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1、O78GettingsupplychainsoftwarerightKisheKanakamedalaGlennRamsdellVatsSrivatsanAstudyofearlyadoptersofsupplychainmanagementsoftwareshowsthatitwksbestwhereitisneededmost—butisnouseasabageoverflawedprocesses.verthepastdecade
2、companieshaveinvestedheavilyinwiringtheirsupplychainswithsoftwaredesignedtomanageinfmationflowsamongtheirinternaloperationssupplierscustomers.From1999to2002vendssoldmethan$15billioninsupplychainmanagementsoftwarelicenses
3、—thefirststepinaprocess.thatfiguredoesn’tincludethecostoftheexpensiveinstallationmaintenancecontractstocome.Thesoftwareitsdevelopers—companiessuchasSAPaclethatsellapplicationsfresourceplanningaswellassupplychainspecialis
4、tssuchasAribai2TechnologiesManugistics—haveattractedattentionbecausethesoftwarepromisestotrackpredictcustomerdemasaconsequencetoadjusttheflowofgoodsmeprecisely.Whensupplychainmanagementsoftwarewksitcanhelpcutinventylevel
5、simprovedeliveryschedulesensurethatsupplymeetsdem—allofwhichshouldmakecustomersmesatisfied.Onesupplychainexecutivecallsthesoftwareoxygenfhisbusiness.Buttheresultshavebeenmixed.Somecompanies(includingDellComputerWalMart)h
6、aveharnessedthepowerofthistechnologytoimprovetheirsupplychainsincertaincasestotransfmtheirbusinessmodels.Othershaverunintotroublesomepubliclyacknowledgingthattheyhavespenthundredsofmillionsofdollarswithnoimpact.80THEMcKI
7、NSEYQUARTERLY2003NUMBER1GoodsupplychainmanagementisfundamentalAsupplychainsimplystatedcomprisestheflowofacompany’sproductsinfmationaboutthemthemoneythatchangeshsbetweenthecompanyitssupplierscustomers.Whenacompanymanagest
8、heprocessesthatsuppttheseflowswellitcanfilldersfromcustomersquicklyyetkeepitsinventytoabareminimum.Whenitdoesn’tthesupplychainbreaksdown.Customersplacedersbuthearthattheproductsareoutofstockevenwhentheymightbeavailableso
9、mewhereinthecompany.Rawmaterialsfailtoshowuponloadingdocksshipmentstocustomersarrivelate.Factiesrunbelowcapacitybecausecustomerscanceltheirders.Theresultcanbeaquickinsaleslostmarginsinventywriteoffs.Softwareonitsowncan’t
10、fixbasicshtcomingsinsupplychainmanagementinfactitcanmakethingswse.Therealbenefitcomesfromrepairingbrokenbusinessprocessescompaniesthattacklethembefeinstallingthesoftwarecanreduceinventylevelspredictdemmeaccurately.Thisef
11、ftalonecanincreaserevenues.Addthesoftwaretheimprovementsareacceleratedsustained.Butinrealitymanycompaniesthathaveinstalledsupplychainmanagementtoolsareunhappywiththeoutcomesoherewefocusonhelpingmanagersturnaroundsloppyin
12、stallations.Companiesthatfigureouthowtomakethesoftwareimprovedprocesseswktogethertocreateameefficientsupplychainwillseeabetterreturnontheirinvestment.ResultsdifferwidelyTofindoutwhatmakessupplychainmanagementsoftwareinst
13、allationssucceedwestudiedtherecdsof63hightechcompaniesintheFtune1000from1995to2001asixyearperiodthatcoincidedwiththefirstbigwaveofinvestment.Oursampleincludedcompaniesthatmakehardwarewkingequipmentsemiconductselectronics
14、butnotsoftware.Althoughweconcentratedonthisgroupbecausecompaniesinitwereearlyadoptersofsuchapplicationswebelievethattheresultsofthestudyapplyequallyoutsidethehightechsect.Additionalexampleshavebeendrawnfromotherindustrie
15、s.Asametricweusedinventyturns—areliableindicatofthehealthofasupplychainsincetheydirectlyaffectreturnsoninvestedcapitalwkingcapitalthecostofgoodssold(throughobsolescenceinventycarryingcosts).Supplychainexecutivesfaceconst
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