Technology and Supply Chain

Let’s face it. Technology can be a real pain in any business. That statement is coming from a 20+ year computer geek who really excels at technology and change. But the reason that I make that statement is because it is true.

No matter how nice technology is packaged, how good the training is, how many help files or how many free web sites you have, there is always a problem with technology which just doesn’t fit the mold of “do it yourself”. Technology and the change surrounding it is just complex.

So it is with supply chain systems. You purchase a product, you get someone to install it and try to explain to them how to configure it, but it never turns out correctly. Now you have to not only pay someone to print out the pick ticket, and manually check off on the list. Then they have to scan a UPC code which is half torn up, and wait for 30 seconds before moving to the next item. You are doing twice the work for little return on your dollar.

It is taking you twice as long to get the loads out the door; customers are calling about late deliveries; and you cannot figure out what button you need to press to get your screen out of the OSD window.

Sound familiar? Well you are not alone.

According to the Robbins-Gioia Survey in 2001:

  • 51 % viewed their ERP implementation as unsuccessful 
  • 46 % of the participants noted that while their organization had an ERP system in place, or was implementing a system, they did not feel their organization understood how to use the system to improve the way they conduct business.

 

Sure this is about ERP systems, but much of this has to deal with warehouse management and supply chain problems.

So what can you do?

For starters, don’t buy into the hype that some software package is going to change the bottom line of your business. It won’t.

People and people’s actions do have an impact on your bottom line.  Getting the computer to work well with real people can also impact the bottom line but nor more so than it improves the quality, consistancy and speed of the people in your business.

Computers (both software and hardware) should only be used in a company to support existing processes. They should enhance and make faster, things you are already doing. Technology for its own sake is just a waste of time and money.  Technology can slow a company down.

If you are going to bring a “consultant” into a project, (for this point a consultant could be an employee, software vendor, large firm or independent contractor) make sure they start with the process first. Process should be the first step to improving any results in your company.

The second step is to understand what “process rules” about the company cannot be broken. Some call these business rules.  If I am going to make a change, we are going to change a process. Like a good road map, knowing the process we are currently doing, and knowing the process we are want to be doing can help us navigate the path better and direct us on any detours.

Lastly make sure your consultant knows your processes (both old and new) before they start taking about software implementation. The best consultants are the ones experienced in the processes you need changed.

If you are going to change supply chain processes, you need a supply chain expert.  If you are going to improve AP, you need a bookkeeping or accounting expert.  However, if you are going to change the supply chain software, make sure your software expert knows supply chains.

In addition, experience should always precede cost in your consultant selection. It is true you can save a buck up front by taking your in-house PC repair person and turning them into a process engineer/analyst for this project, but I have usually found that you will pay that amount of money plus the amount you needed to spend in the first place when the inevitable problem arises.

Is it possible to find a software package and then get the processes worked around it? Yes, but only where there is a new company and we do not have migration from old processes to the new.  Everything is new, so processes can be written to form around the software.

In a greenfield enviroment though, make sure to review the processes after the actual processes are running to make sure the software stays in tune with the process changes which are inevitable.

Computers and technology do make the difference for some companies, but these are the companies who discover their existing processes through experienced consultants, then apply this knowledge to the computer implementation.