Supply Chain Synchronization

New technologies and technology adoption is setting the stage for novel business models

Jacques Bughin, Angela Hung Byers, and Michael Chui of McKinsey have recently posted an article reminding us that "The history of recession is also the story of technology advances that overturned the existing competitive order."

While we have all been working through the worst recession in 60 years, it is during this time that the seeds are being sown that will create new winners in the "new normal" economy. Bughin, Byers, and Chui write: "Though companies are tempted during a downturn to manage for survival, recessions in fact reveal periods when the competitive pecking order changes dramatically. Research by our colleagues shows that nearly 40 percent of leading US industrial companies tumbled from the top quartile of their sectors during the 2000–01 recession....In the here and now, new technologies and technology adoption is setting the stage for novel business models that portend disruptions as great as those of past downturns."

For those working in the supply chain space, the recession has naturally brought renewed focus on reducing inventory, eliminating obsolescence, and increasing inventory turns. Those companies that are also reevaluating their supply chains to enable new business models and create new areas of value will be strongly positioned to disrupt their industries. The challenge, of course, is to focus on cost reduction while simultaneously making strategic investments that will generate revenue from new services and offerings.

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.

Building the Web 2.0 Enterprise

Although the Web bubble burst back in 2000, if anything its impact on our lives and on business was underestimated. The financial models clearly didn’t support the sky-high valuations, but the underlying technology continues to transform our lives and our economy in hugely significant ways.

As Building the Web 2.0 Enterprise demonstrates, one of the biggest inhibitors to more rapid progress in the enterprise includes “management’s inability to grasp their potential financial returns, unresponsive corporate cultures, and less-than-enthusiastic leadership.” The next generation of employees are moving into the workforce, and these technologies will find their way into the enterprise with them in spite of lethargic management.

Here is the abstract to McKinsey’s global survey results on this subject:

“- Companies have adopted more Web 2.0 tools this year than in 2007 and are using them for higher-value purposes, according to McKinsey’s second annual survey on the business use of Web 2.0 technologies.
- Some 21 percent of the respondents are very satisfied with the way their companies use Web 2.0 tools, which are changing management practices and even organizational structures.
- Other companies report that the barriers to adopting Web 2.0 tools include management’s inability to grasp their potential financial returns, unresponsive corporate cultures, and less-than-enthusiastic leadership.”

The complete article can be read 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.

ABC: An Introduction to Supply Chain Management - What are some emerging technologies that will affect the Supply Chain?

I often recommend the introduction that Ben Worthen at CIO Magazine has compiled -- ABC: An Introduction to Supply Chain Management -- as a good place to get a very quick, high-level introduction to some basic supply chain management concepts.

For those wanting some insight into what is coming next, Worthen asks and answers this question: What are some emerging technologies that will affect the Supply Chain?

Worthen identifies Radio Frequency Identification, or RFID, as an important emerging technology that will affect the supply chain. “RFID tags are essentially barcodes on steroids. Whereas barcodes only identify the product, RFID tags can tell what the product is, where it has been, when it expires, whatever information someone wishes to program it with. RFID technology is going to generate mountains of data about the location of pallets, cases, cartons, totes and individual products in the supply chain. It's going to produce oceans of information about when and where merchandise is manufactured, picked, packed and shipped. It's going to create rivers of numbers telling retailers about the expiration dates of their perishable items—numbers that will have to be stored, transmitted in real-time and shared with warehouse management, inventory management, financial and other enterprise systems. In other words, it is going to have a really big impact.”

There is little question that RFID will have an huge impact on supply chains, but there is still a long way to go before it becomes a driving force in most supply chains. There are several obstacles including cost, lack of standards, and simple reliability. One client that I work with uses RFID for a very small amount of their products. The read rate is unacceptably low and the value created is questionable. Ultimately these problems will be overcome, but for now this is still an evolving technology. What is important is that the supply chain software you implement today needs to be capable of handling the enormous amounts of granular data that will ultimately need to be handled when RFID does hit the mainstream.

The emerging technology that is having the greatest impact on supply chains today is the Internet. For about eight years the providers of legacy supply chain software have been web-enabling their solutions. However, the transformative change is coming from a new breed of innovative software firms that are developing Internet-native supply chain applications that are fundamentally changing the game. These firms are building their solutions from the ground up to eliminate latencies, enable real-time transactions, and to couple planning with execution across the extended supply chain. Legacy solutions that are web-enabled are inherently hobbled in their attempt to participate in the supply chains driving real-time commerce. The supply chain industry has never been more dynamic and filled with opportunity. For those willing to innovate with new supply chain technologies, big opportunities for unlocking value exist.

Evavi Technology Innovations

Planning and Execution Platform
The solution unifies planning and execution business processes that traverse traditional functional boundaries, and provides real-time information by eliminating legacy data silos.

Common Data Models
Comprehensive set of meta-data models that enable real-time sharing of information between business processes.

Flexible & Extensible Models
The solution is built on models that are flexible enough to capture those elements that differentiate your business and can accommodate rapidly changing business needs.

Configurable Business Processes
Integral business process engine to configure your business workflows requirements without requiring changes to the code.

Rapid Extensibility
You can rapidly configure and extend the solution to fit your unique requirements without incurring punitive costs or risks.

Open Integration
The solution easily connects to legacy and other disparate data sources within your four walls and throughout the extended enterprise.

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.