Proving Your Full Supply Chain Potential

April 28, 2016 Simon Hardy

Stop Being a Caterpillar Become a Butterfly

Imagine if you have been the unfashionable business unit–the one that makes money every year–but you are not the Healthcare or Life Science Division. Imagine if you have watched the cash contribution that you have generated every year disappear into a corporate dream of becoming something special, different, exclusive. Imagine if every time the CEO stands up he spends 15 minutes talking about the latest vogue, but your business unit is mentioned in passing–as if it was the cousin that nobody likes. Imagine if every time you try to put forward a growth plan–or a savings plan–the capital disappears in a puff of corporate smoke reappearing in something dreamed up in Davos.

Now imagine that someone says, “I am selling you off” or “I am de-merging you." Your initial response is one of nervousness, “What will happen? Will I lose my job?" You have been part of the mother company for so long that you cannot imagine not being an after-thought on a balance sheet. Then, if you are bold and inventive, you think, "Hang on a minute. I can shine; I can stop being a caterpillar and become a butterfly."
This may sound far-fetched, but I have had the equivalent of this conversation a number of times over the last few years. Suddenly, very skilled Supply Chain experts–who have been making money out of systems that are not designed for them–have the opportunity to look at the projects they have always wanted to do. However...things are not quite “unicorns and rainbows," there is still some capital restriction. So what do you do? How can you show that you have an adventurous soul and you can drive profitability improvements? There are two words that can help out a Supply Chain “brother” in need–Cloud and SaaS.
I see companies look at the concept of “Rolling ROI," and you see a SaaS or Cloud project. With a relatively small amount of money–something in the tens of thousands–not the millions that the mother ship used to spend on ERP systems. Then you show the real day to day savings. As these savings are generated your “roll” them into expanding that solution–or kicking off the next rolling ROI.
  • Perhaps it is basic Road Execution, where you know that Shell saved $10 a shipment ten years ago, but you have not been able to start your project
  • Or you do VMI on your top 10 customers, because you know Air Products made $400k of annual operational savings AND $400k of working capital reduction on just one customer
  • Maybe you start a Raw Material program because you know GoodYear got their top 100 suppliers to do Vendor Manager AND OWNED inventory
  • Perhaps it is automating invoices with some of your customers and you improved DSO by a day (and $000’s of bottom line money)
So, in these days of DM&A, look at all of those projects that were killed by you not being the trendiest kid on the block. They will save you money and “cock a snook” at the company that just got rid of you.   
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