No Room for Hyperbole When Rubber Hits the Road
Hyperbole is exaggeration. By definition, it emphasizes, evokes strong feelings, and creates lasting impressions. As a figure of speech, it is usually not meant to be taken literally.
When do opinions become exaggerations (representing something as better or worse than it is)? And, when do exaggerations become good old-fashioned lies? In today’s hypermedia media world, the answer is not clear.
In the supply chain world, where operations require more black and white than gray, there is little room for exaggeration. Only facts matter when rubber hits the road. Yet, the tentacles of hyperbole wrap around many of my conversations with clients. Here I give two examples from my news feed this morning:
Is the Coronavirus Good for the US Economy?
Sit back in your seats and watch. We are about to get a detailed education on the intricacies of the global supply chain. The impact of the Chinese Coronavirus outbreak will be long and lasting. While American politicians predict that the virus will have a good ending for the United States, don't bet your next bonus on this prediction. Make your own judgment.
Chinese factories are shuttered. Slowing markets will have a profound impact on corporate balance sheets. Gone are the days of regional supply chains…. And, supply chain leaders are not as prepared to manage the impact of the risk as many believe. Only 30% of companies know the location of their second and third-tier suppliers. Recovery is going to be long and knotty.
In the coming days, we will see the Ford story from Thailand floods replayed. Unfortunately, we do not learn much from history. In 2011, disruption to one of Ford’s second-tier suppliers during Thailand floods idled global production for one of its most profitable product lines. Driven in part by greater global trade and the adoption of lean operating principles, Ford’s operations were global with little in-house working inventory. They learned that their second-tier supplier had an issue when the critical parts for the manufacturing did not arrive on time. The team was caught by surprise because they did not know the location of the supplier. I predict that this will be the story. Over and over again…. The intricacies of globalization, as shown in Figure 1, increase organizational risk.
Risk management is much, much more than a pretty control tower or a piece of software. It is a business fundamental. In the next few months, many businesses will learn this the hard way.
SAP and the Network of Networks?
You know the old joke, “What is the difference between the promise of a used car salesperson and a software technology sales team?” When asked, most will awkwardly try to stumble into an answer. The answer is simple. It is funny but true. The answer? The used car salesperson knows when he is lying whereas the technology sales/marketing team does not. Such is the case with this Forbes article written by Paige Cox, Senior Vice President and Head of Digital Supply Chain Networks Development at SAP SE.
Poor Paige. She is either ill-informed or lying. SAP is the least capable to deliver a network of networks of the Supply Chain Operating Network providers. Does it matter? SAP’s lack of innovation in network inter-operability is an opportunity cost to the market. It is particularly painful for the organization that is aligned to SAP as a standard. Companies without market data and interoperability within networks will struggle more with disruptions like the current China virus.
How do I know? For the past four years, I have facilitated a group to build a network of networks. In the group, company-after-company using Ariba has attempted to work with SAP to improve interoperability, but failed.
Today’s Supply Chain Operating Networks have little to no interoperability, and SAP Ariba API’s are more closed than competitors. While other Supply Chain Operating Network companies—Elemica, GTNexus, and Nulogy—are attempting to work together to improve interoperability, SAP, along with IBM and E2open, are not at the table. SAP and E2open are invited to work with the group, but they have chosen to not participate. Each is focused on their own efforts to drive sales of their own solution ignoring the need to drive interoperability. In fairness to Paige, there are many SAP’s within the SAP organization (silos), and hyperbole is rampant.
Today’s technologies improve processes within the four walls of the enterprise. The focus is on functional excellence. SAP purchased SAP Ariba in 2012. It is a purchasing technology. The platform, built as a portal architecture, is cumbersome. It is designed for indirect procurement. It is not suitable for direct procurement. The difference? Direct procurement is based on a bill of material connected to manufacturing planned order.
The problem? Figure 2 is poorly drawn representation of today’s application deployments. The supply chain systems are deployed in silos with a limited workflow between sell, deliver, make and source processes. The systems, as deployed, have many twists and turns (bear with me, the squiggly lines were drawn in the United Club on my way to a client), and there is no interoperability between Supply Chain Operating Networks outside of the enterprise. Contract manufacturing, procurement, transportation, and market demand data and solutions operate in islands. The enterprise connectivity with market data is limited. Most is not usable. Today’s processes are inside-out. In the digital evolution they become outside in and the Supply Chain Operating Networks drive insights across the functions. However, as this happens, people wake up and find that the enterprise solutions deployed over the last two decades are legacy. The reason why? There is no place to put Internet of Things (IOT), unstructured data, market sensing and contract manufacturing workflows in the current systems.
Your thoughts? I look forward to hearing your feedback.
VentureOutsource.com EMS Manufacture Risk-Rewards Analysis
4 年Building online, mfg networking community conveying real value to users, encouraging exchange of knowledge and interactions takes focus and time. Growth drivers for work OS, web-based intranet platforms support the rise of collaboration tools, but SAP Ariba has fallen short in the contract manufacturing sector for some reasons Lora details here, not withstanding importance of BOMs. Manufacturing digital transformation business use case is shifting workplace environments and the way teams and remote professionals work in manufacturing. Covid-19 is forcing some of these changes in the marketplace faster and its likely SAP Ariba will lose more relevancy, being unable to innovate.
Helping companies to plan and execute better.
5 年Hello Lora, your posts are always very interesting. I wonder why SAP is a constant topic in your posts. Your critique to SAP is very direct, but I believe this is the first time I am reading that you call someone as either incompetent or liar. I wonder if there are perhaps other explanations to the statements of the SAP folks you do not agree with....? :-) Looking forward to reading something soon on other software vendors....
Interesting thought. The power is shifting to the individual consumer. The interoperability of data owned by the individual consumer is becoming a fact. A lot of small data and small stories are hitting the road and a new collaborative story is unfolding. Is there still room for the concept of "enterprise", the concept that a lot of solutions are serving? I do doubt it.
Almost every big player is living on its own island as a way to control their kingdom. Interoperability is seen as an invasion towards their sovereign state, hence the reluctance to create open processes within open systems. It is a feeling like in the dark ages where you would never open the gates of the city walls when a strange army is marching in. The reluctance is more driven by a feeling whch I can describe best with the following "who are you to tell me that I should be acting in this way?". And the "acting in this way" can be defined in whatever you want. So we will never have open processes open systems, we will still be living on our islands and we will still have closed gates if we do not try to answer this "who are you?" question. The legitimacy needs to be answered before the relavance otherwise we will be turning into a dead end. Legitimacy can only be derived by knowing with whom you are dealiing with, not describing the reality or the why, but by describing how the partners stands within this reality. And I know you could ask what all of this has to do with supply chain as such. My argument would be everything, as open processes and open system can only be derived when legitimacy is there and found.
? Supply Chain Innovator ?
5 年The extent of the fallout of the coronavirus on global supply chains is a big unknown. My guess it will be much graver for much longer than most people are willing to believe right now. And certainly not helpful overall to US companies and consumers. Thanks for another thought provoking article Lora!