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Supply Chain Apps Project Final Report


Salman Ghare, Erica Lee, Tyler Roumas, Victor Sanchez, Mengqi Wan

 

Companies with Applications

 

Many common interests arose as the key motivators for creating supply chain-related applications among companies that currently utilize Apps. The ultimate goal for implementing such applications was to better serve the end user or customer. These companies would see which processes could be enhanced, who could benefit by using Apps, and what can add value or a competitive edge to their company. For the companies that are currently utilizing supply chain-related Apps, they have objectives of making collaboration amongst users easier, increasing their business efficiency, and increasing supply chain visibility.

 

In combing through the reports from the companies who were currently utilizing Apps there were three main motivations/objectives for the development of Apps. The first reason for the development of the Apps was for better visibility throughout the supply chain.  With the mobile App employees were able to quickly and easily determine how well their warehouses were operating as well as track their products and raw materials. This ultimately helped in providing better service for their end users.

 

The second reason for the development of the Apps was to improve business efficiency and make more informed decisions. With the use of Apps, managers were able to make more informed real-time decisions because the data was easily accessible through their mobile device. Prior to the use of Apps these managers would have to contact several different divisions within the company to get the data needed to make informed decisions, the use of Apps made this process more efficient. Also with Apps, procurement teams can use contract templates when creating contracts with clients, making the whole process a lot easier and quicker. Being able to have inclusive data of suppliers, products, and relevant information these companies were able to improve day-to-day operations.

 

The final motivation for the development of Apps was to make collaboration easier.  The use of Apps allowed company representatives to reference real-time data at work more closely with both internal and external suppliers. Typically, the flow of information within a supply chain is the weakest link. Having a method of collaboration within the supply chain proves useful amongst internal and external users along with a smoother flow of information.

 

The development journeys for the companies with Apps were very similar. The process grew out of a need to become more efficient and better serve their end customer. In each of these companies the process began with ideas and suggestions from operations on the specific functionality they would like to see in an App. A collaborative process began with each company’s IT department to determine if they had the internal capability to develop the App and if it would add value to the company. The business unit then worked closely with IT to create a functional App that met their needs. If companies did not have the capability to create an App internally, they would then look toward a third party to create these Apps.

 

After development and utilization of the Apps each of the companies expressed satisfaction with the final product. The companies saw improvements in efficiency as well as the ability to make more informed real-time decisions.

 

            All of the companies expressed interest in improving their Apps and expanding them to meet more of their business needs.  Gallo is attempting to improve the processing speed of their App to allow for inputs/outputs for operational processes.  ConocoPhillips expressed an interest in seeing an App that was more globally accessible and functioning.

 

Companies without Applications

 

All of the groups we interviewed that did not have any applications (Norther Trust, BP, and Henkel) and were not in any initial stage of developing them.  If they were to develop their own applications in-house they, would have to show a significant business need and a detailed ROI to invest in them. It was also observed that it would be nice to have mobile versions of ERP, PeopleSoft and SAP as they are happy with the software, it just lacked mobility.

 

In terms of general applications in certain areas, we were able to condense it to the following:

Gathering data from along the SC is important and might look like data collection from employees, distributors, raw material suppliers, and customers. Timing and scheduling all the different stakeholders involved in Henkel’s value chain can be very difficult, mobile applications would definitely allow plant-level managers greater flexibility in coordinating their operations and provide the central control team with timely information on the network’s current status.

- External (Downstream): Digital couponing for customers that provides Henkel with valuable information on buying behavior and preferences: increased effectiveness of marketing/sales efforts, use daily promotions and sales, end-consumer is the ultimate driver of Henkel’s business (and SC inventory levels). Will be able to better manage the firm’s product portfolio.

- Internal/External (Downstream): Improving Sales and Operations Planning: gathering information on end-customer brand preferences and spending would improve demand and sale planning effectiveness and responsiveness to trends.

 

Improved Real-time information business intelligence is critical:

- Internal (Plant and Warehouse Level): Monitoring of inventory levels along the SC as well as their impact on financial figures: company has five inventory buckets that they watch (cycle stock, safety stock, in-transit goods, slowing merchandise, excess inventory), timely analysis and interpretation of supply data could be helpful, look at inventory levels by product on a real-time basis.

 

Access to free capacity and available raw materials is huge and managing the flow of incoming raw materials is critical for keeping production on schedule. Henkel also requires greater visibility of free capacity within its own and contract manufacturing plants so that it can move its production system to be more responsive to market requirements. Adapting employee schedules and staffing levels on-the-fly (at the plant level) is challenging for most operations managers and there is a need for a potential application to improve scheduling.

- Internal (Upstream): Inputting receipts of newly arrived raw materials into system: reduced cycle times, reduced delays in posting material flows, offers greater visibility, valuable to receiving departments at warehouses and plants, rely on timely arrival of materials for high-volume production at company-owned plants. Roeder stressed that this was a common delay for their receiving department which caused considerable problems down the chain as a result.

- Internal (Upstream/Downstream): Scheduling and tracking shipments: Primarily use TL road and intermodal services, but utilizing more LTL carriers to improve flexibility, managing transportation needs can be challenging. Currently considering switching to a 3PL because managing internal needs is becoming too costly and confusing. Lots of paperwork and delivery planning/routing issues. Limited visibility of in-transit goods because carriers all employ different tracking systems.

 

The Network for Value Chain Excellence sees a need for supply chain mobile App technology largely in internal upstream procurement and operations management. An effective app would look to improve communication and information sharing, which ultimately bolster risk mitigation, efficiency, and cost reduction. Additional benefits include increased visibility, increased access to information, and more rapid decision-making. While IT would lead the development of the App, the SCM division would, in a collaborative effort, dictate its intended use. Furthermore, Apps would be deployed on a business unit level but not before being thoroughly tested by a third party. The companies cite inconsistency in global technology, limited internal resources, and security as challenges to the implementation of a supply chain App. Nevertheless, they are optimistic about the future role of supply chain Apps as tools for efficiency, visibility, and risk management.

 

Interesting take-aways from the summaries

 

Even though there has been a trend of moving from desktops to the handheld device, some big companies are still observing the supply chain Apps evolution and the reason is that they concern with the ROI and security issue. This is very interesting because nowadays, technology is advancing at a rapid speed. Companies are exposed to all kinds of new concepts and products. Decisions in terms of which one to be adapted and which one to be abandoned should to be made and they need to be quick so that companies can utilize these technologies to gain competitive advantages among their competitors. Early adopters have higher risks in the early testing stage however they have the potential to gain higher return. In order to survive in the competitive environment, companies really need to understand what they really need and make the right moves.

 

Many companies are reluctant to being early adopters of this technology, as there are numerous challenges to development. However, early adoption can be beneficial, given the trend of technological development toward mobile devices. Should the mobile device become more prominent, as it most likely will, early implementation of supply chain Apps will provide a strategic advantage to companies within each industry. In fact, mobile supply chain App development may become a core competence, creating a profitable business segment for the company.

 

The goal of this project was to find a niche or opportunity area to develop applications for companies in the supply chain industry to help them improve their business practices.  When looking at that, the companies fell into the area of those with and without applications.  The ones with applications were all larger corporations and made them in house.  This was because they had the capital to develop them, while the smaller corporations were hesitant because of the larger investment necessary.  It is clear that third party applications do play a big part in supply chain functions, but are all desktop based.  This leads to two conclusions.  First you could use this information to pitch to software companies like SAP that have great platforms, and show them the need for adaptation to mobile.  Second you might look at the recommendations above for new areas and make a solid desktop version first and then adapt it to mobile devices.  It is somewhat clear that the desktop version needs to exist first before jumping into a condensed application format.

DRAFT: This module has unpublished changes.