Dave Ramsey is coming out with a new book soon about Leadership.  In this book, he has announced his concept that all business is small business.  At first, the realist in me sees that statement as false.  However, there is a sliver of truth to the statement even if it is not a “real” statement.

For me, a “real” statement is one that is born out of what we like to call reality.  While I would love to get philosophical about what is real and what isn’t , we will use a working definition of “real” to mean in this case, the current attitudes and actions of business dealing with one another.

The problem is, that while ALL business SHOULD BE small business, the larger corporations don’t like playing that way.  Once you get to be real big, a fear is created by believing the business may shrink.  If it shrinks, it may not be large and the advantage to a large corporation is that the number of competitors is less in their space.  However, being a realist, I realize that the pie is not limited, and this fear of becoming small is the very reason that most of these companies will be small again some day.  For example, consider Novell who was once larger than Microsoft.

The reality of business is it being about people.  While there are large people and small people, people are people and business is about that person to person relationship.  It is true that larger people, such as my father, were always good sales people because when he stated something with conviction, you listened.  You don’t argue with the big guy.  As least to this once small son of my father it was that way.

But the fundamentals of business are people.  One-on-one interactions with people are the game.  You cannot get smaller that one person and the decision is never far from just one person.  Every company has that one person with whom the final buck stops.

Large companies try to change that dynamic as much as they like, but sale by sale, unit by unit, brick by brick, all business is still conducted at the small level of the person eventually.  I might need to go through a committee to get the one person to sign the PO, but it still comes down to one person.

So in part, yes, all business is small business, but I am sure that Microsoft or Apple will never fully appreciate that nuance, because they are fundamentally afraid of being small again.  Maybe not the company directly, but the shareholders and the board defiantly have that fear.  If they didn’t we wouldn’t have them making decisions based on the short term, like locking people out of their products.

So for now, the small business of Microsoft or Apple will keep trying to insulate themselves by doing what a puffer fish does when it is afraid…make itself look big.  Someday, these companies will be small again and have to learn all over again that the question is not the next greatest product, but how you treat each person.

PS There is another facet of the large/small business based on transaction volume.  However, I know companies that deal in billions of dollars with a fairly small staff.

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It is about time, however, from a very greedy source.  Intuit has finally unleashed the credit card swipe ability for the IPhone.

This will really help allot of people, until they realize what Intuit’s practices are as far as a gateway.  And if you already have a gateway, for now, you need to use Intuit.

I am sure that mophie is going to have some arrangement with Intuit, but this is the start of good things….

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Many companies question existing software.  ”This software was written on and old XXXXX system and still works today, but we are not sure if we couldn’t get more out of a new system?” some say.  Or more likely, “We have this system and it is just not doing what we need.”

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.

Tags:   process · software · systemsNo Comments.

If I were to pick out the one concept that most companies fail to understand, it is the three cornerstones of a business.  Sure the foundation is built on the customers, and sales are built on good customers, but like all good structures, the foundation is only as good as the cornerstones.

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.

Tags:   pallet · people · process · systems · warehousingNo Comments.

Tags:   purchase · software · systems · taxesNo Comments.

In the purchase of new software one of the key issues that companies face ensuring the money they are going to spend will work for them.  Many companies find a software package they would like, purchase the software, and wonder why installation/adoption of the software does not go well.

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.  We would love to help you be profitable.

Tags:   change · softwareNo Comments.

First, let me say that I find “news marketing” kind of cheesy. A company makes a sale to a customer, and publishes it as “news” by providing small quotes, and then giving details of the company sold and themselves. Usually there are some key phrases and buzz words in the article to get the attention of people and to advertise in a news space. If you are going to advertise, advertise.

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.

Tags:   I2 · process · RedPrairie · SAPNo Comments.

With the recent report of rail facing a meltdown, supply chain professionals have to look into the systems and processes to bring the needed materials into their shop floor and eventually to the end-customer.

A properly design system has the ability to take these types of problems in stride.  A properly designed system would be able to take additional time into consideration and factor this into the logistics process.

Rail happens to be a very effective way to move large quantities of items from one coast to another.  Unless the quantity is large, or the weight is excessive, moving things a short distance via rail is not effective from a time or cost perspective.  Having said that, intermodal solutions have been effective solutions and rail intermodal solutions have saved dollars for items which are not time sensitive.

Trucking items is fast but with the price of gas and the shortage of equipment, costs are rising.  Trucks also have a weight and time limitation imposed by state and federal mandates.

Air freight is very fast but weight is a large factor here as it increases the cost.

Ships are very effective as long as the port to port makes sense.  However, going cross continent can be very costly.

So what is needed by most companies is an effective TMS system which can analyze the cost differences and pick the best routing.  By choosing the correct routing, this allows the supply chain to adjust to changes in the cost, timing and reliability of each of the different modes of transportation.

Many consultants are trying to improve their clients supply chain by beating up on transportation vendors, but this should not be the target. Carriers are in the driver seat right now, and customers of these services need to make sure that they are choosing the best, most efficient loads before committing to equipment.

Managing your loads with a manual system or with a TMS system which is ineffective will cause you to plan loads which are ineffective. These ineffective loads are not only going to impact your margins, but impact your reputation.

As always, with all these things, there are opportunities to improve your costs, improve your revenue and meet your customer’s delivery expectations.

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IBD put out a very interesting article about SAP today relating to problems the software giant is having.

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.

Tags:   bugs · I2 · Oracle · process · SAP · softwareNo Comments.

If you are looking to improve your sales, “Selling the Wheel” by Jeff Cox is a great book.  It doesn’t tell you how to sell per see, but it does help you identify what type of sales person you are and need. It should be no surprised to say that most businesses do not have the right types of sales people.

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…

Tags:   books · selling · [amtap book:isbn=0684856018]No Comments.