to rapidly identify and locate emerging technologies to develop innovative products. This is no coincidence. For the third year in a row, the Economist Intelligence Unit’s survey of CEOs has reported that the failure to innovate is the one of the top risks faced in developed markets today. Indeed, 45% of participants in its 2007 CEO Briefing survey said they plan to rely more on outside sources of innovation over the next three years. As more and more companies realise, traditional approaches to innovation – where R&D organisations conceive and develop ideas internally – are no longer sufficient. To remain competitive, it’s now critical to supplement internal efforts with new technologies from the outside.

Towards the truly agile: Jeremy Batchelor & Ian Kirkpatrick

Despite all the apparent advances in information technology, we are still a long way from a vision of truly agile logistics systems. Furthermore, we are perhaps guilty in logistics of attempting world domination through management of the ‘supply chain’. So this article explores how on the one hand technology has to evolve considerably to deliver true agility, and how on the other hand as logisticians we need to ‘stick to the knitting’ of logistics. Over recent years, in moving through the terminology from distribution via logistics to supply chain, there has been an appropriate recognition of how vital the moving and storing of goods is to the long-term success of logistically intensive organisations.

Wisdom of crowds: Tony Fish

Web 2.0 (two dot zero) as a movement is about the network effect, collective intelligence, wisdom of crowds, tribes, clans, clubs and all other manner of long-tail matters. Web 2.0 is the passing phase from the first manifestation, 1.0 – which centred on cost reduction – to the intelligent web. Moving from 1.0 to 2.0 is the same as moving from separation, isolation and solitude to relationship, engagement and conversation. 2.0 companies are being built on a number of principles, which are different and have a significant impact on back-office systems, the supply chain and channels. The Web 2.0 movement collected its name in October 2005 – when Web 2.0 was first described by Tim O’Reilly (www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/what-is-web-20.html). The movement has at its heart an ideology of ‘harnessing collective intelligence’. The intelligence arises from consumers; as users interact with websites, they provide data on what is liked, wanted, demanded or worth sharing.

Wasting away: Ian Curling, PSM Consulting Services

In the western world, according to the experts, one in three of us is destined to become overweight. There seems to be very little evidence of any trend towards ‘leanness’. Except for supermodels, personal success seems to be reflected more in kilos added rather than kilos lost! So is this trend for the individual also being reflected in the health and wealth of the business corporation? It is 16 years since Womack, Jones and Roos gave new life to the concept of ‘lean’ in their landmark book ‘The Machine that Changed the World’, and it is 10 years since they applied lean thinking to the total corporation, not just the manufacturing processes. So in the last 10 years what have you really done to embrace leanness in the way you think and act in your business enterprise?

From plastic planes to asthma inhalers: Tony Cronshaw, PA Consulting

What do these products have in common: the ‘Femidom’ female condom, an aircraft made with composite materials, and the latest asthma inhaler? The answer is that all of these innovations, along with a raft of other ‘breakthrough products’, are pushing the boundaries of product complexity to new levels. At the same time, they present unprecedented challenges in terms of quality assurance (QA). The reason that western companies are moving to ever more sophisticated manufacturing is clear: products with genuine ‘breakthrough’ features can command a premium in the market. Whether it’s a new type of condom giving women more choice and control, quieter and more fuel efficient aircraft, premium food/beverages or the latest type of asthma inhaler, these innovations typify a trend to design advanced products that deliver new benefits for the customer, whilst restoring sales premiums otherwise eroded by low-cost imports.

The good habits of collaboration: Rod Horrocks, Procertis

Organisations are awash with technology that could potentially help them create and operate highly efficient, flexible and productive supply chains. But you have to look very hard to find a working example of supply chain excellence – even within a single organisation, let alone across an extended enterprise of partners. So what must organisations do to make their supply chains work the way they dream them? Companies need to rethink what it means to be a part of a supply chain, and in particular they must overhaul both their attitudes to collaboration and their habits of working. If companies build their supply chains together, and trust each other, they will achieve more than they’ll ever get from the deadly combination of computers and conflict.

The ultimate profit opportunity: A Mukherjee/R Sipcic, Accenture

To make informed forecasting and replenishment decisions, many companies bring together operational elements of production and distribution with sales and marketing, executing sales and operations planning (S&OP) collaborative improvement processes. As cross-functional and consensus-based processes, S&OP activities create value by keeping supply and demand in balance. But most S&OP arrangements fail to consider or fully account for the effects of pricing and promotional strategies on the upstream supply chain. So how does the use of sales and marketing instruments affect upstream replenishment capabilities and overall profitability? How do capacity, lead times and production status relate to a company’s ability to react to pricing or promotions-induced demand swings? Companies should extend the traditional S&OP process to include joint pricing and operational tactics. As Accenture’s research and client experience confirms, this combined effort can help maximise a company’s profitability and accelerate its journey to high performance.

Spot the difference: Andy Coldrick & Duncan Alexander, StrataBridge

The last few years has seen the emergence of differentiated supply chains to meet higher customer expectations, in an environment of fierce competition and pressure to increase market share. Cost and efficiency were (and still are) seen as crucial, but in the late 1990s companies were demanding more ‘speed’ – the ability to respond quickly, to increase flexibility, to customise products at the last moment, and to deliver more frequently. Many businesses, particularly in the fast moving consumer goods (FMCG) industry, invested in these areas in an attempt to be first in responsiveness and adopted the mantra of ‘responsiveness, flexibility and agility’. But there is an implicit danger in seeing responsiveness as a supply chain panacea to please customers.

What's new?: Professor Robert Austin, Harvard Business School

The future belongs to those who know how to create new things. I said this to a friend of mine, a world-class product development manager, and he had this to say: “That’s right! We’ve got to get manufacturing back in this country!” But that’s not what I mean by ‘new’. There is, of course, a sense in which a manufactured product – say, a new car rolling off an assembly line – is new. That particular car has not existed in the world before. But there is also a sense in which that car is not at all new. Before anyone performs the first operation involved in making a car on an assembly line, the car and the process for making it are completely pre-specified in exacting detail. If there is anything surprising about the car that results – if it is different from the product prespecification in any way – we have a phrase for that: we call it a ‘quality problem’.

There may be troubles ahead: Simon Tomlinson, The Logistics Business

Warehouse automation has been around for more than 40 years. So you would think it would be getting easier to get right – yet in reality it is often more difficult. It is not that modern automated warehouses don’t work, just that on average it is taking longer to get them working properly, during which time users suffer great inconvenience and stress, not to mention cost. These are multi million-pound projects which form the linchpin of UK logistics operations for many major organisations, delivering massive savings and customer service improvements over the old manual operations they replace. So why is it becoming increasingly difficult to successfully implement major warehouse automation projects in the UK? There is certainly more than anecdotal evidence that this is the case.

Tales of the unexpected: Simon Bragg, ARC Advisory Group

What if forecasts were 100% accurate, both in terms of the timing and quantity of customer orders? What if production adhered to its planned schedules and suppliers always delivered on time, in full, with the right paperwork? Then supply chain management would be trivially simple. The main issues would probably be supply chain design, perhaps execution automation, and some optimised routing and scheduling. In this nightmare scenario, supply chain management would be so trivial that most supply chain managers, consultants and analysts would be out of a job. Thankfully, forecasts are lucky or lousy, production always runs into unexpected problems, and suppliers are unreliable. It is, therefore, how uncertainty is managed that is the key supply chain problem. The challenge is to build a supply chain that is robust against demand, production and supply uncertainties.

Implementing mobile solutions: John Hookham, Adrelia

The first part of this article looked at choosing a mobile supply chain solution and the various hardware options for client-side applications together with the need – if indeed there is a need – for real-time data communications. This second part addresses security, server-side integration, whether there is any benefit in running a pilot project, ongoing deployment issues and the hard and soft business benefits. The conference room pilot has been a standard part of the ERP (enterprise resource planning) software selection and proof-of-concept process for many years. And many suppliers and purchasers apply this same approach to mobile solutions. However there is little, if any, value in piloting a mobile solution providing you take care when selecting the solution.

Into the unknown: John Hookham, Adrelia

For many service management companies and plant maintenance departments, the provision of handheld devices to mobile workers is seen as a cost-effective way of increasing their productivity and efficiency while improving overall service levels and meeting SLAs (service level agreements). The message is simple: you can use mobile technology to add to the bottom line by improving workflow and shortening the data feedback time. But for most organisations, mobile technology is an unknown entity. The IT department has often grown up with propriety hardware and software but has made the transition to standardsbased client/server or web-based enterprise applications. Connecting remote workers to central systems (other than via email) is new and different, and in many cases the IT department is not even clear on the questions to ask. In fact, there are two fundamental questions.

Good and bad complexity: Nick Toone, Arthur D Little

Dealing with organisational complexity has become an ever-increasing preoccupation for the boards of multinational corporations. One key to the success of the best companies is the way they deal with complexity. Some have realised that the complexity of a product or service offering is often a larger drag on profits and growth than any other single factor in a business. For others, complexity has driven outstanding market returns and prevented the entry of competitors. The most obvious sign of increasing complexity in business is an ever-broadening portfolio of products and services. Most multinationals face constantly changing customer requirements, globalisation and intensifying competition. This, coupled with a desire for growth, leads to a diversification and expansion of their product and service offerings, increased product customisation, multiple distribution channels and differentiated service bundles.

RFID comes of age: David Jacoby, Economic Intelligence Unit

Like many ‘hot’ technologies, radio frequency identification (RFID) has its supporters and opponents. The technology enthusiasts believe RFID will unlock a multitude of valuable applications, ranging from mundane but highly economical track-and-trace technologies in the supply chain, to cutting-edge uses in the healthcare, military and security sectors. On the other side of the debate, consumer privacy groups have campaigned strongly against a technology that could, they argue, allow unscrupulous companies to gather and misuse sensitive information about their customers. In reality, RFID is neither as powerful nor as dangerous as it is sometimes depicted – at least, not yet. What is already clear is that RFID can make many business transactions more convenient, improve product availability in stores, reduce fraud and theft, and help businesses run more efficiently. In short, it has the potential to make many things work a little bit better.

Breaking down the barriers to efficiency: Batey/Hoey/Evans, Capgemini

The drive to increase business efficiency is now a survival issue. Globalisation and internet commerce bring mounting competition from low-cost producers. Along with cost pressures, organisations face demands for improved customer service and reduced order-to-delivery lead times. To remain competitive, businesses must re-invent themselves radically and fast. The solution we advocate here is a ‘shared service’ approach, which redefines selected operations as a series of interconnected services to replace traditional independent functions. This approach is already well-established for back-office functions like procurement, but now it can be successfully applied also to front and middle-office functions.

A S&OP to success: Robin Goodfellow, MLG

We constantly hear stories that few companies are achieving their expected benefits when implementing supply chain IT systems. There can be many reasons for this which are well documented. But one possible problem is the lack of a sales & operations planning process. It is not the software that is important – it is the creation of an effective, efficient S&OP process, leading to a high-level monthly review and approval of the plans. First, a recent definition: sales & operations planning is a decision-making process to balance demand and supply, to align volume and mix, and to integrate financial and operating plans. It is essential that the top-level management of the business accept ownership of and responsibility for the S&OP process. It is their tool for steering the company to deliver the strategic objectives and business plan. They own the process, and are responsible for ensuring that it adds value to their business.

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