Does your software need a tune-up?
Spiraling costs and order fulfillment delays may be signs that your supply chain software needs some attention.
Maybe you're just not able to get orders out the door as fast as you used to. Or your operating costs have been creeping up and you're running into delivery delays. Or you've noticed workers resorting to manual processes or work-arounds for tasks that were supposed to be fully automated.
All of these can be signs that something's amiss with the software that drives your distribution and transportation operations. Over time, even the best designed system can become a drag on performance if it's not kept up to date and modified as the user's needs change.
Although the advantages of regular software tune-ups might seem obvious, companies sometimes shy away from the idea because they're afraid the fixes will be expensive. But that's a misconception, software specialists say. Bringing an underperforming system back up to speed doesn't always require a major upgrade or a costly replacement. In many instances, all that's needed is a tune-up. "There is low-hanging fruit that does not require a full upgrade," says Jeff Mueller, vice president of Sedlak Management Consultants, which conducts software evaluations for distribution and supply chain operations.
In some cases, the fix turns out to be as simple as a few minor tweaks to the system. In others, it's as easy as adding one or more modules to the core system (say, a module for labor management, inventory optimization, slotting, or electronic data interchange). The user may not even have to buy the module (or modules) it needs. Software vendors say it's not uncommon to find that a client already owns the required programs but has never gotten around to implementing them.
"Our customers, for instance, use only about 30 percent of a software system's capabilities," says Mike Dunn, group vice president of sales for Fortna, another consulting and design firm. What often happens, he says, is that clients opt for a phased-in approach when they go to install new software. That is, rather than implement all of the modules at once, they decide to tackle the project in stages in order to minimize disruption. Trouble is, they never move on to the second and third phases. The modules end up gathering dust until a problem arises.
So how do you know when your software needs a tune-up? In many cases, the signs are obvious. For instance, with enterprise-level software, a big tip-off is rising operational costs (or costs that are out of line with expected norms). But performance problems aren't the only indicator that a software checkup is in order. You'll also want to re-evaluate the system if your company has recently made major structural changes to its operations —such as acquiring competitors, opening new distribution centers, or consolidating operations.
In the distribution end of the operation, indicators that your software might require some attention include lengthy order turnaround times, excessive touch points within a distribution center, and spiraling costs. Other warning signs are excessive travel times within a facility, difficulty locating products, and a disproportionate amount of paper-based processing. (See sidebar for a list of signs that your warehouse management system (WMS) might need a tune-up.)
When it comes to transportation operations, red flags include operational delays, a high percentage of empty backhauls, rising costs, and less-than-optimal vehicle cubing. These types of problems typically arise when a company changes its business strategy without making appropriate adjustments to its TMS —for instance, a supplier whose focus has shifted to online sales but continues to use software designed for LTL —rather than parcel —shippers. For that reason, the experts advise users to re-evaluate their software whenever the company introduces a process change that affects transportation.
Where to go for help
Let's say you've examined your software and found it wanting. Where can you turn for help? A good place to start is with the company that either supplied or implemented the software in the first place. These types of specialists have the experience to conduct an evaluation of the client's software usage and recommend improvements.
Some software vendors include evaluation and update services as part of their ongoing maintenance contracts. One such supplier is itelligence Inc., which provides implementation and support services to users of SAP solutions. "We take an active part with our SAP maintenance customers to keep them up to date and informed of what is new with the software. We do it proactively," says Stefan Hoffmann, the company's industry solution manager.
Another option is to bring in an outside specialist. Typically, these companies come in and review the client's operations and then develop a list of 10 to 20 recommendations for boosting the system's effectiveness. The client can then start with the easiest fixes and move on to the others as time and budgets permit.
"It helps to have some level of evaluation from the outside," notes Sedlak's Mueller. "It brings another perspective, outside thoughts, and ideas."
Regardless of who provides the support, Dunn of Fortna cautions software users not to let too much time elapse between checkups. "Tune-ups are critical for getting optimization out of the software, and they are not done nearly often enough," he says. As for the optimal service interval, Dunn recommends annual software assessments. If a company waits too long to make necessary changes or has major needs that aren't being addressed, the situation may eventually reach a point where a tune-up is not enough, he explains. The company might have no choice but to invest in an upgrade or install a new system altogether.
Software only goes so far
As effective as software modifications can be, sometimes they're simply not enough to provide the desired result. In these cases, adjustments to the material handling systems or other processes may be needed to gain additional functionality.
"Software may get us 80 percent of where we want to be, but it might take changing the processes to get the rest," says Mueller. "But it always starts with evaluating where you want those processes to be and then making the software work for that." Of course, this assumes the software has the capacity to accommodate changes in the first place. That's where the initial software selection comes in. To ensure their long-term needs are met, the experts advise users to pick systems that are flexible and will allow them to add functionality as their business grows.
"More and more, deciding on a software system can be a 10- to 15-year decision. It helps to choose software that can provide new functionality as it is introduced to the market," says Hoffmann.
... your business has changed and the new flow of goods calls for new processing methods.
... you're not familiar with many of the WMS's features.
... you suspect additional modules or bolt-on applications would provide further optimization opportunities, but you're not sure.
... you feel your order fulfillment operations require too much travel time or too many product touches.
... your operators rely heavily on spreadsheets or perform several system look-ups prior to completing a transaction.
... you're still picking orders in sequence even though you believe batching orders by type or characteristics would maximize throughput.
... your warehouse layout/flow hasn't changed in the last 10 years even though your business has undergone major changes—like a shift to e-commerce or the addition of a wholesale channel.
... your workers resort to a lot of manual processes or work-arounds for operations that should be systemically driven.
Courtesy of Sedlak Management Consultants
About the Author
David Maloney has been a journalist for more than 35 years and is currently the editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
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