Enterprise Performance Management: I Can See For Miles

Like the narrator of the song "I Can See for Miles," organizations that implement enterprise performance management solutions have a vision of their operations that extends beyond their corporate horizon.


Consider one of the largest logistics companies in the world and how it makes millions of transaction per day in normal operations, managing costs to stay competitive and managing customer expectations to stay in business. It is relatively unfathomable to halt or disrupt operations for even the simplest of information technology-related implementations. Enlisting the EPM framework to improve its bottom line, the company leveraged its own core technology to analyze the complex relationship between profit and individual customers, and the final destination of their products to hundreds of retail stands across the country. The goods traveled via multiple carriers, passed through several company-owned facilities and were delivered through one of six different methods.

Customer shipments had consistently moved through each route and were delivered on time well over 96 percent of the time, yet it wasn't possible to analyze customer or lane profitability. It wasn't possible to easily produce a one-time report for management to determine the products, partners, geographic regions and vendors that were actually driving revenue, profit and customer value. The processes within the organization had always worked, but the system for managing these processes had become too cumbersome to allow management the time to review and absorb the information. When time was available, management was too overwhelmed with data, reports and accountability to change anything.

After implementing this EPM approach, this company achieved a number of breakthroughs. For the first time, senior managers now receive scorecard performance on a daily basis and also can forecast individual shipments that are likely to fail while still having the time to do something about it. In addition, managers now have the ability to reduce expenses in the same proactive manner, gaining visibility to underutilized trucks while there still is time to cancel or consolidate routes. As a consolidator of their industry, this company is buying and absorbing new companies. Their EPM approach allows the company to quickly integrate newly purchased companies without replacing its information technology system.

The logistics' organization, like many, recognized that financial and organizational performance is a result of its ability to effectively execute and manage its organization. The missing component to the ERP equation was its ability to quickly and easily understand the data points in a manner that checked the current pulse of the organization and provided visibility into its future. Once management understood this, it inevitably led the company back to the underlying processes that were missing or flawed.

Cultural Shift

Dale Carpenter, a partner of Truck Dispatching Innovations Inc., in Chicago, Ill., sees organizations going through this process in the marketplace. Our value add' in the marketplace is the different perspective we have, he says. Some customers buy our solutions because they want cutting-edge route optimization software, which is something they easily understand. What they find out is that while the software approaches things in a way that is familiar, the cultural shift when going from a manual process to an automated process is difficult. Take, for example, the difference between cost-based routing and zone routing. Accomplishing this requires a paradigm shift and only the most advanced organizations understand that this change in thinking takes it beyond the simple automation of what used to be done manually each day. These are the same organizations that recognize they have to change how they conduct business and begin looking at the impact of their operational efficiencies throughout their entire organization, from customer service to accounting, and from truck drivers to executives.

Data without context is very much like having mile markers at the side of the road. They provide accurate data, but give drivers little useful information. In contrast, road signs that display miles left to a destination enable drivers to determine how far they have to go, when they will likely get there, and if they have enough gas. This is analogous to the type of information needed to manage an operation.

The EPM framework enables fact-based decision-making using systems already in place. Executives are able to focus on those areas that are most important to truly drive the performance of the organization and enable them to make tactical decisions in complete alignment with the organization's strategic goals. This multiplies the power of the organization and helps it achieve what it has been seeking all along: superior performance.

  • Enhance Your Experience.

    When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

Already have an account? Click here to Log in.

Enhance Your Experience.

When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

OR

Complete the registration form.

Required
Required
Required
Required
Required
Required
Required
Required
Required
Required
Required