The interesting thing about both of these statements is not about the system but about the process.  Both have an underlying assumption that it is the system which has somehow changed, when it is just doing the process it was programmed to do, when implemented.

That doesn’t mean that the process hasn’t changed, but the system hasn’t changed with it.  The process may have gotten better or worse, but because it doesn’t implement our process, it is the system that is in question.

Just for the sake of clarity, I do have a WMS provider with whom I am engaged.  I don’t always see them as a solution, because sometimes the existing software they have just need to be modified to the current process.  (Note: I didn’t say better process here).  Sometimes this vendor does not do what the target process calls, and we need to use someone else.  All of this is okay.

Many times it is cheaper to have someone who understands systems and software evaluate the process and tune the system to match the company’s needs.

I have seen companies with a piece of software, which could track all the items they were keeping in Excel spreadsheets, but because they didn’t see the process change and didn’t know the software, were doing extra work.

So do you still want to consider replacing that system for more money than fixing the existing one?  This is okay, but how do you know you won’t be back to the same place next year?  Do you really know if your processes are good processes or if they are contributing to this bad feeling you have about the existing systems?  Will you solve anything?

I can help you by evaluating your process in terms of these systems.  If you are interested in a free initial discussion, please contact me.  I have been known to tell people they are on the right path and I don’t believe my services are necessary.  However, it may be that hiring me could save you hundreds of thousands of dollars in mistakes.

People, Process and Systems

People are the foundational cornerstone of business.  With good people comes good business.  With bad people comes bad business.  You cannot keep customers if your people do not treat the customers correctly and you cannot keep your people unless you treat them correctly.

People need processes to function.  They either develop these processes or the process was refined from someone before them.  When people own the process, you have pride of workmanship and job satisfaction.  People who have no process are doing nothing for your customers or you.  No matter how simple, if the people are doing work, they have a process.

If you have good processes, the people will be busy.  They will need tools to get the job done faster.  When you first started, everyone may have been able to use a pallet-jack, but then you moved up to fork-riders and maybe to fork-trucks.  Each different mechanical system has the benefit of making the job easier for your people.

However, if I have a pick/pack operation, placing everyone on a fork-truck may not be as efficient as a fork-rider.  Or if I am only moving pallets on and off trailers, a rider is not as quick or easy as a fork-truck.  Both systems, the fork-truck and rider, have different purposes.  I cannot look to load a trailer with a reach-truck, so there are even different systems that have been developed for high racking versus truck tendering within fork-truck systems.

Just like there are different mechanical systems, there are different software systems.  Knowing which system to use requires someone to understand the people and the process.  To shortcut this process is to have reach-truck operators moving off the reach-truck and onto a pallet-jack to complete the process.  This makes job satisfaction go down and decreases your efficiency, throughput and profit.

But unlike the trucks, riders and jacks of the mechanical systems, most, if not all, computer systems require customization or configuration to match the process.  Without understanding the process, you get to trial and error.  In some processes, like payroll, trial and error leads to big problems.

Lost goods, unreceived items, OS&D, late deliveries, supply chain problems, shortage of goods and mistakes are just some of the calamities that can be caused by choosing the wrong system and implementing it the wrong way.

The small investment up front to get things right can mean big savings and productivity enhancement.

Even if you have gone through that process before, the assumption that nothing has changed can be fatal.  Growing businesses change, and which that change comes process change.

I can help you by evaluating your process in terms of these systems.  If you are interested in a free initial discussion, please contact me.  I have been known to tell people they are on the right path and I don’t believe my services are necessary.  However, it may be that hiring me could save you hundreds of thousands of dollars in mistakes.

So what do taxes and computer systems have in common?  Well it is not that they are inevitable, because I have seen profitable companies that have very little in the way of corporate software and no, QuickBooks and Excel do not make a software solution.  Well we will discuss that answer in just a bit, but to the point….

So you are thinking that a new TMS or WMS system will improve your bottom line or increase your capacity, but what is it that you really need?  Are you looking to find that ultimate system which will keep your dock, accounting, warehousing, planners and sales people happy?  Are you really interested in the latest and greatest?  Do you need RFiD or even label tracking?

All those are interesting questions, but the real question is if I buy a software package, how do I get the most “bang for the buck”?

Software and computer systems are simply a tool to do the same process faster and more consistently.  Some software does better with certain processes than other software packages do.  Each one seems to have a specialty.

The key is to make sure the processes they are doing are the correct processes for your company.  If you have bad processes or have to change to a bad process, I can guarantee one thing.  The software will do that bad process more quickly and make sure the bad process is consistant.

To understand software, you have to understand processes.  There are no shortcuts.  By skipping the process evaluation, you may save on the short run, but pay in the long run.  Penny wise, and pound foolish.

Just like you have processes in your business, software acquisition is equally and important process.  

So what is the relationship between taxes and computer systems?  Well the fact of doing things in the right order.  If I fill out my tax forms as I see fit, the government will not agree with me.  I cannot just place any number in any box, perform math by the numbers that I want, or skip steps in preparing my tax forms.  So for our businesses, we hire professionals to make sure that we do it right.  If we fail to perform it correctly, the government makes sure to separate us from even more of our hard earned cash.

It is the same way with computer systems, but computer systems have the benefit of a higher return for our diligence.  If we do the process correctly, we gain by not having costs for failed systems down the road.  We ensure our success.  We insure that the extra expense of that fancy system is justified for our processes and will work with our people.  We insure profitablity.

If you are interested in a free initial discussion, please contact me.  I have been known to tell people they are on the right path and I don’t believe my services are necessary.  However, it may be that hiring me could save you hundreds of thousands of dollars in mistakes.

Taking the time up front to evaluate software and understand the impacts upon the organization is a critical piece of the puzzle.  Before purchasing the software, one can save time, money and headaches by understanding processes of the organization.

Change is about travel.  You are going from where you are to some place new.  Understanding your destination, your goals for the travel and your path help to form the basis of the voyage.  The purchase of software is not a destination but a vehicle for the change.

You would not purchase a jet airplane to take you 30 miles to work each day.  Nor would you buy a Toyota Prius to travel 1000 miles to work each day.  Neither makes sense based on the voyage that is needed.

Buying software without the understanding of the process changes within the organization limits your ability to use the vehicle properly.  The problem occurs because most software companies want to sell you the vehicle and HOPE you know how to drive it after their limited training programs.

Sure you could hire one of the big consulting firms to work with your company into fitting the round peg into a square hole, but I have a better idea.

Why not get someone into your company, who understands the best practices of the industry.  Someone who can help you get the processes documented and business alligned.  Someone who can help lay out the path to a successful voyage.

Software Migration can mean huge profit potential for some companies but only if you know your path, know your vehicle and making sure it has that bike rack for the last leg of the trip.

Spending 10% of the cost of your software on some pre-process review could save you time and money in the long run.

If you are interested in doing process reviews, software evaluations or implementations, contact me via the “Contact Us” link at the top of the page.  We would love to help you be profitable.

There are things I like about this, mostly from a marketing aspect, but then the reality sets in that this isn’t really a news item, but a marketing method. There is an element of news. As Malcolm Muggeridge states, “News is just old things happening to new people.” A company buying a software package to help their business is not so much news because there is nothing new about it. It is news to the companies involved, but that is about all it is….but that is not the real topic.

On another rabbit trail, but coming back to the main point, I love to take advertisements and pluck them apart. Mostly I look for the humorous fallacies that the advertiser tries to create to sell a product. It is in this mode, that I take one of these cheesy news articles and pluck it apart to not show the problems that exist in the logistics IT space. One of my favorite classes in college was a study in advertising where we did just this. We were told to watch TV for advertisements, write down the copy as best we could (oh what a boon a DVR would have been back then, but VCRs were just becoming vogue).

The “news” article is titled “Total Logistic Control Selects RedPrairie Warehouse Management” was published by Business Wire. That title by itself makes this little feux article a tune-out-item for most people. Unless you deal with Total Logistics Control, compete against TLC, or are interested in RedPrairie, the title of the article is not what this article should be about. This is not the fault of either of these companies, but the ad editor for picking such a non-descript title. My guess is that Business Wire fell down on the job here.

A better title for this article would be, “Another company making technology decision to fix business process problems”, but that wouldn’t sound like news either. It wouldn’t have helped either company, but it would be closer to a true news title. It would be better if the writer on this acted as a journalist, learned something about the decision, evaluated this with an expert, and shown the overwhelming ways in which companies waste money in an attempt to save money. I am not saying I would make a great editor, I wouldn’t. Truth gets in the way of selling journalism.

Let me be clear, RedPrairie is some very good, expensive software. I would not place them in the “excellent for 3PL business” category, but I would put them in the “excellent in general logistics” category. If RedPrairie were more affordable, I may lose my system agnostic position, and go over to them as a RedPrairie consultant. However, the same can be said for I2 or SAP if the implementation price were better. This is not to say, they are not valid candidates for implementation. For some companies dealing, they are perfect fit because they align better with the company’s process. More on this topic later.

The fourth paragraph tells a good part of the story:

“We saw our market changing. Customer requirements were becoming more complex and we needed to align ourselves with the technology to meet that change. The RedPrairie solutions will help us provide more value to our customers, such as continuous improvement in facilities where we operate, and driving out cost of ownership and operation,” continued (Pete) Westermann (President, TLC).”

I agree, the market in the logistics area is rapidly changing, and most of that is dealing with costs. We have been able to get by without strong processes in this industry for decades, and now it is catching up.

In order to stay competitive, every company is looking for that unique service/product for their customer. They are trying to differentiate themselves by any and all means possible. For many companies, this means everything right down to the delivery and packaging they place on their product. Some are going fancier, and others are looking to reduce costs. Each of these changes causes problems in logistics, because lower cost packaging posses transportation problems, as does the presentation of custom packaging on the other end of the scale.

The next phrase is the problem phrase, “we needed to align ourselves with the technology to meet that change”. Ouch. Well I hope that you do gain something from the project, but this is not the correct approach. We should be seeking to align ourselves with a better process to meet the change and align technology to meet the process changes.

This is the magic pill. The magic pill is that pill that if we just swallow it, will heal all our aliments. It may be a huge horse pill, and may take gallons of water to swallow it, but we can do it. It may be so big, that it kills the patient, but it is a magic pill. Technology is often marketed as the magic pill.

If you are looking to save money in the logistics arena, first look at processes, then find the technology solutions which match that process. Software is not very good at “continuous improvement”, “driving out costs of ownership or operations”. People are good at these things. If Henry Ford proved one thing, it was people need processes that help them be efficient and consistent. Then, and only then, do you identify technology which automates the process, making things more consistent and faster.

Let me say this again, technology makes processes more consistent and faster. If I implement technology over the top of bad processes, I only have more consistent bad things occurring at a faster rate. I frustrate my people and cause problems for my customers. Like I tell my kids, “You can have a good day or a bad day. It is your choice. I will help you with either direction you wish to take. If you want a bad day, then let’s make it a bad day, but if you want it a good day, choose that, and I will help you make it good.” This is exactly the same with technology. Your processes make or break your company. Which direction you choose is your choice. Technology will help you in either direction. If you want to lose money, let your processes run free and try to shove technology on top of it. If you want to make money, control your processes and place technology on top to control it and speed it up.

I am not saying that TLC didn’t do this, but this is not the message given to the president of the company. If the guy on top doesn’t understand this, the message failed in transit. If TLC evaluated their processes and found that RedPrairie is easier to customize than a less costly player like DaVinci (who focus on the 3PL market), then this is great. However, this isn’t the message given to the world through this news article

In fact, there is not much in this “news article” to really give you an idea of the true path the company is taking. It could be they are doing the right thing, have evaluated their process and chose the software to enhance these processes, but then, someone should tell the president and the writer. If this is the case, they missed the point. If this is the case, TLC competitors should be concerned because TLC is going to be better competition because of this process alignment. However, the article does say this.

I wish them good luck, and when they decide to fix the processes, and implement RedPrairie correctly, I do hope they call me. Until then, we can all learn from this. We can benefit by those publishing feux news articles about software purchases.

As they state, customers are unhappy, Oracle (SAP’s predominate DB platform) is unhappy, I2 is now unhappy with them, investors are unhappy and the company is now doing something which has never occurred.  It is promoting a Salesman to the CEO slot.  Prior to this the CEO always had a software engineering background, keeping the software company very technical.

A sales person at the helm may do the company good, and give a much needed appreciation in the ranks for the plight of their customers.  SAP is known for its multi-year implementations.  In my opinion is due in part because most companies do have a handle on their processes and sometimes make them needlessly complex, but also because the software tries to be everything to everyone through heavy customization.

This customization is at the core of the BusinessByDesign product’s problems which has been starting in fits for years now.  The concept is great and would allow smaller companies to leverage the power of the software, but small businesses cannot deal with bugs like larger companies.

Having been in the IT industry for years, I know people who both swear by SAP software and those who swear at it.  Those who love it, like the orderliness of data and interfaces.  Those who do not, struggle with their own processes and the time and money it takes to implement the product.

By its very nature, SAP is a traditional consultants dream.  Not only is there money in the process documentation aspect, but the process reorder, the software customization, the vendor integration, the data mining, the training and the implementation.  All of these add up to a large quantity of billable hours.

But like most software, don’t be a sap about SAP.  Do not just put SAP into your company just because it is the biggest in the industry or because their demonstration is so nice.  There are many players out there.  If your company has SAP, I do know some people who can help you short circuit the implementation time.  Of course, they will need your permission to shake some things up in your company.  Some of the best people you need are not SAP converts but software agnostic people who know not only software, but also proper process.

If you are going to put SAP into a company, do it because after you are finished, you will have a product that matches your business process.  You will have invested in a very solid way, in business process models that sustain your current and future process.  Yes, you will need to maintain these processes and the interface to the software, but you will know that these processes are being achieved with reduced management.

Is there real money to be had by seeing your process from end to end… yes.  But SAP is not the only ERP solution in the marketplace.  Sometimes, companies don’t need ERP as much as they need transparent processes.

Sometimes you need to just scrap “the way we always have done it” for the better way.  Sometimes you need to change the staff to find people who are not as interested in keeping that Excel bookkeeping because they might lose their job if they do, for someone who are a team player.

Bottom line, right now, I would stay clear of SAP.  They are a bit distracted right now, and any phrase like “substantial recurring maintenance services revenue” which IBD commented about SAP should raise some red flags about what kind of recurring maintenance services are needed for this software we are considering.

Having the right kind of sales person in this tight logistics time frame could be one of the most important reasons why some companies will succeed and some will fail.

While changing your sales staff can be a hard thing, by identifying the strengths of your sales people, you will be not only improving your own sales, but improving the lives of the sales people who go to a company which can use their type of talent.

However, now days, it is not about selling wheels but buying them…

ABI Research, headquartered in Oyster Bay, N.Y., has announced that it expects the worldwide RFID market—sales of RFID hardware, software and services—will have a compound annual growth rate of about 15 percent from now until 2013, with annual revenue reaching $9.7 billion by that year. ABI’s research director, Michael Liard, believes the RFID market is growing robustly, across all product categories of RFID technology.

Really….

15% over 5 years works out to be 3% growth. 3% is not much more than the growth of the supply chain. One might even argue that this is falling back instead of gaining ground. So, what is the issue with RFID? Does it make sense?

What is RFID?

Unless you have been living under a Rock, most people have heard of RFID.  RFID has many different variants, and rather than go through all of them here, I will refer you to Wikipedia article on RFID. Suffice to say, RFID has some cool possibilities for tracking items in a warehouse, and possibly identifying lots and product details without having to go to a database to retrieve the item information.

By eliminating the need to lookup product, applications exists where systems can be down or purposefully missing. This reduces the need to have warehouses wired, which can make for very flexible storage. It would be possible with RFID to setup up temporary tents for peak volume, and still accurately track the inventory.

These kinds of advancements will take some changes to the software vendor’s code, or additional applications. Many of the mainstream WMS systems use telnet over the wire for truck mount and handheld scanners. These systems do have issues when the telnet server is not available. Having a separate application which could process warehouse instructions without a wireless connection has good applications.

Where RFID makes sense

RFID does make sense for some areas, such as closed loop supply chains. The biggest reason for this is the cost of the tag. Until polymer semi-conductor tags become a reality, the cost of producing a tag adds cost to the overall logistics of the item. Because of that cost, the ability to recycle these tags is important. A closed loop supply chain handles this real well.

Polymer tags are tags that can be printing much like a regular barcode label. The development of this type of tag may mean that the cost of the tag becomes effectively a penny more than the cost of a label today. If this type of technology sees the light of day, RFID may just be able to break that rate of growth in the industry and become mainstream technology. Until then the cost of the tag

Active RFID makes sense in areas where monitoring of the product is important. Some tags have the ability to perform temperature logging so that the temperature of the product is recorded and maintained. Active tags also have the advantage of faster turn-around and the ability to transmit farther. This gives companies the ability to ping the warehouse and check inventory with static mount antennas. Rumor has it that some are actually working on Cartesian coordinate location based on the ping.

RFID also make sense for manifest-less receiving. Because of the nature of RFID tags, and their ability to retain additional data about the product they are tracking, RFID tags can work to eliminate manifests. A simple sweep of the truck will indicate correct product. To date, I have yet to see software written for this purpose. The biggest reason is one of control. If I ping one dock door, who is to say the next staging area doesn’t also reply. In theory it is possible.

RFID also helps with shipment integrity. In the USA, with the shortage of good labor, having RFID tags can improve the quality of outbound loads and inbound scanning. It is my opinion that Wal-Mart made a perfect case for that by their RFID initiative. Wal-Mart implemented RFID, and charges suppliers that fail to have these tags a processing fee. This fee in effect covers the labor and tag cost to implement these

Technology issues with RFID

RFID does have some technology challenges.

First is the extra cost of the RFID gun. Even if the company can completely move over to RFID in their supply chain, they still will need guns that have both scanners and RFID readers. Passive guns do have additional power requirements necessary to generate the RF “volume” great enough to trigger the tag. This additional power requirement limits the battery length and number of cycles to run the handheld guns. Truck mount equipment tied to the main electrical system does work well in this area, but for pick-pack operations, this places a tether on the worker.

Further, while active and semi-passive tags do not have latency issues, passive tags do. The latency comes about because the tag must power up, read its data, then “transmit” back. All this takes time. The amount of time this takes may not be long on a single transaction, but if you look at 1 million clicks at 1ms apiece, this is 27 hours of labor. 1ms is a low latency.

Next big issue comes because while most systems handle the unique tag of RFID, most systems do not support the additional data on the RFID tag. So even if you could get a good process of programming the tag, and getting good data on the tag, getting the data out of the tag, is just as big of a problem for most software systems. Many WMS systems are starting to come around, but this usually requires different programs and processes for your IT staff to support.

Telnet sessions for WMS made sense because the telnet process meant programming an application which could manage all the guns at one time, and concurrency. Concurrency comes in because most directed pick/put away systems need to control the single transaction. If I have a directive to pick an item for a staging, I need to make sure I am not giving that directive to two drivers. By making the gun run its own copy of the application, WMS providers must have some process or safeguards so that no transaction has two clients.

Process Issues with RFID

RFID has issues due to proximity. If I “scan” a tag, there is always the problem of getting the correct tag. Proximity can be controlled by the type of tag and its properties, but two tags, on two pallets sitting side by side, can eliminate this for most. Therefore, you have to get into scanning after pickup. This works by not triggering the scan until the truck has picked the pallet and is in the isle. Delay from the wrong pallet does occur, and operators are still required to pick based on sight, not a tag.

RFID still requires some other form of pallet ID if the tag stops functioning. While the QC on tags is very good, the likelihood they will get damaged, fall off or crushed is very real. This additional paper or label requires additional time and resources. Making sure these two are in sync adds time.

It is also possible that if two tags fall off, to get the tags switched. QC control becomes a real issue to make sure the tags are correctly placed.

Recycling the tags takes time, effort and expense.

Is there real growth?

It is my opinion that RFID is a niche solution at best. 3% growth is not growth. This growth is going to continue to be hampered by technology and process issues that need to be resolved. Until these are better resolved, WMS systems may never fully support them.

Do they know their stuff, or are they just stuffing their incompetence?

Within the last couple of months, I had the opportunity to evaluate a consulting house, who was trying to sell into the Supply Chain arena. I had dealt with the company before in another capacity for some IT needs at a different company. The people they had brought to us were competent. In some of the areas, they were brilliant.

However, I had a new client and by coincidence, this company had a shot at presenting to this new young company, their expertise in the Supply Chain market. I was not aware that they dealt in Supply Chain, so a real Supply Chain expert and myself had the opportunity to ask some questions after their presentation to us. Their prices were very good, but they had the tag of monthly/yearly support which seemed high.

The conversation was great for about 45 minutes. For 45 minutes, I was coming closer and closer to acquiescing to their skill set and that indeed, they had the skills.

However, the Supply Chain guy I was with started to dig. And dig he did. Fifteen minutes later, I saw the chink in their armor and bam… I had realized what they were doing.

This company did have some Supply Chain expertise, but not enough to consult in this area. To correctly phrase what they could do is to say that they could install and support and a specific software product for Small Package Distribution companies.

It was this product that they were selling to a 3PL business with very different characteristics. If this young company had gone with them, there would have been project after project after project, until the well dried up. This firm was looking for the residuals and trying to sell a specific item, to get these. This firm was trying to convince this young company of a one size fits all approach. That is why their costs were so low.

So the moral of the story is….

Make sure that the person who you are hiring has adequate experience in your sector. If you don’t feel confident in knowing this, find the guy whom everyone in the industry considers the expert. Have that person come in just to evaluate who you are going to hire.

Don’t just look for experience in your specific area, but look for general experience and how successful they are.  With the breadth of process involvement that I have and the project management background, I know that I can pick up even the most complex processes quickly and troubleshoot them.  Not because I know the specifics now, but because my skill set in the fundamentals is do deep.

The $10K you spend on that heavyweight for 4 hours may save you hundreds of thousands of dollars in the long run.

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: