Quick Hits vs. Long-term ROI

Conversation with a supply chain strategist

Craig Jett has the intriguing title of supply chain and B2B strategist for IBM's sales and distribution organization. Among other things, Jett oversees the company's strategy for partnering with various e-business software providers and its plans for promoting B2B solutions. With 10 years experience in e-business, Jett's pre-IBM background was in collaboration solutions, primarily in the retail and consumer packaged goods supply chains, including collaborative planning, forecasting and replenishment. iSource recently asked Jett about current trends in the enabled supply chain.

iSource Business: What are the major trends that you are seeing in the supply chain?

Jett: We really see two big things: First, the private marketplace opportunities and customers looking to create their own marketplaces, as well as the participant-enablement pieces of this (as a supplier, how do I join or belong to one of these public or private marketplaces?). There certainly are a lot of opportunities to be had for both the buyer and the seller in these marketplaces, and we're still seeing a lot of interest there.

We are also seeing interest in getting back to core supply chain issues. A lot of customers last year jumped into one of these private marketplaces, and one of the things they've uncovered is that they are not getting as much benefit as they would like. One of the main contributing factors is they are not as "clean" as they probably should be within their own supply chain processes. So they are really taking a step back and saying, "What can we do to better organize ourselves for these types of collaborative environments?"

iSource Business: What are the issues that companies are considering as they think about whether to participate in a private or public exchange?

Jett: There are two really core issues that continue to pop up. The first is, what data can or should I share? If I share this information, am I really giving up too much of my core business? Even though companies have been involved in EDI [electronic data interchange] initiatives and they have done a lot of collaboration and passing data, they are still coming to grips with what the right data are to share.

The other issue is how to get started. They are dabbling in a lot of areas, and they are coming to grips with pulling all these different initiatives together. That is certainly a challenge.

And just to add a third one, certainly in this economic environment, they are looking for ways that they can see some quick hits. How could I quickly address some issues and see some return on my investment as quickly as possible?

iSource Business: Is the current emphasis on the quick return on investment going to be detrimental in the long term as companies try to make their supply chains more efficient?

Jett: I think it is detrimental. Managing a supply chain and supply chain re-engineering are not quick-hit projects. The majority of these types of solutions are business-process re-engineering solutions, and those take time to implement. It takes time to address all the nuances of your business and the different ways that you work with your suppliers.

iSource Business: That said, are there specific quick hits that companies can achieve now?

Jett: A lot of companies have seen quick improvements in things as simple as indirect procurement. Those are things that many companies are doing already. A lot of these global companies have several thousand suppliers that they work with worldwide for things like office supplies. Being able to get those things down to a smaller number of suppliers helps immensely. The second area is, obviously, direct procurement.

iSource Business: What is the next supply chain trend that you see coming down the pike?

Jett: We're certainly going to see even more collaboration. I think we have only seen the tip of the iceberg in regards to the types of solutions that customers are going to be collaborating on.

And visibility up and down the supply chain, so that people can see the impact and effects as situations occur. Having that type of visibility and the ability to react quickly are going to be the next big things. We have seen a lot of good advances in those areas, but I think they are only going to get better.

iSource Business: Are the obstacles on the road to the enabled supply chain business or technology issues?

Jett: We are overcoming a lot of the technology issues now. The biggest issues that we are going to see in the next several years are what we call generational issues  issues that aren't easy to address in a year or two because of the people involved. It typically takes four or five years to get support for these types of solutions. We see people issues as being a big component of this.