System in the Supply Chain

How to implement a Logistics support system? Expert’s view.

Recently, when writing about how to implement a Logistics support system, I shared my own experience and thoughts from the projects I have carried out.

Logistics is an interesting area in the organization because, among other things, it functions a little differently in each company. All implementations require an individual approach.

To broaden my perspective, I decided to gather advice from other Supply Chain Optimization experts. Below you will find 11 pieces of advice from practitioners, Supply Chain managers, and people involved in project management in Logistics.

All of the presented tips shed light on the choice, implementation, or use of modern Logistics support systems. All of them are supplemented with distinctions and my own commentary on the author’s chosen thought.

Make sure to read the collected opinions of experts!

Maciej Kowalik

SmartStock, Chief Executive Officer

A significant improvement in the efficiency of the Supply Chain most often requires changes in the area of demand forecasting, inventory optimization, and Logistics. Therefore, everyone in the company is a stakeholder and beneficiary. This is why, before choosing a solution and introducing a new system, it is necessary to look at the organization in a holistic way. Setting priorities for the project and their approval by the company’s management. Then the best method of implementation is to take small steps according to the English expression “crawl, walk, run”.

In his practice, Maciej has carried out many implementations, creating regional structures of such software suppliers for the Supply Chain as Epicor, SAS Institute, and JDA Software Group. Currently, he runs his own company creating forecasting and planning software.

Personally, I know how important Maciej’s advice is. Often, the implementation of systems in Logistics is viewed only through the prism of the Supply Chain optimization. However, the change in this area affects many other functions in the organization.

In one project I led, the goal was to reduce the stock value of products purchased from external suppliers. Everyone in the company understood the need. However, sales experts did not immediately understand that reducing the level of inventory … means a temporary reduction in the value of purchases (and, consequently, bonuses on turnover).`

Discussing and accepting such simple relationships within the company can take a long time. It is best to conduct such discussions before starting the implementation.

Enric Parera

ToolsGroup, Strategic Initiatives Officer

During the partner selection project stage don’t waste your time and energies in long and exhausting Request For Proposal processes. That’s only for commodities. In most of the Supply Chain systems’ cases, hundreds of questions will become thousands of answers from the different vendors, and nobody will be able to read nor use them to make a rational decision. Save some money here. On the other side, after a short and pragmatic screening ask for a value-for-money Proof of Concept. A good vendor can and will be transparent. Ask hard questions and demand hard facts. Your learnings and take-aways will be much more effective.

Enric has been responsible for implementing ToolsGroup solutions across Europe for many years. First as a Consultant, Project Manager, and Country Manager, until he finally took on a global role as a Strategic Initiatives Officer. Currently, he is responsible for software development in all companies within the ToolsGroup.

His attention to requirements is particularly valuable. When investing in a system supporting Logistics, we do not expect a product that meets certain parameters. We expect real results in the area of planning accuracy, inventory optimization, or customer service maximization.

Extensive formal requirements do not bring benefits. Whereas checking whether the solution of a specific supplier can work on our own data, definitely does.

Michał Wiszniewski

TAKEDA, Demand Planning Director

The project group must consist of experts from within the organization. Dedicated full time to the project. Consultants can be helpful in choosing a tool and managing the implementation. However, it is important to remember that over time they will disappear and someone has to replace them. Knowledge should therefore come from within the organization itself. Especially since only time verifies the effects of the implementation. Corrections and improvements typically continue for a year after implementation. Therefore, it is essential to plan the increased workload of the team and the corresponding resources in the Supply Chain budget.

I met Michał while working at Baxter Healthcare. At that time, he was responsible for the Sales & Operations Planning process in Central Europe. Michał has a unique experience in planning for the needs of the pharmaceutical industry. Currently, he has a global role in Shire dealing with the area of demand planning.

The practice of delegating selected people for 100% of the project time is used as a standard in large and mature organizations. Unfortunately, in small and medium-sized enterprises, it is often perceived as an excessive commitment of resources.

In this case, the old saying applies – Buy cheap, buy twice. You should invest in knowledge about the new system so that it remains in the organization after the project. Otherwise, the system supporting Logistics will only bring undesirable effects.

However, how to ensure knowledge transfer if the implementation is mostly carried out by consultants?

Shaun Snapp

BrightWorkResearch, Chief Executive Officer

[When implementing supply planning systems] focus as much on the parameter management as the procedure that is used. Don’t get too romantic with advanced procedures. Most supply planning systems are still the Material Requirement Planning systems. Make sure that there is some type of effective reporting or other view so a new system does not simply serve execution rather than really planning and optimization functions.

For years, Shaun dealt with IT system implementations working for companies such as Arthur Andersen, KPMG, Delloite, and JDA. Currently, he runs Bright Work Research, an independent consulting company offering market analysis of Supply Chain software.

Bearing in mind my first project implementing a tool in the Supply Chain, I cannot disagree with Shaun’s opinion. At that time, I set the bar of technology too high. Currently, there is even more emphasis among software suppliers on the promotion of advanced solutions.

However, new technologies need to be implemented wisely. Any algorithm, and any procedure, works only if the team knows how to work with it. Still, no one has implemented a SkyNet-shaped system in Logistics (which, in general, is probably a good thing for us).

Aleksander Bochyński

Żywiec Group, SAP/IT Logistic Consultant

When implementing any system, it is important to translate the requirements in such a way as to minimize the number of changes that need to be additionally programmed. On the one hand, it requires business and system knowledge. On the other hand, the ability to convince the rest of the organization to be flexible when formulating its needs. Standard solutions reduce project costs and are easier to maintain later. A large number of custom extensions often prevents a smooth migration to subsequent versions. Therefore, the analysis of available solutions is part of the project, which consumes a lot of work but pays off quickly.

Alexander has carried out many projects at the intersection of logistics and IT. Both in production and service enterprises. Therefore, he is aware of the variety of requirements posed by business in the area of the Supply Chain.

When it comes to implementations, it’s worth taking a long-term perspective. Plan not only for current needs but also for the future inevitable changes in the IT environment. Paradoxically, creating an overly matched tool may not pay off in the long run.

The described relationship resembles the concept of “overfitting” in the field of statistics. Models may fit current data but perform worse when applied to data they did not encounter at the development stage.

Zorianna Skopad

Exoft, Commercial Operations Officer

Supply Chains are complex systems and integral parts of every company business model. Therefore every system implementation project requires some tailoring in design to fulfill business’s needs. During the development stage system modules and functions must be presented to the users as soon as possible. Ongoing technical and functional testing is critical. Only with tested solutions it’s possible to evaluate how well specific business requirements were met.

Zorianna deals with the development of software for the needs of transport and Logistics, as well as the broadly understood Supply Chain. Together with her team from Exoft, she conducts both development projects and optimizes the systems supporting Logistics in many companies.

From her practice, she knows that focusing on testing the product as soon as possible is a must. Preferably in stages, on a small scale at the beginning. Only on a selected product group or on a selected node in the Logistics network. However, certainly not in an organization that serves customers on an ongoing basis.

Checking after a few (over a dozen) months that the assumptions were not correct, the new system does not improve the results, or even worse, even makes it impossible to run a business, is a real threat.

I will write more about failures in the implementation of Logistics support systems another time. It is important, however, to remember Zorianna’s advice now.

Paweł Kowalski

Profit&, Anaplan, Chief Executive Officer

End users are the most important. In order for the implementation to be successful, they must be involved as early as possible, otherwise the implementation may remain in the shadows and the users themselves will remain in their favorite Excel. The transfer of knowledge about the new system starts from the very beginning of the project. It is good to conduct the initial trainings before the first design work begins. This is the best way to collect requirements, avoid misunderstandings and changes during the project. It is also important to choose a technology that is adaptive and serves our process, and not vice versa, as is the case with many “off the shelf” tools where we often have to change our processes to supposedly best practices – from my observations, it always ends badly.

Paweł has many years of experience in creating and implementing systems for forecasting, planning, and budgeting. It is experience gathered on the business side and in consulting companies included in the so-called “big four”.

Meeting the implementation requirements should be assessed by the actual involvement of planners in the Supply Chain. Do not rely solely on the hard data visible in the system. Contrary to appearances, the systemic perspective may be an illusion.

In many organizations, the complete consistency of the development of plans, for example in SAP, results from the fact that plans created from start to finish in … Excel are uploaded to the system supporting Logistics. With such an implementation, it is hardly surprising that the new system does not bring the expected business results.

Kamil Łowisz

Ascensia, Supply Chain & IT Manager

In the project, the period preceding its closure is important. The period of starting work on the new system. During this time, daily control meetings should be held, during which representatives of individual teams report the status of problems encountered at work. The high frequency of meetings is a challenge, but only in this way can you ensure that reported errors are resolved in a way that minimizes the impact on business. In addition, meetings are intended to share knowledge and help the rest of the organization in a smooth transition to new tools.

Kamil was responsible for Supply Chain planning in the largest companies in the FMCG and pharmaceutical sectors. During his professional career, he was responsible, among others, for the transfer of planning functions between Procter & Gamble and Coty, at the time when Procter was selling 43 cosmetic brands.

From my own experience, I know how challenging it can be to motivate project team members from various departments to participate in daily status meetings.

So I totally agree with Adam. Each project manager implementing a system supporting Logistics should organize daily meetings with users at the roll-out stage. Otherwise, there is no way to avoid business impact. 

The end user will always find a new and unexpected way to use even the best-designed tool. That is why responding to problems as quickly as possible is so important.

Łukasz Antczak

Dino, Supply Chain Manager

It is important to sign a properly detailed contract with the selected software supplier or company supporting the implementation. The contract should take into account the parties’ responsibilities, the dates of individual stages of work, and, what is very important, the level of efficiency and availability of the tool after the implementation is completed. Investment in the IT system is expected to take at least a few years. The requirements included in the contract must be based not only on the analysis of the current state, but they must also contain the expectations of the Supply Chain regarding the planned development of the business.

Łukasz has experience in fast-growing commercial companies. He has worked in the Supply Chain, which must anticipate business needs today to meet the needs of tomorrow.

So it is not surprising that when it comes to the implementation of Logistics support systems, he also looks at them from a very long-term perspective … and he’s undeniably right. The payback period for an IT system is usually 3-5 years.

Immediately after the implementation, no one should need a new server or buy computing power that was not included in the project budget. During the payback period, you need to focus on the use of new tools.

Jan Lompart

Aspen Pharma, Demand Planning Manager CEE

The amount of data and new types of information used in Supply Chain planning processes is growing exponentially. How not to drown in the system functionalities proposed by the software provider? First of all, by verifying the reliability of the available data. Based on the input data, decisions about the future of our company are made. Contrary to marketing pressure, there is no point in buying and implementing modules that we are unable to supply with correct data.

Jan is a real expert when it comes to Supply Chain planning. For years, he dealt with demand and distribution planning, as well as creating tools that fulfill these types of functions.

So it is not surprising that when choosing information systems, he shows material pragmatism. We implement tools to achieve business results. There is no point in investing in functionalities that require data that we do not have.

Of course, it is worth knowing the latest trends. However, in most (not only Polish) organizations, you first need to organize the management of basic data.

Dariusz Siwek

DSL Consulting, Chief Executive Officer

For many organizations, it is not easy to justify investing in a new Supply Chain system. Finding sponsors who agree to include project benefits in the budget is a challenge because it requires faith in the results in various business areas. Therefore, it is worth focusing on gradual improvements, not a revolution. You can implement a good system with modules supporting Logistics, obtaining a quick return on investment or incurring small losses. Digitalization of the Supply Chain is the future. Choosing a specific solution, however, requires testing and attitude – nothing by force.

Dariusz leads the implementation of planning processes and systems throughout Central Europe. He has experience in many industries and a broad perspective on the needs of sponsors of this type of projects. 

Dariusz’s last advice leads us back to the beginning of the journey, which is the selection and implementation of a system supporting Logistics. A journey where the first step is really the hardest.

I experienced it firsthand… In one organization, I spent three years building an understanding of the need to invest in the Supply Chain. The most difficult thing was not the creation of the so-called business case.

The hardest part was convincing the sponsors that changes in the Supply Chain will improve results in other areas of the organization and there is no other way to do it than to digitize working methods in Logistics.

Finally, a few words…

Choosing and implementing a Logistics support system is a real challenge. I hope that the thoughts collected in this article will inspire you and help you with your projects.

I would like to thank the authors of all the pieces of advice presented here. Without them, this article would not have been created. That’s why I have a favor to ask. If you feel that a particular idea appealed to you, write directly to its author. I’m sure he or she will feel appreciated that way.

They are all available on Linkedin. With each tip, you will find a link to the author’s private profile.

For now, I’m finishing a series on systems in Logistics. In the next few posts, I will focus more on processes and people, not technology. So for those readers interested in systems, I recommend other articles from the Systems category at the moment:

How to choose a planning support system for the Supply Chain?

System in the Supply Chain – how to implement it?

If having read any of the articles, you will feel like you need individual support in the choice of a system, do not hesitate to contact me directly. I will always find time to share my experience.

See you next time!

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