Industries around the world have seen quite a number of changes from globalization, regulations, and technological trends, such as software as a service (SaaS). All of these factors have caused organizations to seek ways to adapt to ongoing change in order to better manage their supply chains in this global context. The theme of this year's Association for Operations Management (more commonly known as APICS) International Conference and Expo, which took place in Toronto (Canada) from October 4 to 6, focused on the concept of "global ability." Throughout the conference, factors were brought forth that can help individuals and organizations—many of which may still be trying to get out of the recessionary slump—succeed in our global marketplace. As a saying by the Greek philosopher Heraclitus goes, "There is nothing permanent except change."
Throughout the three-day event, attendees could participate in exhibit halls, plant tours, and educational and networking sessions, organized so that individuals could interact with diverse industry professionals and share experiences with each other. The ultimate goal: to learn how to be competitive in this ever-changing global market.
Here, we will discuss some of the highlights of the event. First, we will start with the educational sessions (or "learning paths"), what they were, and what their objective was. Second, we will take a look at the "World Café" networking session, which primarily focused on sustainability. Third, we'll look at what goes on in real businesses as seen in an organized plant tour. Then, we'll summarize the most important part of the entire event for us, as analysts: Which vendors were in the exhibit hall?
APICS Educational Sessions
This year the theme "global ability" was part of each educational session. There were six different learning paths: Lean, Global Supply Chain, Basics of Operations Management, Demand Management, Forecasting, and Sales and Operations Planning (S&OP). These were further divided into six focused sessions: case studies, global sessions, advanced level sessions, emerging issues, mini workshops, and specific issues.
The two of us, Khudsiya and Gabriel, represented Technology Evaluation Centers' (TEC's) analysts at the conference. We went to a mix of the learning paths and sessions. Each learning path followed a consistent theme, such as: doing more with less, changes in global operations, managing inventory, demand, forecasting, and S&OP. All sessions discussed how these factors are altering the manufacturing landscape and how organizations need to prepare to meet new and emerging challenges. All topics were presented either as real examples from organizations, in mini workshops, or through emerging techniques and best practices that are not established parts of the operations management field, but that are now becoming significant.
APICS World Café
The idea behind the World Café was to give conference attendees the chance to share ideas and make their opinions heard. Teams of a maximum of eight people sat at the same table and talked about the topic—this year's was sustainability—for about five minutes; the same topic was discussed concurrently by 50 different groups. We found that many of the discussions were influenced by a variety of factors, ranging from participants' professional experiences to their knowledge, stemming from the variety of countries, cultures, and sectors to which they belong. For each table, a moderator wrote down the most interesting ideas and created a summary of these brainstorming sessions.
The result was a very interesting exchange of ideas about how sustainability is perceived within the supply chain, and what impact humans and the organizations have on attaining global sustainability. The ideas will probably be summarized in a document similar to the 2008 APICS International Conference and Expo Global Workforce Development World Café Results.
The plant tours were one of the conference's main attractions—Bombardier's and Bayer's were sold out even before it started. We therefore decided to take the tour of a distribution center (DC) of Supply Chain Management (SCM), a company providing logistics services for a major international retailer.
Groups of 10 to 12 people were quickly organized. A DC employee guided us through the center's processes, from receipt to distribution. In a nutshell, goods are received and unloaded from the trucks, at which point the boxes are labeled and then transferred by computer-controlled conveyors to the shipping docks. The system controls which box goes where by scanning the labels and pushing the boxes from the main conveyor to other conveyors that take the box to the right truck.
We experienced firsthand how some warehouse and distribution management best practices are applied in SCM's DC. Employees showed us the staple stock receiving method; how sorting and scanning happens, based on data computed from the stores to the warehouse; and the inventory optimization capabilities within the warehouse, by linking sales from each store to the planning and forecasting cycles.
This year's APICS exhibition did not have many vendors, but those present were from diverse industry verticals. We already knew of some of the vendors, but others were new. The solution offerings ranged from inventory management, forecasting, advanced planning and scheduling (APS), transportation and warehouse management, inventory optimization, collaboration, etc. Every exhibitor showcased its solution based on its industry vertical or micro-vertical specialization, aiming to show how this makes them leaders in their particular industry market segments.
It seemed to us that many APICS attendees were not really connected with the new technological advancements currently happening in the supply chain area, either because they're not aware of new technologies or don't use them in their daily work. Many APICS members are still hooked on Excel-based spreadsheets, with which they manage inventory, calculate the best methods of kanban, and figure out if the material requirements planning (MRP) run is relevant or if they should use new calculations for the production plan from the Excel results. Most of the vendors in the exhibition hall offer applications with functionality that extends beyond what Excel spreadsheets can do.
To give some idea of which vendors and solutions are in the market for supply chain and operations professionals, here is a sampling of those that participated in the APICS expo.
In addition to Cognos and its very interesting offering for supply chain performance analytics, IBM gathered enterprise resource planning (ERP), customer relationship management (CRM), supply chain management (SCM), and other vendors that are part of the "Smart Market" offering for growing businesses (including Cincom, Cyber Optic Group, Intalio, Open Pro, Ramco, VAI and others). We will cover IBM's "Smart Business" and "Smart Market" concepts in a future blog, but just to give you an idea: IBM decided to approach the business software market differently than other big companies that keep acquiring small players. As the name may imply, the Smart Market is a place where companies can buy the products (ERP, CRM, SCM, etc.) they need online, and then easily install them on the "Smart Cube" (a preconfigured server).
The Demand Solutions demonstration team addressed real-life challenges organizations face (in terms of demand, forecasting, and inventory management) by showing participants how to use and optimize solution functionality, and collaborate using the solution as a whole or just by module.
The Demand Solutions tool set can complement users' existing ERP solutions. The Demand Solutions team told visitors that it's better to move away from the Excel-based planning and forecasting tools and use an application that allows organizations to import and export information between systems without much manual intervention. With the help of Demand Solutions' Forecasting and Requirements Planning modules, organizations can balance demand and supply streams in accordance with market demand and shifts.
JDA Software Group
The director of product management for JDA's Transportation module, Dawn Salvucci-Favier, gave a presentation in one of the learning paths about advanced transportation management solutions (TMSs) in tough economic times. The session was focused on transportation management strategies that can be used to achieve a leaner supply chain, focusing on product visibility and demand changes. However, there was no mention of how the company's transportation management application can address these advanced strategies.
We met with JDA's analyst relations (AR) manager, Wade Khoury, and Danny Halim, the vice president (VP) for industry strategy. Danny gave us an overview about what JDA is currently working on. He provided details about how the acquisition of Manugistics helped it specialize in manufacturing , wholesale, and distribution—making it the leading provider for store-level item planning and daily forecasting.
We had the opportunity to connect with Charles N. Smart, the founder of Smart Software. Mr. Smart's team has a patented algorithm within its Smart Forecasts and Smart Collaborator solutions for slow-moving and hard-to-manage inventories, and its flagship product can be integrated with any ERP solution. Currently, Smart Software is partnered with Sage ERP, Epicor, IMAFS, Cogita, and others.
Mr. Smart provided a brief overview of what Smart Software is about and how it has helped users in industries ranging from automotive, chemicals, and consumer products to health care and pharmaceuticals. After looking at the products and services, we discovered that Excel spreadsheet users, regardless their organization's size, can use this application when inventory balancing is a juggling act. Smart Software solutions can help attain the right stock levels, which can reduce carrying costs, as well as help ensure the right product is on the right shelf, at the right time, and in the right quantity.
This vendor concentrates on developing APS systems. The unique thing about its products is that the developers look at the current state of manufacturing processes before they build the applications, which are then custom-made to meet specific plant operations and business requirements.
Projective Solutions' project manager Shawn Bray told us that the company has delivered projects in industries like steel, plastics, aerospace, etc. Each APS application delivered to the client was a custom solution depending on two major elements of production planning and scheduling. The benefit of taking this development approach is that the resulting application takes into account that each plant's scheduling problems are unique. The custom application can be scaled to meet the planning requirements of plant operations, and can respond to changes in market demand more effectively than a non-custom application.
Inventory Management and Forecasting Solutions (IMAFS) Inc. has an inventory management solution focusing on the spare parts industry. The solution helps organizations achieve customer service levels without having to hold too much inventory at any given time. It also helps with ABC classification, lead-time management, and safety stock and lot size calculations.
IMAFS can help organizations reduce their inventories from 25 to 50 percent while maintaining the same levels of customer service. The solutions can integrate with ERP systems, warehouse management systems (WMSs), or any transactional system. As well, the vendor offers a SaaS inventory management solution for organizations of all sizes worldwide.
Conclusions and Recommendations
Probably the most important conclusion we'd like to share about the APICS event is that there seems to be a disconnection between supply chain and operations professionals and the software vendors offering solutions for this industry. Except in the sessions by JDA and Cognos, there was no talk about the products: most presenters rarely mentioned any type of software for the industry. Even more significantly, there was even a workshop about using spreadsheets—that's right, spreadsheets—for better inventory management. This surprised us so much that we'll try to understand what's going on and share our findings in a future blog or article.
From an organizational point of view, we saw five major issues with the conference as a whole.
Wireless access was not free and there were just four computers available, but not for Internet use only—attendees could access and print session handouts (which sometimes took a long time, not to mention the huge amount of paper wasted—why do you need to have on paper what you see on the screen?). Our recommendation: if wireless Internet is too expensive to be offered at no charge, there should be more workstations for Internet use only.
How the organizers selected the rooms for the sessions could have been better managed. Some speakers were very successful at attracting people, so their rooms were very crowded; others were less successful, and their rooms almost empty. Our suggestion is that attendees should be required to preregister for sessions in advance, so the organizers can determine how many people are interested in which sessions and plan accordingly for crowd control.
Networking became an issue when TEC analysts tried to talk to an industry-specific user base. We knew beforehand which industry vertical we wanted to focus on, from the list of attendees and their respective organizations. But how were we to find these specific individuals? Our suggestion is to have a dedicated area for one-on-one networking or meetings that attendees can prebook through LinkedIn or other social media tools. This way, individuals who would like to learn about a specific industry or area of specialization have a better opportunity to exchange ideas.
The exhibition hall had amazing vendors that could have shown attendees the benefits of using new software or technology to increase efficiency and productivity. Many attendees don't understand the value different vendors can bring, or that these vendors share their pain and want to find a technological solution for their challenges. It seemed to us that there were two events (the conference and the expo) taking place at the same time. The exhibition should be at the center of the conference to help bring users and vendors together.
The value of software in operations and supply chain activities was never mentioned in any of the learning sessions. It's great that we got to learn about new trends, techniques, and best practices in the learning paths—but we need to connect the dots. Operations and software must work seamlessly, just as we need to know where everything is in the supply chain.
We also learned many things from the APICS conference that we could never learn from any white paper, article, webinar, etc. For instance, did you know that
many master schedulers do not have authority and are not decision makers in the company they work for?
there is a Web site that tries to examine what will happen when we've reached the end of oil?
"knowledge is not power, but execution is" is a quote from Jason Jennings?
at Intel, employees can take an eight-week sabbatical?
cola is used by Nascar to clean engines?
70 percent of data may rarely or never be accessed?
40 percent of printouts are discarded in 24 hours?
"only the paranoid survive" is a quote and book by Andrew S. Grove?
All that being said, the questions still stand: How will distribution and logistics companies weather the recession, and what will they learn from it? Also, how will SCM companies incorporate and use technology? We dream of a world where SCM professionals, managers, decision makers, software vendors, consultants, and associations like APICS work together in perfect harmony to achieve the same objectives—the use of best-in-class services, practices, and tools or applications.