The supply chain software market is characterized by unfair competition between the big firms and the smaller firms. This reduces quality, increases prices and results in oligopolistic competition. Mergers and acquisitions and the co-option of advisory firms by the major vendors are major factors which allow this inefficient market to continue in its current state.

Structure of the Supply Chain Software Industry

The supply chain software market is considered by both those outside of it, and most that touch it in some way as quite competitive and dynamic. However, after reading through the history of the industry, I have come to a different conclusion. What I describe below is how the industry is actually quite consumer unfriendly (the consumer being the company which purchases this type of corporate software)

The Effect of M&A Activity

Mergers and acquisitions in this area of supply chain software are frequently heralded as positive events in the business media that seem to only quote the representatives of the companies involved in the acquisition or analysts, all of whom are strangely positive on the development. Contrary voices are generally not given a forum. However, mergers and acquisitions have a very poor record in extending the functionality of the company that is acquired and don’t seem to do anything except concentrate the marketshare among a smaller group of companies. Mergers appear to be approved even when there can be no conceivable benefit to customers. As an example, Oracle has purchased a number of leading supply chain vendors (Red Pepper, Agile, PeopleSoft) however still lacks a leading supply chain suite. This may have to do with how Oracle handle’s the acquisitions. Larry Ellison (CEO or Oracle) declared that he was going to “kill” PeopleSoft applications after the acquisitions and replace them with Oracle. He evidently spoke to his lawyers after this comment was reported in various media outlets and learned that acquiring a company in order to shut down its offering and capture its customers is against US anti-trust law. Overall, this merger and acquisition activity acts as a serious retardant to a free and competitive software market in supply chain, as the acquiring firm tends to envelope and reduce the emphasis in the market of the software that they acquire.

We made this little graphic to describe what seems to happen to software after it is acquired by Oracle. Its a little joke of course, based in truth, but we don’t think Oracle will mind our use of their trademark.

Unnoticed Anticompetitive Behavior

We interpret the supply chain software market is very different from much of the literature that we found on the topic. Part of this may have to do with the fact that this site is a non-commerical blog and does not sell advertising. However, to read so much literature on the industry, and for none of it to point out how monopolistic many of the larger companies are in fact, and how monopolistically they behave is perplexing to me and brings up the topic of editorial freedom at periodicals that cover this industry front and center. In a way it is as if the authors either have never heard of anti-trust legislation and do not see any of the inefficiencies that are quite apparent. The following quote from InfoWeek is symptomatic of this unquestioning adherence to concentrated power.

ERP vendors such as Oracle, PeopleSoft, and SAP have been adding supply-chain elements to their product lines to help fuel growth in a slow-moving market. These vendors enjoy the advantage of providing systems that control other back-end functions and the data they generate. Some businesses hope the ERP vendors will be able to provide a single integrated system throughout their companies. - InfoWeek

Apparently unnoticed by InfoWeek is that all of these firms are oligopolies, and the “advantage” that they enjoy is referred to is the “lock-in” of already being in the account. Secondly, much of the integration that is discussed here is quite overrated as integration is not at all as difficult as proposed by the large vendors. Thirdly, that is not the only advantage the larger firms have, they also have co-opted the large consulting companies who also advise (and are compensated) based upon the selection of large software vendors offerings as their practices are configured around the major software vendors. However, what InfoWeek clearly chooses not to mention is that the result of this anti-competitive behavior is that companies end up with inferior solutions over smaller firms that typically offer more targeted and capable offerings in their specific niches. How does any of this serve the customer? These topics are simply un-raised by analyst firms and by periodicals like InfoWeek and can be attributed to the desire not to burn bridges and by the fact that the major software vendors and consulting organizations are advertisers.

Why do analysts and those that cover this topic think that a few oligopolies providing software is a good natural ending state for the industry.

Understanding concentrated power is found by a visit to the Duomo’s palace in Venice. Venice was the longest running stable political system lasting roughly 1000 years. The paintings inside of the Duomo’s palace explain why. The paintings depict over and over how the Venetians maintained a series of checks and balances that was and continues to this day to be unparalleled. The Duomo (the leader of Venice) was watched by 5 to 7 procouncils, who were in turn watched by another layer, who were in turn watched by a larger layer. No one during Venice’s reign was allowed to overly concentrate power, and this lead to stability and prosperity for Venicians who maintained a thriving society based upon this stability. Why does every generation need to relearn that concentrated power leads to negative outcomes?

Another quote from InfoWeek explains the promotional nature of this periodical, and others like them.

Supply-chain software is a well-established market that tops $5 billion (AMR estimates $ 2 billion for supply chain planning and $3 billion for supply chain execution) in sales annually–with room to grow, according to current market research. “It’s still, believe it or not, immature,” says John Fontanella, an analyst at AMR Research. That’s because companies haven’t nearly exploited the potential inherent in supply-chain technology. “The [majority] of companies I talk to still feel that they haven’t gotten control over their supply chains,” Fontanella says. - InfoWeek

In our view this AMR comment obscures the point (AMR is one of those analyst firms that has a poor record of predicting trends or in helping end buyers differentiate real products from vendor marketing material.) The issue in supply chain software is not that more necessarily needs to be spent, it the how the money is spent and where it goes. There are too many overly complex projects that simply have selected the incorrect solution and/or incorrect set of software modules because of non-efficient market competition by the largest vendors. Mismanagement of supply chain projects is a significant reality, and the best information is often not getting to clients. Because of this companies are wasting many many millions, if not billions of dollars. We would not be surprised if at least 1/2 of the $5 billion is used on incorrect or suboptimal software, which should have instead gone to a different vendor. This is supported by our own observations working for many years on supply chain software projects, but also from looking at rather mediocre solutions that flourish in the marketplace.

Conclusion

The supply chain software market is not at all what it appears. Large software companies have overwhelming advantages which acts to overcome what is in many cases a mediocre solution. I have seen this repeatedly on accounts when inferior software is selected when many other better alternatives are readily available. However, as with other industries, the bulk of the innovation comes from smaller companies. However, the purchasing of these companies by the software behemoths essentially brings that innovation to an end after the company has been purchased. Overall, the industry could benefit greatly from attention from the Federal Trade Commission, and for the breaking up of the largest supply chain software vendors, examination of the relationship between large vendors and large consulting organizations, and the rejection of further mergers.

Companies can greatly reduce their risks of implementations by looking at the history of supply chain software. That is what we have done, and provided several of our findings here.

Background

While doing research for a book I performed research on the history of supply chain software in order to understand to place SAP SCM in a broader context. That chapter did not make the final cut of the book, which is why I will be publishing portions of it in future posts at http://www.sapplanning.org. However, for those looking for an overview of the conclusions, I have written this post which is less specifically focused on SAP SCM, and instead discusses supply chain software generally.

Features of the Supply Chain Software Market

The supply chain software market is a hodgepodge of firms and functionalities that span supply chain execution to supply chain planning. Execution being focused on short term operational decision making (i.e. warehouse management and replenishment) and long term planning (i.e. demand planning and supply planning). It was one of the later software markets to develop, significantly training the development of corporate finance and sales order recording software. The market includes such nuanced software concepts as engineering change management and supplier collaboration, however, the bulk of sales is still in the more basic forms of software. Here are some of things we found about this market.

1. There is very little written about the history of the industry in either book or magazine form, thus I had to write my chapter with very little assistance from a comprehensive source, but rather had to piece together the history from old articles and my memory.
2. Some of the highest profile articles that I found over time were from analyst firms. However, most of the analyst firms who cover the supply chain software are generally quite inaccurate in their predictions. In fact one of the few accurate analyst firms was Gartner.
3. Software purchasing companies do not seem to learn from its mistakes. The market does not maintain a historical culture of looking backwards and seeing what worked and what did not. Instead, new ideas and applications are brought out and simply replace old ideas and applications that were not successful. However, this is only apparent if one studies the history in this area. I was surprised how I had forgotten all the different vendors and concepts that had come and gone as the years went by.
4. Statistics are hard to come by. I know that different classes of supply chain software have different like-hoods of success. However, most companies most often move forward with implementations without any sense for their likelihood of success.
5. There is an predisposition for a great deal of “slack” to be cut for large companies over smaller software companies, even when the large company only promises the solution, while a smaller company already has it (i.e.. the Microsoft effect). The ability of the market to match customer requirement to the right vendor is weak. Decisions are controlled by advisor gateway firms that move customers away from smaller firms. Therefore the market can be quite inefficient, primarily due to the influence of brokers. (If the US is serious about having innovative software markets, it needs to be concerned about this lack of market efficiency)

Slowness in Adopting New Techniques

As with many other categories of software, supply chain software has been extremely slow to take advantage of SaaS or hosted solutions. Hosted solutions offer huge advantages and vendors such as Arena Solutions (a small company) offer online test drives of their software demo box which can be accessed directly from the web. Arena actually offers bill of material software, and the hosted solution works perfectly for them, however, another area of supply chain software, which greatly benefits from hosted solutions, does not seem to have a credible offering in this area. This is supplier collaboration, a sub-category of supply chain software which is entirely collaborative and requires multiple users from different companies to sign in to a shared environment. However, even in this highest potential of area, there are precious few hosted solutions. Rather the current approach is to have the company go through all the hassle of installing the software on their servers and then performing point to point integration with multiple suppliers or other business partners. This is the hard way to do it, and part of the reason supplier collaboration is such a high risk implementation is the software architecture is so inappropriate for the need. However, hosted solutions can help improving supply chain implementations in many areas, yet vendors are not rolling them out. Why not? This deserves more attention.

Key Lessons From Implementation History

Now that we have provided background as to the history of the environment, we want to move on to discuss some of the conclusions from studying the history of implementations. We have taken the following key lessons from our reading of the history of supply chain:

• Input does not equal output. Many new software application types are rolled out, but without having a majority of companies mastering basic functions such as maintaining forecast data properly.
• Companies do not put sufficient effort into master data maintenance, even through the results of supply chain software can only be as good as the inputs.
• Not all companies are ready for advanced software that they attempt to implement
• In the supply chain planning space, optimization has rarely reached it potential, and is most likely overkill for most companies.
• Software can not make up for deficiencies in operations or in skills. The more advanced the software selected, the more training and capabilities the users need. The desired business outcomes result from a combination of the appropriate software being selected, from its correct configuration and housing (i.e. hardware) and support along with training up or hiring the right personnel to support the software and processes selected.

Conclusion

Looking at history many decisions become much easier to make. The history of this area is relatively unexamined, and this may have something to do with the forward looking nature of the industry, but also a disinterest in part of some parties that have a financial interest in not communicating what has come before.

References

http://www.informationweek.com/news/software/enterpriseapps/showArticle.jhtml?articleID=22100192

We thought we had finished our Fishbowl review, but we found something of interest that we wanted to highlight separately because it is important functionality. This is the Auto Reorder Point which is available within the part view the Fishbowl Inventory software (for an introduction to Fishbowl, please see the previous post).

You can get to Auto ROP by selecting the part view and then selecting the button in the upper left part of the screen.

This brings up the selection to run the Auto ROP for all the parts, or for just some of the parts. We will select all of the parts.

Date Range

Next we want to select a period of time for which the ROP will base its calculation. We will choose last month, but we could select the past 3 months or further back. This selection would depend upon what type of parts we are selling of course.

Weighing History vs. the Forecast

Now we can choose whether to considering increasing or decreasing sales by forecasting percentage. This selection comes down to how heavily we want to weigh the past vs. the future. We will choose a Forecast Percentage of 50%, so that we weight the past and future expected values evenly.

Input Data

This next screen really showcases Fishbowl’s strength, transparency and education. Fishbowl asks for inputs for lead time, safety stock and basic stock, which will allow the system to perform the necessary calculations. The safety stock and basic stock are asked for in terms of days instead of in terms of units. This allows the system to decide what the units should be. However, where this screen excels is in explaining what the system is doing to the user. This level of transparency is unheard of in SAP or Oracle. Instead different inbuilt help must be used, but in neither system is the help as easy to find, nor are the instructions as straightforward as what is listed here in Fishbowl. If the user knows this already, then they can breeze past it, but its there for new users, or for users who have not seen this transactions for a while or just need a refresher on what the system is doing.

Order Up to Level

Now the system asks for the order interval. Now this could have been placed on the previous screen and saved space, however, then there would not have been room for the explanations. The explanations on this screen very clearly state what the Order Up to Level is composed of, and then asks for the user to enter the order interval, so how frequently the company is interested in placing an order for this item. This is important because this is the practical constraint. Consistent order frequency helps with supplier management (everyone likes consistency), and with order management. In this way different classes of suppliers can be placed on different intervals. The interval can stay the same, but the quantity can change. For very low order quantity suppliers, the interval can be lengthened in order to keep transportation costs low, and as a percentage more inventory should be carried on average. (please don’t email me about how inventory is “bad.” This is not a blog on JIT, Lean or other topics that interest people or strategy consultants who have no background inventory management.)

ROP Results

Next we move to the recommendations. Fishbowl has created the calculations and provided the ROP recommendations for the entire part database.

Conclusion

Its hard not to be impressed with this functionality. Calculating ROP values is very important. The fact the Fishbowl makes it so easy means the ROPs can be frequently updated with very little effort. We also liked the fact that Fishbowl explains what is happening throughout the input process, rather that treating it as a black box.

Open Source ERP?

There has been a lot of discussion regarding open source ERP. This movement is designed to rebel against the highly proprietary ERP software which is currently implemented and seeks to provide a more transparent solution the ERP market. After having reviewed various open source ERP initiatives, I did not come away overly enthusiastic about any of them. While open source is a nice concept, it has lead to relatively few real marketable solutions. Linux is the preeminent example, and Firefox is another. However, there are an number of browsers that compete with Firefox such as Chrome and Safari that while they do not have the developer community that Firefox does, are still great alternatives to Firefox (I use all three). However, it would seem that whether a solution is open source is less important that whether it is reasonably priced and highly functional. I have come across just such software for ERP. It is not an open source project, but is both reasonably priced and highly functional. It is called Fishbowl Inventory Management and it is billed as a way to integrate operations with Quickbooks. Fishbowl is not called ERP software on their website, however, to us that is what Fishbowl is emulating, but in a more simplified way. In our mind Fishbowl is mini-ERP. What immediately became apparent to us was how easy it was to use and how transparent the system was. Getting data on other ERP systems is a chore, compared to the ease of doing so with Fishbowl.

Becoming intrigued with Fishbowl, we decided to take some screenshots as we navigated the system, and we will discuss it here. Fishbowl has two software products (Inventory Management and Mobile Warehouse), and they also sell scanners for the warehouse and POS devices for the storefront that integrate with their software. We will just be looking at the Inventory Management software in this post.

Dashboard

Before we go any further we wanted to show the Dashboard. This is some of the most common transactions listed on one screen.

Reports

Fishbowl has a number of pre-configured reports. They appear to push out to a PDF or PDF type file. The reports are classified by area such as “Purchase order” or “RMA,” and can be selected from the series of folders on the left side of the screen.

Product

The product view is for finished goods, while the “parts” view is for the subcomponents of the finished good. However, Fishbowl does not have to have a finished goods. That is every finished good would be stored as a product or as a part if the company does not perform any manufacturing.

The general view shows the product, its price, class and whether it is active and taxable. It also has a detail text area, and an ability to post a photo.

Product substitution is easy to setup by going to the substitution tab and simply setting up a new product.

BOM

Fishbowl has a very easy to understand BOM screen. It shows the finished good with one icon, and then below it the raw materials or parts with a different icon. Each of the parts can then be selected and your will be taken to part record. This view is so simple, that we wish ERP vendors would take a look at this and see how easy it is to make logical BOM screen.

The default locations tab shows details such a what location group it belongs to and its location group, which is SLC – which stands for Salt Lake City (Fishbowl is based in Salt Lake City). Location group is used in the demo system to be the physical location while the location is the sub-area within the location (inspection, returns, etc..). So this shows that this material is set for inspection in Salt Lake City, but for Returns in LA. It is not setup, or extended for Miami.

The supply network that is in the demo model has three physical locations (called Location Groups): LA, Miami and Salt Lake City. You can see this easily by viewing the Locations tab in the Setup screen (which is where much of the master data is entered). As with all the master data in Fishbowl, it is amazingly easy to setup.

This brings up the topic of navigation. Any opened view, that is not closed is kept at the top of  the screen in a tab. The tabs also can be viewed vertically by selecting the right top button next to the tabs. The following screen will open.

This allows you to keep tabs open and to switch back and forth between the tabs. However, the tabs can not be moved around (as with the tabs in Google Chrome) and two user interface instances can not be created (which is useful if the user has multiple screens). These would be nice things for Fishbowl to possibly build in the future. But the navigation with tabs that they currently have is still quite nice.

Parts

Parts, also area easy to create and easy to change and the part master has a large amount of information that is easy to get at.

The same inventory screen that we show in just a few screenshots and is available within the Inventory tab here. Fishbowl here is following a best practice of displaying the same information, but in different areas.

The vendors tab shows who provides this part.

Selecting this item brings up the vendor record.

Another very easy feature to use is setting the reorder point and the reorder quantity. This can be done by selecting the line item in the same Inventory tab.

If you select it a dialog box will open, and you can make any changes you see fit.

Inventory

The inventory screen shows all that one needs to know about inventory. It show incoming as well (on order and committed). Thus Fishbowl holds the concept of blocked stock, as well as the concept of allocated. (However, allocation is a sophisticated concept which can mean a couple of different things. We were unable to find the specific definition of allocated in the online manual for Fishbowl Inventory Manager, even though they

It even shows where each of the inventory quantity is in all of the locations.

Double clicking any one of the line items shows the actual serial number.

This serialization would have to be supported by having bar code capable readers, and possible integrating with Fishbowl Mobile Warehouse (or at least we would think). Fishbowl offers out of the box integration with a series of readers that can be found on their website.

Monitor

Any ERP application will have the ability to create alerts, and Fishbowl has this as well. Here in the Monitor view, we are creating an alert for the part number 0001-SRV, and we will be watching it for My Location Group, and the alert will initiate at an on hand of 10. Right now, it appears that only on hand levels can be monitored and create alerts from.

Sales Order

The sales order is easy to create.

All I have to do is select the “New” button in the upper left hand corner.

You will be brought to this screen. You can then see the inventory as you are creating the sales order. Since there is no on-hand, if I create this order I will end up creating a backorder.

The product tree can be viewed by selecting the “Product Tree” tab to the left of the screen. This is all of the products that are in the Fishbowl database. This is a truly powerful view that I do not recall seeing in other software. The ability to create multiple levels of nesting would allow a rep to provide many different alternatives to a customer, and would allow for them to navigate to them, and see the relationships all in a very small space.

On the bottom off the screen, if this product is desired, it can be easily added to the sales order by selecting the “Add to SO” button, or by simply double-clicking the item. I created this sales order below with all these items in just 15 second.

I can add discounts by selecting the button on the far right (out of screen shot view) and if it save it, and then issue it, I have created a sales order.

Customer

Customers can be easily added.

Pricing

Pricing is a particularly tricky feature in most ERP systems. However, Fishbowl simplifies it greatly. We were able to create a pricing rule ourselves in a just a minute or so. This pricing rule can be applied to everyone, or just to a specific customer or to a customer group. Likewise, it can be applied to a product, all products or a product tree. So this takes care of many of the scenarios for pricing that come up at companies.

The advanced tab controls the dates and quantities for which the pricing rule should apply.

Discount

In addition all the pricing functionality listed above, specific discounts can be setup in the discount view.

Purchase Orders

To see the inbound material, one goes to the purchase order view. The purchase order easily shows the many line items on the PO.

The detail tab gives most of the rest of the specifics.

Manufacturing Order

Fishbowl has the ability to schedule manufacturing or production orders. This screen, the general tab, associates the sales order to the manufacturing order. Showing the direct “pegging” in this way is extremely convenient.

The materials tab of the manufacturing orders shows the bill of material, and provides a very easy way to get to the individual parts by simply selecting the parts hyperlink.

Search

One of Fishbowl’s strengths is the ability to search. The demo that used did not have a need for this because there were not many items in it. However, in production, this would be of great use.

This search box is available in most of the views.

I now search for product F102 by simply typing it in.

Making Changes in Fishbowl.

One thing that we noticed was that the data was extremely easy to change. However, we were curious as to how data can be locked and how Fishbowl manages muti-users. Fishbowl allows the creation of new users and can limit their access by category. In the example below we have created a new user and only given them access to purchasing and receiving. Once again, it is amazingly easy to create users in as with other new data in Fishbowl.

When we login under the username we just created, the things I could change were much more limited.

Conclusion

Fishbowl is both highly functional and actually fun to use. It is a perfect solution for small and medium business. In fact, I would recommend that clients that are plan to implement standard ERP such as SAP or Oracle, first try to implement on Fishbowl. This could be done for a segment of the business, and used in more of a testing phase. It is a fantastic way to explain the concepts of ERP in a much more approachable way. It is also incredibly easy to use compared to traditional ERP. Considering the exhorbinant pricing of most major ERP systems, the fact that their interface is so less functional than Fishbowl Inventory should really make them ashamed of themselves. I have personally training people on ERP implementations and seen how poor interface design severely reduces the ability of users to both do their job, and understand what they are doing. This is one of the reasons for the company’s name — that using their software provides such visibility that it is like looking at your company through a fishbowl. After using the software, I would have to agree.

There is really no reason the other ERP firms could not create an interface that is this logical and usable. According to the Fishbowl website, an installation averages $50,000, which is a pittance on a typical ERP project and can definitely be justified as a user training. Just the software for 20 users would run roughly $25,000, but Fishbowl can be used by as few as 2 users, which brings the price down to under $5,000. These are one time figures, not yearly charges, although I would assume that in the future there are upgrade charges, but I was not able to determine that from their website.

Collaboration and SaaS

In our previous article, we discussed the benefits of web enabling supply chain software.

http://supplychaininnovation.wordpress.com/2009/05/29/web-enable-supply-chain/

However, related to web enablement is the concept of SaaS or software as as service (aka on demand, hosted solution etc.). We think the SaaS model is the right model for a number of reasons, and we predict that eventually companies will stop hosting their own solutions (except for things like finance) and will increasingly begin to move to the SaaS model. However, if there is a category of supply chain software that is really perfect for the SaaS model it is collaboration. In this category of software, the buyer wants to integrate with suppliers and have the suppliers actually log into the system. Thus it makes little sense for the initiating company to host the solution themselves, but rather to find a solution that is dominant in their sector. Suppliers for their part do not want to login to multiple systems, so if a large number of their customers are on one or two SaaS solutions, this works out best for them.

Exostar, the collaboration service provider, makes some very good points about the benefits of the SaaS model for supply chian collaboration.

Excerpt from Exostar White Paper

In the software-as-a-service world, many of the thorniest problems facing crossenterprise trading partner teams attempting to collaborate in a geographically distributed environment can be mitigated by offloading responsibility to the firm hosting the solution. For example, company and user on-boarding services can be executed by experienced personnel to efficiently and seamlessly incorporate new users from all constituencies, regardless of volume. Similarly, the hosting company can oversee external trading partner identity management functionality, ensuring that once users have been on-boarded, they are properly authenticated and can access only the documents and data to which they are entitled. Access permissions are assigned by qualified administrators, allowing the roles and projects to be managed in line with changing business requirements. The software-as-a-service approach offers a number of other advantages over its licensed counterpart. Companies no longer need to incur the capital investment of product purchase, only to be followed by additional monetary and time investments in solution implementation. With the hosted model, companies only buy what they need, when they need it, and the firm hosting the solution can provide all required implementation and configuration tasks. Likewise, the

maintenance and support burden is

In the software-as-a-service world, many of the thorniest problems facing crossenterprise trading partner teams attempting to collaborate in a geographically distributed environment can be mitigated by offloading responsibility to the firm hosting the solution. For example, company and user on-boarding services can be executed by experienced personnel to efficiently and seamlessly incorporate new users from all constituencies, regardless of volume. Similarly, the hosting company can oversee external trading partner identity management functionality, ensuring that once users have been on-boarded, they are properly authenticated and can access only the documents and data to which they are entitled. Access permissions are assigned by qualified administrators, allowing the roles and projects to be managed in line with changing business requirements. The software-as-a-service approach offers a number of other advantages over its licensed counterpart. Companies no longer need to incur the capital investment of product purchase, only to be followed by additional monetary and time investments in solution implementation. With the hosted model, companies only buy what they need, when they need it, and the firm hosting the solution canprovide all required implementation and configuration tasks. – Exostar White Paper on Collaboration

SharePoint

However, we were very disappointed to read further in the paper and find that Exerpt integrates with SharePoint. SharePoint is a complete mess of an information tool in our opinion that only exists in the corporate enterprise because of Microsoft’s marketing muscle. We hope Exostar has the ability to integrate with competent document management solutions as well. This is the problem with corporate software. Vendors like Microsoft bring in absolute garbage products like SharePoint, and then due to the installed base companies being integrating to them. This lack of critical thinking is what leads to corporate software being so far behind the consumer market for software which is actually more of a free market.

Supplier Collaboration

Many companies are currently going through a supplier collaboration software selection process. They are listening to consulting companies that are proposing that one software solution is better than another, has specific capabilities that other do not have, and are attempting to find success stories that can help companies understand how to perform supplier collaboration in a way that will benefit the company.

Immediate Test for Supplier Collaboration

What is not well understood by companies is that they can begin testing supplier collaboration tomorrow, without going through a software selection, or bringing in a large consulting company to “analyze their business processes.” This is because Google Spreadsheets offers a free application that anyone can collaborate on. As you can see below, we have setup a sample template for a supplier collaboration in Google Spreadsheets. As many vendors as we choose to give access to could fill in their information in this spreadsheet. A file could be made as an export of this sheet and uploaded into an ERP system. The main advantage of Google Spreadsheets is that it is web based and collaborative. And Google Spreadsheets is not the only collaborative, web based spreadsheet to choose from.

This spreadsheet can be shared by simply inviting another person.

Now we can share with multiple users.

You can test this yourself by opening two accounts in Gmail and then sharing a workbook between them. However, Google Docs is lacking in that the supplier could easily overwrite the fields that the buyer sent them, either by mistake or on purpose. Secondly, if there are multiple suppliers for a product, they would have to be given separate sheets, which would be a bit a of a pain.

Better Spreadsheets for Supplier Collaboration

Because of these limitations we went searching for other collaborative spreadsheets that can do this task. We will write about that in future posts.

Spreadsheets vs. File Integration

While collaborative spreadsheets are one way to go test collaborative planning another way, and a probably more robust way is to simply agree on a file format which can be shared. Collaborative spreadsheets assumes that suppliers are interested in manually inputting the values. However, collaborating on a shared file means that the supplier can manipulate it any way they see fit, and integrate it with their supply chain system. The exported file, with confirmations on values can then be simply uploaded into the buyer planning system.

Why It Is Important to Test Before Implementing

The current model of software selection, does not make a lot of sense to us. It places third parties in too strong of a position vis-a-vis the implementing company. Before a company even brings in a vendor or consulting company, they should have thoroughly investigated the alternatives and tested simplified versions of the desired end solution. Much of the difficulty of supplier collaboration is getting suppliers on-board. If you cannot successfully implement supplier collaboration with Google Spreadsheets, you will not be able to do so with a complicated and feature rich application like SAP SNC.

To read more about SAP SNC, see our introductory article on it below.

http://sapplanning.wordpress.com/2009/05/19/snc/

Not Integrated

One of the responses from software vendors and consulting companies will be that Google Spreadsheets are not integrated. This is true, and we are not proposing that Google Spreadsheets be the end state of your supplier collaboration. But that the concept should be tested in an easy lightweight product, before it is attempted in a comprehensive and integrated solution. Secondly, that this test can be done immediately, and the duration of its run may be open ended. There would be nothing wrong with testing this solution in Google Spreadsheets for 6 months or more. Companies that have tested a miniature version of a solution, will be far better positioned to implement their final system than companies that have not tested and simply relied upon the recommendations of advisors to set their expectations of the final system.

Why the Current Model Does Not Work

Currently the enterprise software market is far less competitive than the consumer software market. This is because decision makers do not have direct experience with the software that they purchase and their options are narrowed by advisers and consulting firms that make money from implementing software. Software is not recommended because it is the best software for the client, but because the consulting company can make money off of the consulting. In the corporate market the quality of the software is secondary to the quality of the relationships that a software company has. First it must hire expensive salesmen who have relationships with executives. Secondly, it must provide very long and expensive implementations to the large consulting companies, or the consulting companies will not promote the software with their clients. Software that is selected by large companies is often the wrong software because of the corrupting influence of consulting companies and software salesmen.

The Web Enabled Model WOuld Work

A perfect example of this is Microsoft SharePoint. It is the worst document management software available, yet it persists.  A hosted model or software as a service, in addition to eliminating software salesmen and reducing the over-reliance upon software companies would result in a far more efficient system, and in far better software.

http://symmetricalcontent.com/wp-content-capabilities/wp-as-cms/

We have moved this post to our new blog on Google for Supply Chain. See the post here..

http://googleforsupplychain.wordpress.com/2009/06/15/supply-chain-software-and-the-google-model/

Things are Changing

At one time vehicle routing software was only available through software that was expensive, and needed to be installed on the purchasing company’s computers. Not anymore. Sophisticated web enabled routing software is now available for a monthly fee, and with less feature rich routing available for free from Google Maps. In our post entitled Lets Web Enable Supply Chain, we made the point supply chain software should increasingly change to a web based model. http://supplychaininnovation.wordpress.com/2009/05/29/web-enable-supply-chain/

There are all sorts of reasons for this, not the least of which being, that web based software can be easily and inexpensively tested, without the necessity for the normal corporate software sales process. We find this process immensely wasteful and actually reduces the quality of software because less transparent software is more difficult to properly compare. When software is not web enabled, it means consultants need to come to the client site and work in an unfamiliar environment where they are less efficient. When software is offered over the web as a service, the entire situation is far more efficient and better results occur.

What Is Web Enabled?

We wanted to be sure to define what we mean by the term “web enabled.” This is because many marketing representatives will declare their software is web enabled, however, our definition is a bit different. When we say web enabled we mean the following:

• The interface meets high standards of design and is extremely usable, and that it actually takes advantage of HTML, Java or even Flash. Arena Solutions and MCA make the grade, SAP Portals, does not — even though it is written in HTML.
• The company offers their software as a service, and furthermore, they actually support this model with resources.
• The company offers a demo system either directly through their website (the most preferable) or by request through an account rep.

Less Incentive to Improve

Vendors are putting off improving their web interfaces because those making the purchasing decisions are often not aware that there are different degrees of web enablement. Also, too often software vendors present the interface during a demo with specialized pre-sales consultants who spend many hours mastering the interface. This is not evidence of a well designed or usable interfaces. Excellent interfaces allow beginners to quickly pick up software, and expose the underlying logic of the program to users. Executives who do not give sufficient emphasis to the interface will find they have problems with and more expensive implementations.

Google Maps

To start off this analysis we wanted to discuss a new feature we discovered in Google Maps. First because it is simply interesting that you can get this from a free service, and secondly, because the more sophisticated solution we review after it also is based upon, Google Maps.

Adding a Location to a Route

In the example below, we have created a route between two locations (A and B in green letters below). We thought that Google Maps required addresses, but in fact, you can enter in the name of business and Google Maps will find the closest one to the route you have currently planned. Below, Google Maps has found several 24 Hour Fitness locations that are close to 762 San Antonio Rd in Mountain View California.

However, if we drag the location above the first location, notice it changes where it searches for 24 Hour Fitness locations. It now finds locations close to the starting point of the route.

Here you can see the two 24 Hour Fitness locations presented on the map as well.

Now that we have a gym selected, we can add another business, and it will do the same thing, finding Trader Joe’s locations close to the 24 Hour Fitness.

Using just Google Maps, we have route planned our personal itinerary. Its hard to conceive that just a few years ago, this would have required expensive routing software and was certainly not available on the web. Again, this is all provided for free by Google. Is there another software company that has given as much to society as Google? As popular as they are, their contribution is actually under-appreciated. When compared to software companies like Microsoft of Oracle, that give nothing back and is mostly about locking its customers in….and then charging them as much as possible, Google seems like it is from another planet. We found an article from O’Reilly, that may help explain why, which we have added and excerpt of at the end of this post.

GoMobileIQ

While Google Maps is great for personal use, and could probably plan simple routes just find. There is a lot of functionality it does not have, and it does not consider splitting locations between different trucks. One vendor which impressed us is GoMobileIQ. A few of reasons we like them is:

1. They are truly web enabled
2. They leverage Google Maps.

This is done using the Google Maps API which you can read about here.

http://code.google.com/apis/maps/

It is Google’s attempt to encourage other software companies to use its maps as a platform.

This is good for customers of GoMobileIQ because Google Maps will continue to develop, so by building HeadLight (this is the name of the product made by GoMobileIQ) to interact with Google Maps, HeadLight will continue to gain from Google Map’s development. Furthermore, GoMobileIQ does not have to spend valuable development resources on making or maintaining the mapping software. This is one reason GoMobileIQ can offer its software at such a low price. Furthermore, vendors that do not connect to the Google Maps API are at a competitive disadvantage against a company like GoMobileIQ, because they have the development overhead that GoMobileIQ does not. (applications that work together in this way are also called mashups)

Screen Shots

The screen shot below shows how you can hover over any location, and read information about it. The different color locations represent different drivers. These drivers are assigned locations by HeadLight. Locations can be uploaded with a file, or they can be added manually.

This next view shows a street level picture, provided of course by Google Maps (street level view was introduced a while ago, but as Google adds more pictures, the feature becomes more complete and more usable.

Headlight Conclusion

HeadLight appears to have a very logical interface, and you can actually sign up for a demo online. The price is quite good, meaning even the smallest companies can easily afford a subscription to it. To try it out for yourself, head to http://www.gomobileiq.com It is both interesting as routing software, but also as an example of how to make a commercial application as easy to use and sign up for as a consumer application.

Addendum: Why Google Acts So Differently

Netscape framed “the web as platform” in terms of the old software paradigm: their flagship product was the web browser, a desktop application, and their strategy was to use their dominance in the browser market to establish a market for high-priced server products. Control over standards for displaying content and applications in the browser would, in theory, give Netscape the kind of market power enjoyed by Microsoft in the PC market. Much like the “horseless carriage” framed the automobile as an extension of the familiar, Netscape promoted a “webtop” to replace the desktop, and planned to populate that webtop with information updates and applets pushed to the webtop by information providers who would purchase Netscape servers.
In the end, both web browsers and web servers turned out to be commodities, and value moved “up the stack” to services delivered over the web platform.
Google, by contrast, began its life as a native web application, never sold or packaged, but delivered as a service, with customers paying, directly or indirectly, for the use of that service. None of the trappings of the old software industry are present. No scheduled software releases, just continuous improvement. No licensing or sale, just usage. No porting to different platforms so that customers can run the software on their own equipment, just a massively scalable collection of commodity PCs running open source operating systems plus homegrown applications and utilities that no one outside the company ever gets to see.” -http://www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/what-is-web-20.html

So Many Boring White Papers?

White papers and sales literature tend to be a bit wrote and unoriginal. Many of them seem to be written at too high of a level, and as a consequence its difficult to learn anything from them. There seems to be an important element left out: the importance of learning from any document.

Steve Grant’s White Paper

However, every now and then you come across one that is really good where the author(s) has the background and ability to educate. If anyone would like to know how to write a white paper, visit the Ciber website, and download their numerous white papers (registration required).

http://www.ciber.com/services/09template_whitepapers.cfm?data=wp-supplychain&name=Supply%20Chain&dir=../erp/supplychain

We don’t know much about Ciber, but we know that someone over there has their thinking cap on.

We analyze one of their papers which every effectively explains why different solutions work in warehouse management. This article can be found at our SAP Planning blog.

http://sapplanning.wordpress.com/2009/06/05/choosing-an-sap-warehouse-solution/