An IT Roadmap

September 15th, 2015
IT should support business strategies and objectives

Creating an IT roadmap shouldn’t be all about the bells and whistles of the system, but rather on the technology that supports the strategy and business objectives.

I recently participated in a supply chain roadmap for the Inland Empire focused on the needs through 2025. Although related to supply chain instead of systems, it reminded me of the value of thinking big picture and longer term – a great exercise to go through to take a comprehensive view and think about strategy especially for manufacturers and distributors!

When creating an IT roadmap, there are several areas to consider: 1) The strategic priorities of the business. 2) Systems and technology strategy to support the business objectives. 3) Opportunities to leverage technology for additional improvements.

  1. Strategic priorities:  Do NOT start with the latest and greatest technologies available. It might be “cool” to integrate the latest iPhone into the mix but is that the best option for supporting the business strategy and objectives? Instead, start with the strategy for the company. Understand the key elements of the strategy. Dig deep into what will be a positive effect for the strategy and what roadblocks or issues might arise in meeting the strategy. Before one technology is mentioned, there should be a clear understanding established of the business strategy.
  2. Systems & technology to support the business strategy: How do we translate the business strategy into an IT strategic roadmap? What will be required from an IT standpoint to ensure success with the business strategy? Start by evaluating your current infrastructure and systems architecture. How does that compare with what will be required to meet the long-term business strategy? Undoubtedly, gaps will emerge. There will be several options for how to address the gaps. The key will be evaluating the options from a complete business standpoint, considering 1) cost; 2) service (including speed); 3) automation/efficiency; 4) strategic fit (although each is a fit overall, some will be more closely aligned than others); and 5) ability to support growth.
  3. Opportunities to leverage technology for additional improvements: Beyond what is required to support the business strategy, IT will uncover opportunities for further improvement. Typically, these opportunities will fit into one of the following categories: 1) IT infrastructure/architecture improvement due to advances in technologies available; 2) Opportunities for business process improvements by leveraging new functionality and technology that has emerged since the last roadmap. 3) New combinations of systems/technologies which will drive further results. Within the scope of the company strategy and objectives (which will also dictate return on investment and associated budgets and resources), selecting the highest impact priorities is a great starting point.

For example, if upgrading your ERP system is a “must” to support profitable business growth (which wouldn’t be surprising as I’m seeing a heightened increase in this area within the last 12-24 months), selecting the system that best matches and supports your strategic priorities is vital. I consider these critical success factors. There will be several options for how to host the ERP system: 1) purchase and maintain your own technology; 2) utilize remote servers, maintained by experts in the hardware infrastructure chosen; or 3) cloud – in essence, rent your hardware and software infrastructure with no “hands-on” responsibilities. Undoubtedly, there will also be opportunities for improvement that arise with the new ERP system. It will be cost and resource prohibitive to implement them all; however, implementing the top few can drive substantial results.

Do you know where your IT team is headed? Does it line up with the business priorities? In today’s Amazon Effect marketplace where speed is of the essence, there is no time to waste. Align your IT strategy with your company strategy and optimize your investment in systems and technologies to elevate your business performance.

Did you like this article? Continue reading on how to become a Systems Pragmatist:

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ZZ Top & the Power of a Brand

September 14th, 2015

supply chainI saw ZZ Top at the Los Angeles Fair on Saturday night. They were still amazing after 47 years of singing together. Much longer than most marriages – and certainly longer than many in the audience had been alive. They are known for long beards (see below for a long distance picture from the grandstand) except for their drummer whose last name happens to be beard.

I’ve seen the head singer for ZZ Top on Bones, and aside from playing a great character, his beard is recognizable anywhere! Not that I’m suggesting beards; however, the question is – do you have a brand? It certainly can make you stand out from the crowd.  I venture to bet that even people who don’t care about ZZ Top know who they are because of their signature beards. How are you known?


One tip to implement this week:

Start growing a beard!  No, just kidding – think about how you are known. What would other people say about you? If you heard your colleague or best friend describing you, what would they say? You can control that by becoming known for something. Are you always known because you jump in to help? Or are you the numbers guru? Or perhaps you are known for a signature car? It doesn’t really matter what you are known for (assuming it isn’t something awful); what matters is that people can remember you.

Looking for more ideas to keep your supply chain connected? Access more tips and resources on my blog. And keep connected by subscribing to my newsletter and email feed of “I’ve Been Thinking…”


The SIOP Conveyor Belt Analogy

September 11th, 2015
SIOP conveyor belt analogy

The ongoing planning and adjustments integral to the SIOP is like a conveyor belt carrying along current data and processes until they become history.

SIOP (Sales, inventory, & operations planning) is a methodology of sorts that aligns demand with supply – and, more importantly, the various functions of the organization, customers, and suppliers on a demand/supply plan. When done well, it can achieve dramatically effective results – supports growth, accelerates cash flow, improves turnaround times, maximizes margins, and increases efficiencies. Who wouldn’t want to find out more?

In the last few years, I have helped several clients design and implement SIOP.  It is not a one-time project; instead, it can be viewed as an ongoing improved way of doing business – a culture change.  Similarly to a safety program, SIOP must be built into the day-to-day culture. It cannot be a separate entity if you want to achieve dramatic results. Thus, a key part of the process is to sustain a monthly flow or cadence.

Whether it is a process step or there is a formal meeting, there will be a demand planning process, a supply planning process, a demand/supply review and an executive SIOP review. Typically,  I see at least a demand planning meeting because coordination is required with Sales, Customer Service, Program Management, NPI (New products), Marketing etc., and usually a supply planning meeting to coordinate with Operations, Engineering, Procurement, Planning, NPI, etc.  The larger companies will also have a formal demand/supply meeting. However, at a minimum, EVERY company that achieves results will have an executive SIOP meeting. Gaining alignment of the executive team and the SIOP leader is of paramount success for execution.

During the monthly review process, you will review at least current year-to-date, most likely the prior year and will look out 12-60 months depending on what makes sense for your industry and particular business. Thus, each month one month will drop off/move to history and one month will be added at the end of the cycle. For example, most of my clients have looked out 18-24 months. Thus, the current month will become history, a month will drop out of old history and month 18 will be added. One of my clients made the analogy of a conveyor belt. One month falls off and another gets picked up – it is as simple as that. I liked the simplicity, and it points out the importance of cadence to SIOP success. 

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Vendor Managed Inventory Is Making a Comeback

September 8th, 2015
Vendor managed inventory

Vendor Managed Inventory (VMI) offers companies a chance to partner with customers to better manage inventory and costs. Once the partnership proves fruitful, expanded business opportunities occur.

I recently participated as a panelist with Michael DeCata, CEO of Lawson Products, for Industrial Distribution magazine’s VMI (vendor managed inventory) webinar. Although one of my first articles of my consulting practice from 2005 related to VMI as I found it a great vehicle in driving win-win results, it wasn’t talked about much until recently when it resurfaced as a popular strategy for success. The Amazon Effect has increased interest in this timeless topic!

When I was VP of Operations for PaperPak, we implemented VMI with our #1 customer. Not only did we go from being “off the scorecard” to being named supplier of the year for 2 consecutive years, but we also expanded business and improved our margins and cash flow with the implementation of VMI. Certainly something to consider!

The top benefits of VMI are the following:

  • Cash flow: As you better manage inventory in your supply chain, cash flow is improved across the board. In my example, we reduced inventory levels at our customer and internally for a win-win.
  • Margins: There are countless numbers of ways to improve efficiencies and margins when partnering on VMI. In my example, we were able to improve packaging which reduced freight costs, collaborate on pallet configuration which reduced warehousing costs and combine/improve upon the ordering process which reduced overhead costs.
  • Lead Times: When partnering with VMI, lead times are typically reduced.  In my example, we were able to reduce our key customer’s lead time. Certainly, a day of lead time reduction is significant in today’s Amazon world.
  • Revenue: As you become partners, opportunities to increase business occur. As service levels and lead times are improved, lost sales disappear. Additionally when in a partnership, you are easy to do business with. Growth often turns into a win-win.

With these significant benefits, why not give VMI a try? Start with your top customers and discuss the possibility.

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Labor Day Parades & the Value of Tradition

September 7th, 2015

supply chainIt is Labor Day, and I am reminded of when I was young and growing up in Schaumburg, IL. Labor Day was really exciting because there was a great parade that went right by my house on its parade route. We’d wake up early to make sure we got seats at the end of our driveway and saved seats for friends and family. We were the cool house, at least that day!

We made a day of it! My Mom and Dad made it into a fun event. A few years I was in the parade with Girl Scouts, Indian Princesses, etc. – and many years I’d watch and run after candy that was thrown from many of the floats. The candy was a big hit! It was also a signal that fall was coming which is a much bigger deal in Schaumburg than it is in CA. I was very lucky to have such a fun tradition – who knew not everyone could immerse themselves in Labor Day parades!

One tip to implement this week:

Traditions are a great way to bring people together. What traditions do you have at work? Think about what is unique about where you work or the department you work with. Can you develop a tradition if one doesn’t already exist? It doesn’t have to cost money or even much time. What could you do that would involve your entire team that might be fun for years to come? Consider this – it doesn’t have to be complicated. Bring the “right” attitude and create tradition. Come up with a silly game that creates camaraderie and supports the company or department culture. You just might have fun – and be one step closer to creating a tradition.

Looking for more ideas to keep your supply chain connected? Access more tips and resources on my blog. And keep connected by subscribing to my newsletter and email feed of “I’ve Been Thinking…”