An oft-invoked quotation from the legendary quality expert Dr. W. Edwards Deming states that "You can't manage what you don't measure." True words, indeed.
His words have prompted thousands of companies over the past three decades to implement detailed metrics programs to track their performance. Makes sense so far, right?
It seems, though, that these efforts often fall short despite the best of intentions. And the problem may have nothing to do with misaligned metrics, lack of strategic vision, or even poor management. Rather, the problem could lie in the important enabling technologies that companies use to improve (and yes, measure) their performance.
To understand why this would be, you need to know a little about the forces that have reshaped the supply chain management world in recent years. One, of course, has been the evolution of metrics. Another has been the push to break down functional silos and unify the entire enterprise around such common goals as sustained profitability, stellar customer service performance, and driving growth.
But simply dismantling silos isn't always enough. A number of companies have been disappointed in the results. Instead of getting better, in some cases, things have gotten worse.
Part of the problem may be that while these companies have broken down the functional silos, they're still mired in technological silos. What's happened is that over the years, they've invested in sophisticated technologies to manage various aspects of their operations—transportation, procurement, warehousing, production, and even point-of-purchase activity. These systems can be remarkably effective in generating large volumes of useful data. But there's just one problem: There's no way to meld it all into a single, unified database that provides a big-picture view of the operation.
As Richard Sharpe, CEO of Atlanta-based supply chain software and service specialist Competitive Insights, said in a recent interview, "The functional silos are gone, but what about the performance data silos?"
The takeaway here is that if you want to be rid of silos, you need to be sure that your technological infrastructure is built in a way that will support, rather than detract from, that mission. And it appears that companies are beginning to realize that. A recent study conducted by Sharpe's firm over an audience of CFOs indicates that businesses are placing a very high priority on finding better ways to analyze and understand their performance, especially as it relates to profitability.
Sharpe has literally staked his business on giving clients a better way to do just that. After eight years in development, Competitive Insights has rolled out a software-as-a-service package called CI.RADAaR. Its purpose is simple: bring the data generated by all the disparate systems—transportation management software, warehouse management software, enterprise resource planning systems, and the like—into a unified, customizable database that provides ready access to clear, actionable business information.
Sharpe says the product has the potential to transform many businesses. "It's all about looking at what they are doing and how it is improving the bottom line," he says. "We are providing a tool to efficiently get data from across all these systems into one place [so the information] can be analyzed to answer very specific and important questions about profitability—and we can do it with granularity right down to the SKU level."
Initiatives like this could be an important step toward getting all of the players in a supply chain on the same page. Perhaps more important, from that page, they will be able to answer the question their boardroom-level managers want answered: "Where are we making money, and where are we not?"
Gartner, Inc.