The Year of IT Pragmatism: Gartner conference wrap-up

Attendees at Gartner’s Supply Chain Executive Summit were urged to be realistic, but ambitious about investments and end goals in supply chain-related IT.    This may be the Year of the Sheep, but for supply chain professionals, maybe a better name is the Year of Pragmatism.
   The overriding theme at this year’s Gartner Supply Chain Executive Conference, held this week in Phoenix, was one of being realistic about your supply chain-related technology investment, implementations and goals.
   That doesn’t mean that caution should replace endeavor. Indeed, part of risk management is taking some calculated risks on investing in technology that may seem daunting at first. You get nowhere waiting for your company to catch up to innovation.
   Some key ideas from the three-day IT summit in the desert:

• Fail fast and fail cheap.
• Don’t let perfect get in the way of good.
• Start small, especially for projects that seem all-encompassing.

   Another notable takeaways was that companies should work diligently to marry the art (i.e. the pitch) with the science (i.e. the facts) when they make their business case for investing in IT. American Shipper research last year showed that between one-fourth and one-third of practitioners felt they had the wherewithal to invest in transportation and compliance-related IT. That makes perfecting the case for investment critical when trying to get corporate buy-in.
   Gartner’s Steve Steutermann urged companies to consider how they benchmark their supply chain. He said a company shouldn’t go into a benchmarking exercise believing it will exceed peers in every facet of its operations. No company has the resources to accomplish that, and it’s often unnecessary to focus on improving areas that aren’t critical to the business. Focus on being par in those areas and exceeding peers in the metrics that differentiate your business from competitors.
   Proctor & Gamble’s Alistair Hill described how his company has used transportation forecasts to get a better projection on the trucking capacity they need in Europe, giving them visibility into capacity beyond the horizon they had with their transportation management system.
   “TMS is the platform,” he said. “Once you have that under control you can work on higher level modeling and analytics.”
   P&G’s complexity is palpable – the consumer packaged goods manufacturer manages 600,000 lanes globally. Hill’s presentation also gave a window into the numerous transportation-related systems a company with the footprint of P&G typically uses. While Terra Technology is used for the transportation forecasts Hill described, P&G uses JDA for its TMS and is also a customer of cloud-based visibility provider GT Nexus.
   Jeff Kuhn, vice president of supply chain planning and operations at Brown Shoe Co., talked about the unique challenges shoe manufacturers face in managing their supply chains from sourcing through to delivery. His company has four to six “seasons” per year, with 90 percent of its products changing per season. That equates to managing 11,000 products per year, and a couple hundred thousand SKUs.
   Kuhn’s presentation was about how Brown Shoe Co. built structure first through the use of SAP as a backbone system, and then global trade management solutions provider Amber Road (through the ecVision tool that Amber Road acquired earlier this year) for supplier collaboration. The tail end of his discussion was about how to measure the return on investment on such an IT project. Kuhn said it is vital to be sure the benefits the company gets are enabled by the new tool, and not partially or wholly a result of other systems or process.
   “There is often overlap between systems, so you have to be careful not to double count the ROI benefit,” he said.
   One last point that heard a few times during the show, most notably from Matt Goodman, president of Global Trade Management for Livingston International, is the idea that shippers are valuing software over services more and more. It’s a hard thing to measure, particularly as many vendors (including Livingston) offer software, services, or a combination of the two. But it’s worth considering where on that services-software spectrum your company finds itself.