“Help! I urgently need to improve my supply chain performance and I have no money!”

Guest blog from Dave Lassiter, Director of Manufacturing Industry Solutions for Microsoft.

The current economy is certainly challenging all of us to do more with less.  As supply chain professionals, how often in the last year have you heard, “Cut costs, downsize your workforce, reduce procurement costs, and scale back inventory, and do it all without impacting revenues or customer service?  Sound familiar? 

We hear from our customers again and again that they need to quickly improve their supply chain performance.  However, customers with large ERP and legacy system investments have difficulty responding to critical business initiatives in a timely and cost-effective fashion.  These projects can take 9 to 12 months and cost over a million dollars.  No supply chain executive or CIO who values his or her job would dare take this traditional mega-IT project to the CEO for approval in this market. 

Without this “Big IT’ project option, line of business executives and IT executives scramble to find niche solutions to get them what they think they need quickly and at a perceived low cost.  However, these niche solutions further complicate the customer’s already complex and expensive Information Technology infrastructure.  Now, “legions” of highly compensated consultants often are required to manipulate these systems for a “business transformation” project that will now cost millions of dollars and take years to implement.  So what are they to do?

Microsoft has built products and solutions that are easy to use, quick to deploy, simple to maintain, leveraging existing investments. For example, one of our fastest growing enterprise products is SharePoint.   SharePoint provides a proven, low cost, intuitive, easy to use collaboration and Web 2.0 desktop work place for employees.  Most companies already own many or all of these capabilities and are beginning to leverage this desktop for deploying "role-based" dashboards for performance management and streamlined, simplified, lean business processes. 

Having such a platform in place can be particularly useful when a customer needs to quickly deploy a new business process to improve performance, to achieve cost savings, or meet revenue growth goals.  The great part about this platform is that most companies already own many or all of its elements and are beginning to leverage this Microsoft platform for deploying "role-based" dashboards for performance management and streamlined, simplified, lean, “real-time” business processes. 

So, what does this platform have to do with helping our supply chain executive and CIO out of their “do more with less” dilemma?  Let me tell you about a customer I personally worked with to help get a solution like this in place:
One customer with over $1 Billion spend annually on direct materials had buyers who spent a large portion of their day searching 24 separate screens in their standard ERP solution for the information they needed to process a routine purchase order for direct materials.  This included looking at supplier, material, quality, and other records in the ERP system.  One of the top 3 business initiatives of this customer was to reduce raw material costs.  The customer was also under pressure to significantly reduce their overall Information Technology budget.  The customer had both ERP and Microsoft capabilities to take advantage of to improve their business processes.  The customer needed a "low-cost" quick time to value solution which allowed their buyers to more quickly process purchase orders and have the “real-time” visibility needed to reduce purchase price variance. 

The Vice President Supply Chain had hard dollar cost savings targets that were going to be very difficult to meet without a simplified business process and KPI's to track performance improvement.  A Six Sigma team identified what the "role-based" dashboard needed to look like to implement a lean business process.  The customer selected Microsoft SharePoint versus typical options other customer might use like: (1) a custom ERP development effort; (2) purchase and roll out of the SRM ERP module; or (3) purchase of a SRM module from another vendor.  The customer now has a project underway to deploy a "Buyer Workbench" using the Microsoft platform with a 12 week implementation plan for a production roll out seamlessly integrated with their ERP system of record. The customer already owned the Microsoft licenses so the only costs for this project were the time of the internal project team and the supporting Microsoft Global System Integrator partner services.  This customer has also selected Microsoft for their enterprise Business Intelligence solution on top of ERP and other legacy systems.  They are now able to role these capabilities out to their employees across various functional areas providing a simple, intuitive “role-based” dashboard for their role in the organization.

One of Microsoft’s key Global Alliance partners, Infosys, has created a “role-based” performance management workbench offerings (Supply Chain Visibility) that can easily connect to a customer’s legacy systems like Enterprise Resource Planning (ERP) systems to enable “real-time” exception based Key Performance Indicators (KPI’s).  Infosys has created these “Role-Based” desktops for various functional roles in an organization such as Procurement, Manufacturing, Materials Management, and Service Management.  Infosys was selected to provide the "Buyer Workbench" mentioned in the paragraph above.   Infosys has developed an offering which allows customers to get a "fast start" on a project to support their key business initiatives in streamlining work processes and improving "real-time" exception based performance management.  This includes a data model, best practice KPI’s, templates, reports, and dashboards.
I am seeing a large pick up in these kind of “quick hit” projects with our customers.  The biggest challenge Microsoft faces right now is helping customers become more aware of how they can leverage these capabilities that they typically already "own."  I talked to a Chief Information Officer at the recent AMR Supply Chain Executive Conference; he was considering looking at an ERP solution for pricing analytics and procurement.  These were two key business initiatives at his Company.  He was not aware Microsoft partners like Infosys had solutions in the same space.  He was very pleased to find out there were Microsoft based solutions since they run a tight ship and can’t afford multi-million ERP based software and services projects.

On June 9^th, Infosys, Microsoft and AMR Research will present a Webinar to discuss how organizations can harness the value of their supply chain data towards improved performance using visibility and collaboration.  This session will be recorded, and I will be providing a link to the recording shortly after the webcast. – Dave Lassiter, Microsoft