Data Liquidity: Practical Approach to Achieving Strategic Initiative Results DataLiquidityBrief.htm Manufacturers often create strategic initiatives to improve operational effectiveness. Annual reports discuss them eloquently. The programs have aims such as streamlining the end-to-end supply chain, eliminating time lags in business processes, coordinating activities across departments, and collaborating to create a responsive, real-time enterprise. Several years into these initiatives, many companies are disappointed by their progress. While they usually see gains, they rarely match up to the vision. Why is this? Usually, it’s not due to insufficient spending on information systems. Most companies understand that accurate and consistent data for all is a foundation for achieving results. So they implement enterprise-level software such as Supply Chain Planning (SCP) and Enterprise Resources Planning (ERP). With the data consolidated into one or two modern, integrated systems it seems employees should have what they need to operate effectively; however, many do not. These systems are tightly focused. The majority of employees – and managers – are not trained to use them. With that realization, companies often spend significant time and effort to build data warehouses. These aggregate data from multiple systems and format it into useful management reports. From these, executives often gain a clear view that they are still far from achieving desired results. All of this investment without achieving corporate objectives has raised questions about the return-on-investment (ROI) of enterprise software applications. What most companies are missing today is not data, but data liquidity. Key data is locked in systems that most employees can’t use. By adding a mechanism to facilitate the flow of data throughout the enterprise, all of these other investments can deliver the returns originally envisioned. Data in System Vaults vs. Liquid Information Data is similar in a way to financial assets: it can be locked up (as in an investment), or it can be liquid. Like assets, data is confined to a certain use when it is locked up in a defined application or reporting structure. Only when it is made liquid can it be used in a wide variety of ways – and fully support strategic initiatives to align the business. (Figure 1.) Sponsored by www.pelyco.com The difference between assets and data is that when data is liquid it: Executive Brief Can be used by many people at the same time without losing value to each user May actually gain value with use and as it is combined with other data Has high value immediately upon being generated – it may not appreciate in value by being locked up. Why isn’t data liquid in Enterprise or Supply Chain Planning systems? Primarily because the system interfaces are generally cumbersome enough to require significant training. Only a few “super users” use those systems on a daily basis – and the data is structured for those few super users’ jobs. (The 80-20 rule applies: 20% of the employees do the vast majority of work in the system.) So while plans are set relatively effectively for a super user’s scope, the majority of employees do not have easy access to coordinate with the plans from those systems. Data Warehouses and Business Intelligence are designed mainly to provide a consistent view of the business to management and, once again, to the expert user. The data warehouse does little to broaden information access beyond another small set of qualified users. Further, given the amount of work required to set up data views, most companies cannot justify – or do not deem it critical – to move beyond management needs to deliver daily operational reports. Liquid Data Flows where needed in user-defined reports for a wide variety of purposes to untrained employees & managers with minimal IT support Users Figure 1: Data is locked up in systems for specific uses by trained Super Users only. Supply Chain Intelligence taps into that data and makes it liquid for broader uses across the enterprise. In most corporations today, 80% of employees who are not power users of one of the main enterprise systems lack the relevant information to move the vision into reality. (Figure 2.) The appropriate data is in those systems, but not in a form they can use. To make decisions in their job domain consistent with current plans, they need data that is liquid – outside the confines of systems designed to lock up the data for specific uses. Data Liquidity through Supply Chain Intelligence Most enterprises have the data they need to achieve a grand vision of efficiency, collaboration and instant decisions based on sound information and analysis. However, they need to increase the liquidity of that data. To unlock the data in current systems and make it liquid for all employees, companies must make one additional and comparatively small investment. The additional investment is for an Supply Chain Intelligence system. Like a data warehouse, which often hosts Business Intelligence (BI) or analytics, Supply Chain Intelligence can gather data from many sources and make it available for Untrained Employees Minimal Access to Systems Decisions Rely on Spreadsheets, Queries to System Users, Best guess, Gut feel Outdated reports & Questionable data ERP Task Oriented Users ERP Power Users SCP Power Users Mgmt. Report Users – Data Warehouse Figure 2: Most employees do not have access to the data they need to make sound decisions and thus cannot contribute fully to achieving desired results. Executive Brief new uses and expanded reports. Like other forms of business intelligence, it provides historical analysis and reports to users. Unlike traditional data warehouses and BI, Supply Chain Intelligence uses small, quick-toconfigure data marts. These systems are tailored to each company’s key operational decision-making challenges – those not addressed by planning systems already implemented. It aims to provide information to the 80% of employees who are not power users of other applications. These systems are designed to automate frequent creation and broad dissemination of consistent metrics and reports, and developing sound operational processes to ensure results. Supply Chain Intelligence, when deployed broadly, may increase the number of users for key data by 10-fold. Simple, quick: add to core systems Major change mgmt challenge Implementation User-defined and configured views Pre-defined by task; IT to add Report & Analysis Format Aggregates data from multi-sources Works on data internal to system Scope of Data Intuitive for broad range of users Requires training of task specialists Ease of Use Supply Chain Intelligence ERP – SCP Characteristic Figure 3: Supply Chain Intelligence accesses data from ERP, SCP and other sources to make it liquid; to be practical it must be different from those systems. Supply Chain Intelligence systems must be practical to succeed in making data liquid even to minimally trained users. (Figure 3) Specifically, these systems must: Be intuitive and easy for nearly every employee to use – which means it must: – closely mirror how these employees think about their challenges; – be available through a web browser interface for familiarity Operate rapidly on the basis of fresh data pulled from a variety of sources that currently have it locked up; Provide reporting & historical analysis in user-defined formats; Prove simple and quick to implement as an addition to leverage current business system and IT infrastructure investments. With liquid data available, everyone in the enterprise can line up to propel the vision into reality. Of course, the ability to align does not always ensure it will happen. To better ensure appropriate action, the best of these Supply Chain Intelligence systems also provide dynamic workflow to foster business process productivity and collaboration both internal and external to the enterprise. So once the information is in context and liquid for a wide variety of uses, employees can work together effectively to resolve issues. An early pioneer in Supply Chain Intelligence is Pelyco Systems. The company’s webPUBLISH software has been in use for a number of years in major manufacturing companies throughout North America. The origins of the company were in assisting customers of major SCP suites in gaining the full benefit from their investments. Pelyco’s customers find the practical yet tailored approach highly beneficial. Not only have they solved their initial decision-making challenges, many have expanded the use of webPUBLISH to pull data from other complex enterprise systems, and support an array of operational decision making processes. Executive Brief Solving Special Liquidity Problems in SCP Supply Chain Planning (SCP) systems were long touted as decision-support systems. And the current generation of systems has, indeed, provided a small group of experienced supply chain analysts, planners and schedulers with superior tools to evaluate tradeoffs – once they are trained as super users. Unfortunately, what has made these systems so strong in supporting this elite class of super users has also locked up data, preventing widespread use and full acceptance of the systems. A popular application for Pelyco’s webPUBLISH has centered on supporting the customer order commitment process: particularly the capability to perform what-if analysis and impact assessment of changes. This focus stems from the special data liquidity problems that SCP systems present. (Figure 4.) SCP issues for liquidity include: Format – First, most SCP systems present data in ways that only highly trained super users will find familiar – not typical reports, but Gantt charts, demand graphs, waterfall reports and other special planning-oriented views. Special Pre-Defined Planning Views Wide Variety of User Defined Intuitive Reports In-Memory Data for Plan Optimization Speed Data Mart for Compare & Historical Analysis Independent Modules for each Type of Plan & Planner Aggregation of Data for Context & Balance SCP System Supply Chain Intelligence Figure 4: Advanced planning systems present special challenges for data liquidity. Supply Chain Intelligence can increase SCP value to a much wider range of users. Supply Chain Intelligence can provide web-based ERP-style reports for maximum user access and comfort. History – Perhaps the biggest breakthrough that enabled advanced planning was memoryresident planning engines. This allowed speedy processing of many possibilities to generate an “optimized” plan. However, it also means that no history is available – since data is replaced in the memory with each run. Supply Chain Intelligence can pull data from the planning system memory into a database for retention and historical comparisons and analysis. It uses server-based pre-processing to accomplish powerful multi-dimensional analysis without the cost and overhead of OLAP databases. Aggregation – Most supply chain planning systems have independent modules for each function. This may make sense for the individual super users in large organizations, who generally specialize in demand, supply, production or logistics planning. However, many operational decisions are based on how demand and supply come together in a tactical sense. Supply Chain Intelligence easily aggregates data from many demand and execution systems for a full view of the current status and better-coordinated decisions. Supply Chain Intelligence has specific capabilities to augment the success of SCP implementations, and has already proven its value. It fosters collaboration, both internal and with trading partners. As companies gain sophistication with SCP, they realize that the ability to balance supply and demand across the network is actually the crux of the issue. The addition of Supply Chain Intelligence to the SCP modules they bought unlocks the necessary data to empower multiple players at all levels of the organization. Executive Brief Data Liquidity Supports Strategic Results Most manufacturers’ grand visions for success rest heavily on everyone in the organization collaborating to make sound, coordinated decisions. The investments in business systems to date for most companies have only provided a foundation for succeeding at this type of vision. The data is now there, just not available. With the addition of Supply Chain Intelligence, all of that data locked up in key systems becomes liquid. The wealth of information is available for every employee to access and invest in their daily activities. They can work at their peak. Even more exciting, they can develop best-practice business processes to ensure that what they learn from the liquid data results in appropriate action across the enterprise and key trading partners. Real-world examples of processes major manufacturers have created with webPUBLISH include: Visibility to a broad user community to institutionalize production planning processes. Faster response to changes in demand rippling from customer-facing to internal and production processes Servicing a wide variety of demanding customers more rapidly using a common internal methodology that also provides consistent visibility and comparable information. Creating a lean or “pull” based communication process with suppliers to keep supply flowing at the rate of demand and collaborate smoothly. Collaborative demand and supply update processes that leverage the existing APS engines to create flexible and timely what-if scenarios. Flexible, on-demand access to critical transportation and logistics data in the highly volatile retail sector. As companies such as IBM, DaimlerChrysler, Halliburton, Smith International, Delta Faucet and Solectron have discovered, tapping the data locked in enterprise systems to make it liquid can be relatively quick, low-cost and painless. Imagine if in a few weeks, everyone in the company had access to all of the data they needed for making difficult decisions in a key business process. And then a few weeks later, other groups could get the information they needed for another business process. Leaders are already increasing their data liquidity. We’ve mentioned a few examples – but there are others. As these companies progress toward their vision of enterprise-wide effectiveness and rapid decision-making, their customers will notice. Their productivity will begin to show on balance sheets and financial performance management dashboards. There is now a clear path available to achieving the performance results strategic initiatives envision. We expect more and more companies will move to provide liquid data to support day-to-day business processes. Those who choose the most practical route will arrive soonest, and gain the largest productivity and profitability benefits.