Implementation Aspects of SCM

September 27, 2003

Shyam Bhaskar

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SCM Project Impact

SCM implementation is one of the most
difficult projects a company undertakes.
If it is implemented right, it will have a huge
savings.
If not, it can even break a company.
Quotes from Lee Pender, CIO, July 15, 2001

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Successful Implementation Factor T

A story is told in Cambridge,Massachusetts:

A young man, obviously a college student, is
unloading his purchases at a super market
checkout counter. A large sign above the counter
indicates that it is for customers with 8 items or
less, but the young man has at least twenty. The
clerk tells him, You either go to MIT and you
cant read, or you go to Harvard and you cant
count.
Jeremy F.Shapiro, Modeling the Supply Chain

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Factor T of Implementation
A successful implementation of an SCM
project needs both
Breadth of knowledge (Managerial)
and Depth of knowledge (Technical)
T in Technical and Managerial education was proposed by U.Wemmerlov, Professor, School of Business, UW, Madison

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Skill Set for Success

Technical Know-How
Domain Knowledge
Change Management
Project Planning and Execution
Handling Execution Blues

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Technical Know-How
Analytical Front
SCM modules
Multi-echelon systems
Large-scale optimization
Development Front
Design of software
Data Management, Scalable design, Speed, Quality of solution

User Interfaces
Integration w/ other modules and external systems
Standards like RosettaNet

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Domain Expertise
Understand peculiar problems specific to an industry
No standard BOM in Automotive OEMs
VMI in Retailing
Kits in Tech sector

Customer is the king vs. customer doesnt know a

thing
Some would want to be the first movers. Others follow the
eaten apple strategy
Benchmark studies
Competitor info

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Change Management
Unfreeze Change - Refreeze
Strong motivation for change Create a sense of urgency
Opportunity assessment
Goals, Gap analysis, Pareto analysis, zero-in on the road-map of
execution

Value analysis
Quantify benefits using measurable metrics like ROI, Inventory
reduction and Lead time reduction*

Early Buy-in
Demonstrate the impact
Influence of culture: Strategic thinking of the West vs
Execution as the strategy in the East
*Sadagopan,S. Enterprise Applications Forecast.

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Change Management
Successful change management
Political sponsorship - Top management involvement
Conflict resolution Top-Down vs Bottom-Up
approaches
Expectation management
Some customers expect a radical re-engineered process and at
the same time expect status-quo!!

Resistance to change
Employee reluctance
Job security
Time management Regular job tasks + tasks for SCM project

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Project Planning and Execution

Big Bang vs Incremental Blitzkrieg Implementations
Big Bang
Comprehensive, large scale (all modules) solution
All requirements delivered
All implementation problems identified, corrected and the end user
gets a complete solution.
Long lead time before actual use
Incremental Blitzkrieg
Focused, mini-scale, result-oriented go-lives
Requirements added incrementally in each delivery
User goes into action quickly
Transition problems more severe in the initial deliveries

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Project Planning and Execution

Rapid Implementations
Where to start
Splash effect, data availability, ease of
implementation, urgency of needs, solution
availability, etc., are some ways to prioritize

How to reduce the time to implement

Prefabricate
Tailor-made industry specific solutions
Examples : i2s industry templates, mysap.com

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Project Planning and Execution

Rapid Implementations
How not to digress

Solution planning as the first step in implementation

Sign-off on the project scope
Identify few key performance metrics to evaluate the project needs
Dont deviate from softwares pre-established blueprints (fit
organization to the software)

How to manage data

View data as a critical resource *
Provide specificities of data needs as much as possible to the users
*Levitin, A.V. and T.C.Redman, Sloan Management Review, Fall, 1998.

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Execution Blues
Typical pain points From the eyes of the user
Solution does not work as expected
Performance (speed) is not satisfactory
Too much of work on data management
Too much of work outside the software solution
(pre-process, post-process, UIs)
Too little gotten for too much of money
Over budget and time limits
Show me the value
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Execution Blues, contd

Typical pain points From the eyes of the solution provider
Requirements keep changing
Turnover of project members
Composition of the team Not enough, not right
Not enough support from the top management no change
champions
Issues in data access, quantity and quality
Nit-picking by the users
Restlessness of the users
Resistance to change

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Handling the Execution Blues

SCM projects are Socio-Technical Systems
Successful implementations have various
dimensions

Art and Science

Qualitative and Quantitative
Technical and Managerial
Effective communication and Networking
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What to Add to the Curriculum

Technical Knowledge
Technical emphasis - Problems in OR, Software project development and
Bottom-line analysis

Domain Knowledge
Research, Benchmark studies, Guest lectures, Industry visits

Change Management
Case studies, Socio-Technical System studies

Project Planning and Execution

Managerial topics esp Project Management, Case studies

Handling Execution Blues

All of the above + Working in teams, Presentation, Class Participation and
Report Writing

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Discussion Points
Challenges
Will SCM be offered as a single course or as a set of courses?
If one course - Do we have enough time to cover all the topics?
If multiple courses Do we have enough material to justify a
full set of courses?

Do we have material available eg., on domain

knowledge, heuristics?
Can students (mostly with no industry background)
appreciate the issues?

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