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Supply Chain Pain Supply Chain Software Pain Points and How to Avoid Them

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 By Rick Cook

"Everyone knows" that implementing Supply Chain Management software involves a lot of pain for the organization. Actually that's overstated. While implementing supply chain systems can be excruciating and even the best-run projects will involve some pain, the process is often much more painful than it needs to be because the implementers don't put enough emphasis on a few of the most strategic steps.

Here is what to do to minimize the pain of an supply chain software implementation.

Start with a Plan

The more time and effort you spend on planning every detail of your supply chain software implementation, the more smoothly the implementation will go. Planning must involve all stakeholders, including supply chain partners, and culminate in a comprehensive project plan that can be modeled or manipulated much like a supply chain process. A good project plan will revisit the work breakdown structure regularly, identify variations early and include remediation plans to resolve variances.

Good project plans are a precursor to achieving forecasted expectations. The simple fact is that the better the project plan, the fewer the surprises.

Train and Then Train Some More

Despite the norm, application software training should never be considered a one-and-done effort. Supply chain management isn’t just about software and business processes, it's about people as well. People at all levels of your company need to understand what is going on, how the system will work and how they will use it. That means multiple training programs on the business system and business processes.

This is particularly important because the people who should be implementing your supply chain system are your employees. Outsiders such as consultants should be available to deliver expert advice and help the process run smoothly, but in the most successful supply chain software implementations the hands-on training is done by the employees. It's a best practice to stage a multiple phase training curriculum, beginning with a Train the Trainer approach, then advancing to classroom training, then to small group or individual training, and finally to offer online or computer-based training.

Training budgets are notoriously under-estimated. Review your software training budget and recognize you probably need to increase it. Thorough application software training not only avoids problems in implementation, but it also builds user confidence, accelerates user adoption and helps get everyone on board the project.

Think Of Everything

Okay, you’re not going to think of absolutely everything, but the closer you can come to it, the more smoothly your project will go.

Supply chain software deployments generally incur business process redesign in conjunction with the software implementation. Everything in the supply chain flows into something else and nothing stands alone. This produces huge efficiencies, but it also makes it difficult to add things you’ve forgotten, especially after you’ve gone live.

Consider the case of a near legendary retail chain that implemented a major supply chain system. Under the inventory, stock levels of most items were specified and stores were automatically restocked when an item fell below its inventory level. Which is, after all, how even a basic inventory control system is supposed to work.

Unfortunately in designing the business processes, the company forgot to allow for shrinkage. Since the chain was running fairly large stores with an absolute minimum of staff, there was a lot of shrinkage and there was no process to report it to the supply chain management system. As a result stores soon found they were low or completely out of small, high-value items it was easy to walk off with and they had no way of replenishing the stolen items. The net result was a spike in stockouts for some popular high margin products. It took a long time for the chain to correct the problem and in the meantime “SCM” had become a four-letter word to the managers and staff at the stores.

The lesson here is that in designing business processes to work with supply chain software, you should consider every possible inflow and every possible outflow. The second lesson is as much as possible you should have a mechanism for correcting unforeseen problems without compromising the constructs of the supply chain system.

Stay Involved

Supply chain software implementation is emphatically not a hands-off process. It needs constant, high-level involvement and executive oversight to deliver critical guidance and make sure it doesn't go off the rails. Depending upon the scope of the project, a steering committee may be advised.

Don’t Let The Schedule Slip

There’s one very useful piece of information you should include in the initial cost/benefit analysis of your implementation. That is the additional cost per month for every month you fall behind schedule. Usually it's a pretty large number and it makes an excellent talking point when someone wants to solve a problem by slipping the schedule.

Don't. Scope creep kills projects. Schedule slippage is one of the worst things you can do, even if it seems to solve an immediate problem. It saps morale, runs up cost and makes it more likely the project will fail.

Of course this leaves the problem of what you do when you get in a bind. The first answer is that if you planned realistically and have been watching the project like a hawk (as you should – see previous point) you’ll be able to catch problems while they are still small.

And if you don’t? Well in general there are three inputs into an SCM implementation: Person-hours, Schedule time, and resources. For the most part you can trade one off for the other two. So if you intend to stay on schedule, you can usually do it by increasing the person-hours and resources for the project. For example you can bring in outside employees to take some of the load off the people working on the project. (Don’t add them to the implementation staff – use them to free up the staff members’ time). Or you can throw more resources at the project. But don’t slip the schedule except as an absolute last resort. End

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Scope creep kills projects. Schedule slippage is one of the worst things you can do, even if it seems to solve an immediate problem. It saps morale, runs up cost and makes it more likely the project will fail.

 

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