Matthew Cook -
Software Money Pit Blog
    Strategy & Management
    Trends & Technologies
    Case Studies
About Matt
Buy Matt's Book
Matthew Cook -
  • Software Money Pit Blog
    • Strategy & Management
    • Trends & Technologies
    • Case Studies
  • About Matt
  • Buy Matt’s Book
Strategy & Management

Tedious Supply Chain Jobs Turn Away Good Talent

November 5, 2016 by Matt Cook No Comments

Processing orders in Chicago, 1937; image by gallimafry.blogspot.com, CC license

In the most recent annual Deloitte supply chain study only 38% of executives felt they had the right skills in their organizations.

Why? Theories range from supply chain not being cool for new grads, to the predominance of men in the function (scan the room at a supply chain conference and you mostly see ….middle-aged men).

But another reason is that most supply chain jobs are tedious and boring. Ship stuff in. Ship stuff out. Key data into a PC, transfer it from one system to another. Look up stuff in tables. Compare what’s in the system to paper documents. Fix problems in failed transactions, summarize inventory figures, change or fix purchase orders, and create another report using pivot tables. Yawn.

Despite the hype about technology revolutionizing the supply chain, organizations simply haven’t adopted in a widespread way the automation needed to eliminate repetitive functions, because most large enterprises are risk-averse, slow to change, and don’t bother to make the business case.

Companies that have adopted expensive ERP systems still need people to shepherd transactions in and out of different applications. Companies that for years have had extensive EDI networks — which were supposed to automate basic commerce between businesses —  still touch every customer order.

The next generation of supply chain leaders is not drawn to jobs involving  banal tasks performed in 15 year old systems. You can see for yourself in many organizations – bright college graduates with supply chain or business degrees, bewildered at the dumb things they have to do in outmoded systems.

Companies staying on non-automated platforms guarantee that a certain percentage of their work force will never perform at their highest potential, despite the many commitments by nearly every employer to “developing talent.”

Consider logistics claims processing. A company making 75,000 deliveries each year will have to manage anywhere from 7,500 to 15,000 claims, maybe more – these are refusals to pay all or a portion of the invoice because of damage, unsatisfactory service, faulty products, incorrect pricing, late deliveries, etc (there are a million reasons).

In a non-automated environment, firms will staff people to collect paperwork, look up data in systems, copy delivery and invoice documents, investigate claims with warehouse and transportation providers, and assign a status to the claim for future credit (or not) to the customer.

Substitute PCs for typewriters and you have a work environment not unlike the one pictured above, from 1937.

In an automated environment, documents are scanned without human touch, sorted, filtered through business rules, and categorized into a database from which humans glean valuable information, such as which customers have a pattern of making claims for the same reason month after month.

In a non-automated environment, human talent is used to process claims; in an automated setting it’s used to reduce claims. Which role would a young supply chain professional find more interesting?

There are many solutions on the market today for automating these transactions but the best ones go a step further by not only automating but managing processes for you – removing completely from your enterprise the most burdensome non-value added work, yet delivering to you the valuable data needed for management decisions.

Some companies acquire and manage automation software – a viable option but less valuable than outsourcing. Software you acquire has to be configured, integrated with your systems, and maintained via license agreement and user support.

In the end, however, how you automate is much less important than whether you do so. With automation services priced where they are today, an attractive payback is not difficult.

Share:
Trends & Technologies

Automate Your Paper Workflow

August 30, 2015 by Matt Cook No Comments

Image by Digital Strategy, CC license

Although EDI has been around for 20 years, lots of companies still process orders and invoices manually; that is, they receive a written, faxed, or e-mailed purchase order or invoice, then  type it into whatever software they have for tracking and fulfilling orders and paying suppliers.

If you  can’t or don’t want to get into EDI with your trading partners, there are at least two other options: buying software to image the paper documents and convert them to digital format for integration to your systems, or outsourcing the imaging and integration to a third party.

Let’s review the first option.  ReadSoft is one leading vendor offering document imaging.  The company states that it’s solutions “automate the processes of scanning, interpreting, and filing of invoice data,” and provide “seamless workflow integration with SAP, Oracle and over 50 ERP systems.”  The software enables three-way matching of invoice, purchase order, and contract.

My experience with ReadSoft is that it is a solid solution; although the expertise began with invoices the company also manages the purchase order side as well.  The companies that I know use ReadSoft have purchased it as an “on-premise” solution; that is, they have purchased the license for the software and installed it on a server within their organization.  It has a good rules-based engine for checking documents for certain attributes prior to integration with your main systems.

The second option is to outsource the receipt, capture, filtering, and integration to a 3rd party.  One vendor that does this is OmPrompt, a UK-based firm that is relatively small but boasts numerous marquee brand-name global companies as clients.  I also have experience with this company and indeed their solutions are solid and deliver as promised.

OmPrompt, in simple terms, works like this: your paper traffic is diverted to the company, you apply whatever business rules and filters to those documents, and OmPrompt then sends to your ERP system the proper digital files to complete the transactions.  OmPrompt handles business from around the globe, from the Middle East to China.  OmPrompt also processes EDI exchanges, and customer claims — a huge headache for many companies.

Which type of solution — on-premise or service — is better for you?  I am biased toward services rather than buying software, but you do need to consider the pros and cons in a balanced way:

The on-premise solution might be better if you want tight integration with the SAP or Oracle workflow, although the OmPrompt service can also filter invoices, claims, and POs based on your contracts and business rules.  The service-based solution removes the obligation to maintain server, operating system, licenses, users, and the core software;

Cost-wise you may pay much more upfront for the on-premise solution (license, installation, configuration, server, etc.) as well as 20-25% of the license cost each year for software maintenance.

The service option is very low-cost, after some setup fees, because you are using computing power that is shared across many clients.

Whichever option you choose, automating the manual work will bring clear returns:  reduced administrative work and solid internal controls to ensure you’re paying what you should on invoices and claims, plus the ability to standardize your inbound purchase orders or create a web portal for order capture.

Share:

Categories

  • Strategy & Management
  • Trends & Technologies

Archives

© 2017 Copyright Matthew David Cook // All rights reserved