Getting everyone on the
same page
AN OFT-INVOKED QUOTATION FROM THE LEGENDARY QUALity expert Dr. W. Edwards Deming states that “You can’t manage what
you don’t measure.” True words, indeed.
His words have prompted thousands of companies over the past
three decades to implement detailed metrics programs to track their
performance. Makes sense so far, right?
It seems, though, that these efforts often fall short despite the best
of intentions. And the problem may have nothing to do with mis-aligned metrics, lack of strategic vision, or even poor management.
Rather, the problem could lie in the important
enabling technologies that companies use to
improve (and yes, measure) their performance.
To understand why this would be, you need to
know a little about the forces that have reshaped the
supply chain management world in recent years.
One, of course, has been the evolution of metrics.
Another has been the push to break down functional silos and unify the entire enterprise around such
common goals as sustained profitability, stellar customer service performance, and driving growth.
But simply dismantling silos isn’t always enough.
A number of companies have been disappointed in
the results. Instead of getting better, in some cases,
things have gotten worse.
Part of the problem may be that while these companies have broken down the functional silos, they’re still mired in technological
silos. What’s happened is that over the years, they’ve invested in
sophisticated technologies to manage various aspects of their operations—transportation, procurement, warehousing, production, and
even point-of-purchase activity. These systems can be remarkably
effective in generating large volumes of useful data. There’s just one
problem: There’s no way to meld it all into a single, unified database
that provides a big-picture view of the operation.
As Richard Sharpe, CEO of Atlanta-based supply chain software and
service specialist Competitive Insights, said in a recent interview, “The
functional silos are gone, but what about the performance data silos?”
The takeaway here is that if you want to be rid of silos, you need to
be sure that your technological infrastructure is built in a way that
will support, rather than detract from, that mission. And it appears
that companies are beginning to realize that. A recent study conducted by Sharpe’s firm over an audience of CFOs indicates that busi-
nesses are placing a very high priority on finding
better ways to analyze and understand their performance, especially as it relates to profitability.
Sharpe has literally staked his business on giving
clients a better way to do just that. After eight years
in development, Competitive Insights has rolled
out a software-as-a-service package called
Sharpe says the product has
the potential to transform
many businesses. “It’s all about
looking at what they are doing
and how it is improving the
bottom line,” he says. “We are
providing a tool to efficiently
get data from across all these systems into one
place [so the information] can be analyzed to
answer very specific and important questions
about profitability—and we can do it with gran-
ularity right down to the SKU level.”
Initiatives like this could be an important step
toward getting all of the players in a supply chain
on the same page. Perhaps more importantly,
from that page, they will be able to answer the
question their boardroom-level managers want
answered: “Where are we making money, and
where are we not?”
