Supply Chain Synchronization

Google's chief economist, Hal Varian, on how the web challenges managers

Google's chief economist, Hal Varian, "compares the current period to previous times of industrialization when new technologies combined to create ever more complex and valuable systems—and thus reshaped the economy." In a recent interview with McKinsey, he shares some of his insights.

Varian's ideas are organized in six main groups:

1. Flexible innovation
2. Corporations and work
3. Free goods and value
4. Workers and managers
5. Computer monitoring and risks
6. Reshaping industries

Varian discusses how networked digital technology should improve the way we work and increase productivity. In addition to personalization of data and better user interfaces, Varian emphasizes the importance of making sure that the data gets to all of the necessary players so that they can make timely and well-informed decisions. He also notes that since computers can monitor transactions, companies can make sure that transactions are carried out in the way intended.

At Evavi, we take this one step further with what we call "intelligent transactions." Rather than simply monitoring transactions and then correcting them, we seemlessly combine planning/decision support with execution/transactions so that supply chains operate optimally with transactions that are intelligently planned before they are executed. By eliminating the disconnect between planning and execution, the focus shifts from monitoring transactions to compressing the cadence of the supply chain with perfect orders.

You can view the interview here or read the transcript here.

Getting supply chain software right

With global markets charting uncertain territory and the economy shrouded in uncertainty, the conditions are ripe for companies to closely examine their supply chains to find areas for improvement. “Getting supply chain software right,” from The McKinsey Quarterly, offers some useful insight for those wanting a solid introduction to key supply chain concepts and to how software can help in this domain. Here are some excerpts:

“An urgent need to improve supply chain management can arise when product margins shrink, demand drops, customers ask vendors to manage inventory for them, or new products are introduced. … Because the costs of managing the supply chain — inventory, the warehouse and distribution center, and freight — can represent 10 to 15 percent of sales in most industries, the savings that effective supply chains bring have a genuine impact.

“…A supply chain, simply stated, comprises the flow of a company’s products, information about them, and the money that changes hands between the company and its suppliers and customers. When a company manages the processes that support these flows well, it can fill orders from customers quickly yet keep its inventory to a bare minimum. When it doesn’t, the supply chain breaks down. Customers place orders but hear that the products are out of stock, even when they might be available somewhere in the company. Raw materials fail to show up on loading docks, and shipments to customers arrive late. Factories run below capacity because customers cancel their orders. The result can be a quick drop in sales, lost margins, and inventory write-offs.

“…Managers often focus on automating transactions, something that might be important but typically fails to extract the greatest value from supply-chain-management software. The greatest value tends to come from harnessing its ability to improve decisions — how much of what product should be shipped to which warehouse, for example — by making forecasts more precise. Since decision support affects inventory turns and customer-service levels (avoiding stock-outs, for example), improving it has more impact than, say, migrating an order process from telephones or fax machines to computer systems, a change that at best reduces head counts.

“…The promise of real benefits rests on the potential for seamlessly integrating data flows and work processes across entire enterprises and even industries.  The primary benefits will come from their ability to speed up the flow of information and to make it available more widely — which alone can produce gains large enough to justify big investments.

“…When supply-chain-management software works, it can help cut inventory levels, improve delivery schedules, and ensure that supply meets demand—all of which should make customers more satisfied.

“…The performance of supply chain software depends not just on its features and quality but also on the way people use it. This is particularly true of forecasting and inventory planning solutions. Four guiding principles to consider when implementing supply chain software:

        1) fix only important broken processes
        2) promise only what you can deliver
        3) improve training
        4) make people accountable                     

“…The greatest improvements in supply chain management occurred when companies both improved their processes and correctly installed and used the software.”

Read the complete article here

Evavi Fabric delivers the flexibility required for dynamic supply chains

During the past several weeks I've had the opportunity to take a deep dive with one of our clients into Evavi Fabric™. This client has been evaluating the difference between rigid packaged applications and custom software development to meet some supply chain needs.

Fabric is the planning and execution platform that the technology team at Evavi developed to power every Evavi solution. It includes common data models to enable the highest levels of synchronization and optimization across an extended supply chain.

Supply chain-centric businesses often need to support customer-specific processes that can not be supported by cookie-cutter ‘standard’ software applications. The attempts to customize one-size-fits-all solutions often result in ballooning IT spend, long implementation cycles, and costly maintenance.

Evavi Fabric™ is at the leading edge of a new approach to solve these problems, and the ideal platform for building synchronized supply chain applications. Fabric™ is a multi-company, multi-tenant SOA-based platform that leverages extensible business models and is packaged with proven reusable patterns and software components essential for today’s supply chain applications. Core components include: configurable business process engine, dynamic rules engine, personalization-ready portal, framework for user-level and data-level security, meta-tags, bookmarks, pro-active alerts, data synchronization components, and more.

Fabric™ enables Evavi to help clients realize measurable value and implement solutions the right way – collaboratively define requirements that precisely meet the clients’ needs; translate and render these requirements using Evavi Fabric™ solution patterns; and use a spiral tailoring approach to
configure the required functionality. This ensures that the production solution precisely meets the needs of the client, while the underlying technology helps protect their ongoing investment and reduces the total cost of ownership.

The Future of Enterprise Software

Wharton management professor Saikat Chaudhuri recently interviewed president and CEO of SAP Americas Bill McDermott for his views on where enterprise software is heading.

One clear theme emerged: that while legacy enterprise solutions were often helpful executing transactions, amassing lots of information, and then providing basic access to it, the future belongs to solutions that enable users to use the information effectively by synchronizing the execution of transactions with decision support (at Evavi we call this intelligent transactions, and is why our common platform embeds exception and alert management and performance measurement natively into every solution). The enablement of this capability helps companies to close the gap between planning and execution.

McDermott, obviously, believes that SAP will be the winner in this space. He states that "the number-one competitive advantage for SAP over a company like Oracle is integration. Companies like Oracle have to interface things and deal with very complex implementations because none of that has been engineered by design, and there may be different pieces of different acquisitions all in the same solution, and customers really have to navigate through that. It's very costly to do that for the customer. It's very risky to do that for the customer... Oracle, as an example, has acquired all their growth. Unfortunately for the customer, none of that has been integrated on a common platform."

While the importance of a common platform should not be underestimated, even more important is that enterprise solutions must also have common data models in order to achieve the fullest level of business process synchronization. This is one of the areas that all of the legacy software vendors will have difficulty matching the capabilities of the new enterprise software companies that are innovating in this area. The cost to deploy, run, and maintain these new solutions is much, much less than the legacy solutions.

ABC: An Introduction to Supply Chain Management - What is the goal of supply chain management software?

What is the goal of installing supply chain management software? Ben Worthen at CIO Magazine answers this questions and others in his ABC: An Introduction to Supply Chain Management which is a compilation of SCM basics.

Worthen provides the following as a way of describing the goal of installing supply chain management software: “Before the Internet came along, the aspirations of supply chain software devotees were limited to improving their ability to predict demand from customers and make their own supply chains run more smoothly. But the cheap, ubiquitous nature of the Internet, along with its simple, universally accepted communication standards have thrown things wide open. Now, you can connect your supply chain with the supply chains of your suppliers and customers together in a single vast network that optimizes costs and opportunities for everyone involved. … The goal of these projects is greater supply chain visibility. … The payoff of timely and accurate supply chain information is the ability to make or ship only as much of a product as there is a market for. This is the practice known as just-in-time manufacturing, and it allows companies to reduce the amount of inventory that they keep. This can cut costs substantially, since you no longer need to pay to produce and store excess goods.”

As companies become more and more sophisticated about supply chain practices, they begin to focus not just on visibility and cost reduction, but transforming business processes across their supply chain with Supply Chain Synchronization so that they can create entirely new service offerings that meet the diverse needs of their customers. To do this requires support for intelligent transactions that synchronize planning with execution, and guide constituents towards the most value-added activity.

Evavi Innovation

Overview
We set out with an audacious vision – to reinvent enterprise supply chain management. We have built from scratch a synchronized enterprise supply chain suite that uses only the best internet-native technologies and leverages the knowledge gained from the evolution of supply chain management since the late ‘80s.

The solutions we are delivering are based on more than six years of development by some of the most creative minds in the supply chain business. Members of this team helped define the supply chain software industry in the late ‘80s and early ’90s with their pioneering work in the areas of in-memory optimization and planning. The supply chain software they architected during that time generated over $800 million in sales, generated billions in supply chain value, and launched the industry.

Supply Chain Software Reinvented
Evavi’s Supply Chain Synchronization solutions are the first to be entirely developed and delivered with Internet-native technologies. Built into the entire solution suite from the core are a planning and execution platform, flexible models, rapid extensibility, open integration, performance measurement, exception and alert management, role-based workflows, and consumer-Web usability with personalization at the fingertips of each end-user.