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44 posts categorized "Web/Tech"

Knowing Your Actual Cost To Serve For Each Customer

By Richard Sharpe | 11/27/2018 | 10:48 AM | Categories: Web/Tech

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Summary
: Most companies can measure gross margin contributions for customer or store sales orders.  However, when it gets down to decisions regarding servicing those orders it becomes a little grayer.  Often the incremental and varying levels of costs associated with fulfilling those orders is buried and certainly not visible through the P&L.  So whats at stake?  Missed opportunities to realize significant cost reductions!  This is particularly true as companies struggle with the current shortages around transportation capacity.

Case In Point: One Chicago based company created an initiative to accurately measure the Cost To Serve of every customer through every sales channel.  The results were shocking.  For one specific channel, all customers were receiving 24 hour service deliveries (a one size fits all approach).  However, less than a third of these customers generated a positive contribution to the company’s operating margin. 

Action: Taking action on this discovery was made easier because the decisions were being made on fact based insights on the true cost to serve to each customer location.  Customers were categorized into performance segments based on sales volume, the cost to service those sales and the profit generated by those sales.  Delivery service levels were then aligned based on financial performance and an immediate $3.2 million dollars in transportation cost savings was realized.

Takeaway:  Ongoing knowledge about the specific and accurate costs to serve your customers or stores should be a core competency of your organization.  It is essential in managing the dynamic variations of operational costs and their direct impact to profit performance.  Using generalized information in managing your operation can lead to missed cost reduction opportunities.  Accurate, specific and repeatable Cost To Serve insights will allow you to out pace your competition and delight your stakeholders.

I would love to know your thoughts on this.  Please comment on this posting or email me at [email protected] .

All the best,

Richard Sharpe

Global Survey Results – Recognition, Frustration & Action

By Richard Sharpe | 10/23/2018 | 9:52 AM | Categories: Web/Tech

The results are in.  At this year’s CSCMP Global Conference in Nashville, the Team of professionals that conduct, analyze and report on the Annual Analytics & Big Data Benchmark Study (Lisa Harrington - lharrington group LLC, Susan Lacefield - Supply Chain Quarterly, Dale Rogers - Arizona State University, Zac Rogers - Colorado State University and myself) presented the findings of this year’s survey (a copy of the presentation can be made available - see below).  The results clearly indicated that companies continue to recognize the need to gain business value from Big Data Analytics but that there is a significant amount of frustration across industries. 

Challenges with data, struggling with meaningful analytics and ultimately getting to actionable strategies were clear drivers for this frustration.  As an example, look at the attached graphic on data:

image from www.ci-advantage.com
The good news is that companies are gaining a deeper appreciation for the business value that can be derived from Big Data Analytics and are being more objective with regard to the effort that is needed to achieve that value.  So what are some key steps to cross that gap faster?  Four primary areas and specific actionable steps were cited to drive success as depicted in the following graphic:

image from www.ci-advantage.com
So the race is on.  Companies get the fact that in the fast paced environment that we all operate in today, it is critical to make fact based decisions using the all of the transactional data that is available through a set of business user analytics. Decisions that drive competitive and profitable performance. 

For a copy of the presentation, please contact us at [email protected] 

Thank you,

Richard Sharpe

Do You Know If Your Organization Is Leading or Lagging?

By Richard Sharpe | 07/24/2018 | 11:49 AM | Categories: Web/Tech

Blog099_cyclingrace
If you are anything like me, the last thing you want to do is complete another industry survey.  However, gaining significant benefits from supply chain big data analytics is now a race to the top. Being a leader in utilization equals competitive financial advantage. Being a laggard means being marginalized by your competitors.

Companies will spend $266 billion this year on analytics and big data initiatives with 40% of companies doubling their spending on supply chain analytics.  Are you?  If not, how can you have a fact-based conversation within your company to raise the bar in prioritizing this critical need?  Edwards Deming said it well, “Without data, you are just another person with an opinion!”

That's what the Second Annual Analytics & Big Data Benchmark Study is about and we need your help.

Why should you care about this survey? What's in it for you?

  • know where you stand against your competitors during our industry's transformation to Supply Chain 4.0—the big-data fueled, next-gen supply chain?
  • know where supply chain analytics technology is going?
  • know how companies are making this technology "real" in their global supply chains
  • use this knowledge to gain support to empower your supply chain's future?

What you get for participating:

  • a copy of the full survey results with in-depth analysis. You receive an insider report on the survey findings. High level results will be presented at the Council of Supply Chain Management professionals' annual global conference. You get the full findings—not a summary.
  • If you're one of the first 100 respondents, you'll be entered in a drawing for one of two $100 iTunes gift cards!

The survey is anonymous.  Please give us 10 minutes of your time and fully complete the survey (we can’t count partial answers).

Click here to participate in the survey

If you have trouble with the link above, please copy and paste the following URL into your web browser: https://colostate.az1.qualtrics.com/jfe/form/SV_3gvY5LULNVRsj9r

Thank you,

Richard Sharpe

Does your “Data Tank” Have Water In It?

By Richard Sharpe | 02/13/2018 | 8:48 AM | Categories: Web/Tech

Blog037_GasCarRoad
It is hard to pick up any industry publication and not see articles on “the digitization of the supply chain” or “the value of supply chain visibility”, or “the power of analytics”. Certainly, the value of these types of supply chain advancements is significant. As certain, some companies will realize the value and thrive while others will not.

Is your operation ready to fully empower and utilize these advancements to get all of the true benefits that analytics can offer? Realized benefits that come from fact based, data driven decisions. Does your data have the high octane impact of TRUSTED data that you really need to run your business?

The Problem

Consider the impact on your business. Do data issues cause your organization to:

  • Be hampered by indecisive actions or bad decisions
  • Spend valuable time resolving data issues rather than solving problems
  • Experience organizational confusion and frustration
  • Have a lack of confidence and mistrust about specific functional data
  • Believe that data is more of a liability than an asset

You’re not alone. Data quality is a universal issue. A recent Harvard Business Review (https://hbr.org/2016/09/bad-data-costs-the-u-s-3-trillion-per-year) article states that data issues are costing businesses in excess of $3 trillion dollars a year in the U.S. alone! Here is a highlight from the article:

“The reason bad data costs so much is that decision makers, managers, knowledge workers, data scientists, and others must accommodate it in their everyday work. And doing so is both time-consuming and expensive. The data they need has plenty of errors, and in the face of a critical deadline, many individuals simply make corrections themselves to complete the task at hand.”

So what’s the impact of making less than optimal decisions because of imprecise, inaccurate, or untimely data for your company?

The Solution

Here are vital best practices to consider:

  1. Create Executive Support – data issues create recurring and significant costs and are a real competitive risk. Quantify and qualify this impact to gain a C Level call to action.
  2. Be Intentional – don’t try to “boil the ocean”. Focus on a critical business priority and demonstrate the value that having validated and trusted data has in the speed of the priority’s success.
  3. Recognize The Power Of Cross-Functional Consensus – most decisions have a cross-functional impact. Involve other functions in the process to secure early buy-in to the solutions.
  4. Apply Proven Methodologies and Technologies – don’t go after this by creating the solution from scratch. There are proven solutions to this problem that are timely, effective and repeatable.
  5. Approach The Solution As Building Organizational Capability Not As A Project – operating system changes, acquisitions, changes in personnel are just a very few real world reasons that data issues are not a static set of problems. Solve your data issues by investing and building organizational capability to proactively address them over time.

More precise data leads to more precise information and ultimately superior knowledge. The wisest business person will make the worst decisions if they lack trusted, detail data.

There is more at stake than you might think. Companies that tackle their data issues and empower their decision makers with solid analytical capabilities will continue to win the competitive battle. Those that defer will disappear. Think Amazon!

Need ‘war stories’ and additional information to lead your company to better decisions through better data? Contact Tami Kitajima at [email protected] and we will be happy to provide that information.

All the best,

Richard Sharpe

Beating Amazon – Winning with Offensive Strategies

By Richard Sharpe | 12/08/2017 | 7:25 AM | Categories: Web/Tech

Blog36_playbook
Let's be honest. If you look at most companies’ strategies to protect margins and market share being eroded by Amazon, the operative description would be “Defensive.” Over the last few months, Competitive Insights and the lharrington group have been researching what specific actions will help companies develop winning strategies in dealing with Amazon. The outcome is a three-part white paper entitled Tackling the “Amazon Effect”—Time for Offensive Strategies. Three key takeaways have been identified:

  1. Well beyond Retail. All industries have the potential to be seriously impacted by Amazon. Wholesalers, Distributors, Third Party Logistics (3PL) Service Providers, and Manufacturers must stop playing defense and go on the offense. Offensive strategies that are based on knowing where you make and lose money for every product, customer and channel combination. Competitve actions that reinvent customer service options, targeted product offerings and intelligent pricing models that take into account the full impact of discounts, promotions, and product returns. Continuing to build traditional competitive strategies using standard P&L levels of detail will result in market displacement. Plainly put, you can’t beat Amazon playing defense.

  2. To win against Amazon it is imperative to adopt a competitive ecosystem that is built on three tenets:
    1. Rapid access to precise and specific profit performance insights by product, customer, and channel.
    2. Utilization of this information to create strategies that break traditional siloed decision making through collaborative, cross-functional decisions.
    3. Setting organizational expectations that that this type of information is the foundation for consistently creating winning competitive strategies, even as business conditions change.
  1. To gain maximum advantage, each industry must use these actionable insights to drive and protect their sustainable ability to generate profits. Examples:
    1. Retailers introducing value-adding services that drive consumer purchasing of profitable product portfolios.
    2. Wholesalers & Distributors understanding the true profit contributions of each delivery location and the specific profit performance of the products that each customer is buying.
    3. Manufacturers using profit performance insights to intelligently make informed decisions regarding product variations by channel and customer category.
    4. 3PLs increasing customer loyalty and retention by providing innovative value-added services, with a focus on making their operation and their customers more profitable.

The impact of Amazon has become the “bar” against which companies are being measured by their customers, either directly or indirectly. Companies will not survive if they continue to use functionally siloed, defensive decision-making. 

Companies must decide how to compete, collborate, emulate, diverage from, merge with, and/or capitalize on the Amazon Effect. They must be able to quickly and effectively measure the financial impact of decisions with actionable cost and profit information. Information that is trusted throughout the organization.

The choice is simple. Go on the offense to win the game or just be another losing statistic in the rapidly changing playbook.

Want to know more? Please contact or Competitive Insights at [email protected] or the lharrington group at [email protected] 

We would love to hear your thoughts!

All the best,

Richard

The First Annual Supply Chain Data and Analytics Survey Results Are In – Where Do You Stand?

By Richard Sharpe | 11/02/2017 | 3:17 PM | Categories: Web/Tech

Blog35_wave
Have you wondered if other companies have the same level of difficulty and frustration regarding getting real and repeatable value from their supply chain data and analytical efforts?  Well wonder no more.  The results are in from the first global survey answering this question across multiple industries and they are significant.   

Using  Competitive Insights’ maturity model that is based on data organization & governance, cross functional utlilization and and the number of actual business analytics being routinely used, the current value being realized across all industries is 33.3% of the full potential value that can be derived from the effective use of supply chain analytics!

These results serve as a baseline for companies to have an unbiased source for measuring where they actually stand as it relates to other companies and industries.  The survey provides findings that will be updated each year.

The results are published in the Q3 2017 issue of CSCMP’s Supply Chain Quarterly.  The responses provide insights and answers to critical questions including:

  1. What is the current satisfaction with the following four attributes of the data you need to do supply chain analytics?
  1. What are the primary forms of technologies usedforyour supply chain analytics?
  1. What types of analytics are your organization taking the most advantage of?
  1. What are the most significant barriers that you have in getting more value?
  1. What benefits have you realized to date from your supply chain analytical investments?

Want to know more?  If you already subscribe to Supply Chain Quarterly, then the answers are on the way.  If not, you can read the article HERE

Once you review this information, use it to drive your own internal discussions.  Measure your results against other companies.  Learn how you might take actions to obtain the maximum value out of your supply chain analytical investments!  And just as important SIGN UP NOW to participate in next year’s survey!

All the best,

Richard

Taming the Big Data “Monster” - A CSCMP Learning Opportunity

By Richard Sharpe | 09/22/2017 | 9:25 AM | Categories: Web/Tech

Blog34_Scale
Are you attending CSCMP’s 2017 Edge Conference in Atlanta next week?  Would you like to know where your company stacks up with regard to other companies’ success in deriving real and sustainable financial value from Big Data and Analytics investments?

Please join us at 10:30 am on Monday morning (Track 16) to hear the results of a global survey conducted by CSCMP’s Supply Chain Quarterly, Arizona State University, Colorado State University, the lharrington group and Competitive Insights titled Taming the Big Data “Monster”

The session will provide meaningful survey insights on the true challenges and benefits that companies have experienced as well as their expectations for future big data and analytics investments.  This survey will be continued yearly and will be a valuable resource to measure the progress companies are making in applying big data analytics to support increases in profitable performance .  This year’s inagurial release will serve as a starting point for your company to measure and track the progress that you are making versus other companies.  At the session you will want to sign up to receivet a copy of the full report.

Seats will be limited so please come early and join us on Monday, September 25th from 10:30 – 11:45 a.m. (Level 2 C211-C212) to learn more.

All the best,

Richard

Baselining Your Realized Value and Learning From Other Companies

By Richard Sharpe | 07/25/2017 | 5:44 AM | Categories: Web/Tech

Blog33_ValueHardToSee

Gartner estimates that companies will spend $18.3 Billion on analytics and big data initiatives in 2017, an increase of 7% over 2016.  That number is expected to grow to $22.8 Billion by 2020 as executives are becoming more cognizant of the importance of gaining sustainable value from big data analytical capabilities.  Earlier this year Dun & Bradstreet and Forbes Insights explored this question through a survey of over 300 executives across multiple industries and regions.  Here is a link to a recently released report sponsored by Dun & Bradstreet summarizing the results that is well worth the read.    

How much has your company spent (internally and externally) over the last 18 months on analytics and big data initiatives?  What are your Executive Team’s expectations of ROI?  Have you come anywhere near meeting these expectations?

As I mentioned in my last posting, we hear two very different responses when talking with companies about their success in mastering growing volumes of supply chain data and gaining sustainable value from business user analytics. The first is a public ally declared answer of success and progress while the second one, once the door is shut, typically offers various degrees of frustration and minimal progress. To understand the real progress of other companies’ big data analytical efforts, you need a non-speculative way to measure your progress versus your peer companies.  You need the ability to have a better understanding of peer companies’ challenges, the benefits they have realized, and their focus for future analytics and big data investments.

I am pleased to announce that the global survey conducted by  a team comprised of CSCMP’s Supply Chain Quarterly, Arizona State University, Colorado State University, Competitive Insights LLC, and lharrington group LLC has successfully captured the information required to establish this supply chain industry baseline for big data analytics.  The outcome of this survey supports the identification of  true challenges and benefits that companies have experienced as well as what they expect to gain from future big data analytics investments.  These results serve as a starting point to measure and track each year the progress that companies have made in realizing the value from big data analytics. This year’s survey results will  be presented at the annual Council of Supply Chain Management Professionals (CSCMP) Conference and published in various articles in both the CSCMP’s Supply Chain Quarterly and DC Velocity.

So when the door is shut and you are having internal discussions on your successes and frustrations in deriving value from your big data analytics investments, you now have a way to move from speculation to fact. 

Where are other companies breaking through the challenges ot rapidly accessing the right data, in solving quality and timing issues and their ability to continually gain meaningful analytical answers to prioritized business problems?

What are their next set of prioritized areas of focus?

One interesting early discovery from the survey results is that some technologies used for big data analytics do offer limited benefits but fall short in providing the true overall business value that can be gained from successful analytical efforts.

Naturally, this surveying effort will only get stronger as we learn from you what is beneficial and what is needed to get more insightful information. If you did not participate this year, please take the time to complete next year’s survey.  It will only take a few minutes but the impact can be significant. Participants of this year’s survey represent over 20 industries around the world.

This year’s results are clearly statistically sound.  Lets make next years participation a blowout!

All the best,

Richard

Where Are You Really In Taming The Big Data and Analytics Monster?

By Richard Sharpe | 05/30/2017 | 5:59 AM | Categories: Web/Tech

Blog032_survey

There are often two answers that I hear when talking to companies about where they are in mastering growing volumes of supply chain data and gaining sustainable value using various forms of business user analytics.

The first response is the one publically offered – “We have made substantial investments in technology and expertise and are well on our way in harnessing real value from our data.”

The second “real” answer, once the door has been shut and confidentiallty agreements have been signed, is one of frustration and disappointment.  “Our progress has been extremely slow.  Yes, we are doing the traditional project exercises like various forms of modeling.  However, it is still difficult to get to the value-added information directly into the hands of the decision makers quickly and consistently for ongoing strategic and tactical needs. Even if they do get this information, there is often an underlying doubt about the quality of the data used in generating the required information.”

Companies need to have a measure of how they stack up against other organizations in their journey to master big data and analytics. To address this need, a survey has been created by a team from Arizona State University, Colorado State University, Competitive Insights, CSCMP’s Supply Chain Quarterly and the lharrington group LLC.  The purpose of the survey is to capture meaningful  answers regarding the progress that companies are making in mastering data and the application of meaningful business analytics. The result will be used to create a Supply Chain Industry Baseline that reflects meaningful responses from a multitude of companies, different industry segments and regions of the world.

This survey will be issued on an annual basis to serve as a means to track the progress that companies are making year over year. The comparisons will show where and how companies have been successful. Finally, it will be a resource to understand the actual challenges and frustrations being experienced by companies in their pursuit to master their data and meaningful business analytics. Therefore, the survey findings will be a resource for companies to determine how their efforts measure up to other companies and to serve as input for internal discussion on big data and analytical priorities.

A preview of this year’s findings will be issued, prior to general release, to all of those that respond to the survey. Highlights of the findings will be presented and discussed at the annual Council of Supply Chain Management Professionals (CSCMP) Conference in September. More detailed results as well as other relevant research will also be published in the Supply Chain Quarterly and DC Velocity.

Over the next following weeks, recipients of Supply Chain Quarterly, DC Velocity and Competitive Insights‘ monthly newsletter will be receiving this electronic survey that has been carefully designed to create this industry Baseline.  Responses will only be used to create the Baseline and the associated correlations and findings.  No individual response will be published or referenced in the results or used for any company solicitation. 

The more companies that respond and the more honest their responses, the stronger the results will be for EVERYONE in the Supply Chain Industry. Please take the survey HERE or at colostate.az1.qualtrics.com/jfe/form/SV_bO98R0OrXZTnxYN 

All the best,

Richard

Hanjin: Why are today’s supply chains more at risk? Part 2

By Richard Sharpe | 11/07/2016 | 1:51 PM | Categories: Web/Tech

My last posting focused on the potential use of analytics and big data to protect an enterprise’s ability to generate profits and offered the following definition for Supply Chain Risk Management (SCRM);

the development of strategies to minimize or eliminate the financial impact of supply chain disruptions through the identification and prioritization of possible disruptors at all points in the supply chain, from sources of raw materials to the final delivery to customers”.

Blog030_SupplyChainDisruption

In this posting we will address the following questions:

  • Why are today’s global supply chains more susceptible to significant disruptions?

The success of adopting Lean practices. Yes, the widespread adoption of Lean has provided for reduction of waste, increases in efficiencies and lower operating costs.  However, it has also eliminated the access to alternative choices, if the primary resource of an operation is no longer available. 

Expansion into new operating regions while also shifting production to lower cost operating areas. Today's supply chains simply have more moving parts that go beyond the direct span of control of one company; more moving  parts, more risk. 

The volatility of operating in today’s world. Political uncertainties, currency fluctuations, shifts in market demands and social unrest are further factors that can throw a curve ball to any global supply chain operation.  Think about how the Arab Spring impacted business throughout the region.

  • Who needs to be involved in creating, implementing and maintaining an effective SCRM program and What can you do that goes beyond Crisis Management?

Supply Chain Risk Mitigation strategies should always be based on three basic principals; redundancy, contingency and policy mitigation strategies. Each can involve elements of adding costs, making specific operational changes or simply changing an operational policy. 

To be effective, the identification, selection, justification and internal socialization of the mitigation strategy must be cross-functional and this often means involving Sales, Marketing, Finance, Supply Chain as well as other appropriate functions.  If these types of decisions are made in a vacuum (siloed) they will never survive the organization resistance to change or the next set of budget cuts.

  • How do you determine that your SCRM strategies are working?

Your company must have a consensus based “measuring stick” that is cross-functionally agreed upon.  An agreed upon set of measurements that are aligned with the organization’s priorities and that allows for an organizational consensus on how to identify, measure and prioritize significant, potentially disruptive risks. 

There is no better way to do this than to understand the specific financial impact of each potential disruption, e.g. how much it would hurt the bottom line.  Once created, the same set of measurements should be used to monitor the mitigation impact of each implemented strategy.

I would love to hear your comments.

All the best,

 

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.



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