Volume 1 Issue 2 June 2003
Today's SC Market ... The "Quick Hit"
Steven Chung, VP Global Professional Services
Just a few years ago, multi-million dollar supply chain implementations that took more that a year to implement were the industry standard. Fortune 500 companies were investing in supply chain projects that, sometimes, fell short of expectations in functionality and return on investment. By contrast, today, companies are demanding "Quick Hit" point-solutions that can be up-and-running in weeks or months, pay for themselves within the first quarters of operation, and are flexible and scalable to meet future requirements.
The budget-buster supply chain projects from the late 1990's, coupled with the emerging recession, the bursting of the tech bubble and multiple financial scandals, fostered a noticeable level of risk aversion among buyers of SCM software. To illustrate the market shift, here's a real-life example from a leading manufacturer of consumer durables, dealing with the classic problem of sales, operations and inventory planning:
Rather than investing heavily and announcing a massive initiative, the company and a consulting partner created a roadmap to prioritize IT spending based on critical business needs. In this case, demand planning was identified as the top priority. A focused, rapid implementation took place, and it successfully delivered measurable results in only a few months. Planning cycle time is now four times faster and 30% more accurate, which translates into an improved inventory mix for customers. The company has the right products, in the right quantities in the right location at the right time. The impact of this can be measured in higher customer satisfaction levels, increased revenues, faster inventory turns and increased asset utilization.
Flush with the success of the demand-planning project, the company's CIO approved funding for the supply-planning phase of the sales, operations and inventory planning initiative. Another rapid implementation followed, enabling the company to model its total supply chain capabilities, fully integrated with the existing demand-planning system. The business has improved its operations by linking, in real time, the demand data (what customers need) with supply data (what the factories can deliver) on a single platform. Therefore, if customer demand changes, the factories can rapidly respond to those changes while improving asset utilization, capacity planning, execution speed, and customer service. If supply changes, this information can be viewed by sales to remedy issues and/or manage customer expectations. Return on assets improves; inventory turns improve, while overtime and expediting costs decrease. Customers get what they want faster with fewer issues, and the manufacturer is more efficient and profitable.
Here's another example of the "Quick Hit" approach from a leading industrial manufacturer with multiple sites, worldwide. This multi-billion dollar business was still using spreadsheets to deal with material and capacity constraints, and the CEO demanded that a technology solution be implemented to improve performance. Rather than investing tens of millions of dollars in software and consulting, the company decided to conduct an implementation pilot project at a single site. This project required minimal up-front software and services investment, and ended up being a smashing success… reducing planning cycle time by 50% and reducing inventories by 20%. The customer purchased additional copies of the software and replicated the implementation model for its remaining factories, worldwide. Lessons learned from the first implementation made the subsequent rollouts more efficient, and the initiative exceeded management's expectations.
To summarize these two examples, the shifting trend from reengineering to "quick hit" projects not only helps companies get up-and-running faster, but also affords valuable lessons-learned through incremental roll-outs, facilitates change management (by taking on less scope), and mitigates overall financial and operating risk. Customers today want stable technologies that work; that can be delivered quickly; and that secure measurable value. Technology vendors must, therefore, retool their focus on meeting these needs with flexible, cost-effective technologies that rapidly provide tangible benefits. Adexa adopted the "quick hit" approach from its very beginning in 1994, getting its customers up-and-running on leading SCM technology in just a fraction of the industry average deployment time. By leveraging its patented unified data model, highly flexible configurations and unique methodology, Adexa delivers solutions in weeks rather than months, and months rather than years (depending on the scope of the client's needs). As customers continue to complain about the high cost and relatively slow returns on their SCM investments, Adexa offers an alternative - advanced technology solutions for real business problems that can be implemented quickly, and create a platform for continued growth and flexibility.
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