As we announced last week, we launched "Suitemates" - a new comedy video series with accomplished actors Kevin Pollak and Ray Wise, who play two imprisoned executives of the fictitious ERP vendor, BILK-Moore. Episode 2 ("Suites are Sour") of the 6-part series is out today. "Suitemates" parodies some of the experiences and frustrations with big ERP vendors. It is a satirical look at what has become a very serious issue: the systemic failure of ERP vendors to solve their customers' business challenges - supply chain management problems in particular - through a collection of complex and disjointed modules. The industry is littered with too many examples of costly, failed implementations and a backlash against ERP vendors has started to build. And since laughter is often the best medicine, "Suitemates" is our creative way to raise the issue…because only when the problem has been identified and accepted, will people recognize the need and benefits to finding a new way. So, what's the problem? Investing in a patchwork approach for integrated supply chain management is a gamble, at best. The industry as a whole is starting to push back and seriously question the ERP model and practices. "Suitemates" is an exaggerated and embellished story of course, but we believe the fundamental message behind the videos will resonate with the business executives and CIOs that are coping with ERP suites on a daily basis. After all, the limitations of ERP SCM suites are very real:
- ERP systems, given their history as accounting packages, have a very "inside out" perspective of the world and struggle to incorporate data from external organizations as anything other than reference information. The information flow latency, and therefore decision latency, in this arrangement is enormous.
- In today's dynamic market, you must be able to evaluate situations in seconds, not hours or days, and the evaluation must include the extended supply chain of contract manufacturers and component suppliers. When a single MRP run takes 8 hours or more, there is little opportunity to investigate and evaluate alternatives, let alone quickly reach consensus and alignment across the entire supply chain.
- Even within your company's own operations, ERP suites provide multiple, separate modules, almost always with different data models and therefore different user interfaces and requiring integration between the modules. Relying on batch processes to convert data between modules, each of which incorporates outdated assumptions about the market, is time consuming and does not lead to alignment across functions, let alone between trading partners.
- What is required in today's supply chain is a unique marriage of human judgment coupled with machine processing power. A quick and "better" answer that is arrived at through consensus is immeasurably better than the slow and "optimized"?? answers of your ERP's advanced planning tool.
Bottom line:
The supply chain has transformed, so too must the technology approach to solving the emerging challenges. So, what do you need?
- One service…not many modules.
- An integrated view of the entire supply chain…not just your internal operations.
- Analysis in seconds…not days.
- Collaboration and human judgment…not black box optimization.
Kinaxis RapidResponse is a single service that delivers on the promise of integrating information, capabilities and people. We share more here (SCM suites vs. RapidResponse) and here (RapidResponse Enterprise) if you are interested in understanding our alternative view of modern-day supply chain management.
Discussions
That said, I do have a couple questions about your blog post:
1. Do you really see current ERP offerings that require 8 hour MRP runs? I saw these back in the 1970s and 80's and maybe into the 90's but I would be very surprised to know of any company running a current version of an ERP system that requires an 8 hour MRP explosion.
2. Likewise, do you know of any current ERP offering from leading vendors that have BATCH interfaces between modules? I mean, maybe you could find one or two--but wouldn't that be the exception, rather than the rule these days?
We knew going into this that not everyone would necessarily agree with or appreciate our marketing approach to the videos. We certainly hoped people would laugh a little (and there's plenty of evidence of that!), since "Laughing" is a key category for our ever growing public community (community.kinaxis.com)! On a serious note, they are intended to draw attention to the flaws and failures of ERP suites in solving current supply chain challenges, and at the same time increase awareness of Kinaxis and their working alternatives. The more Enterprises that learn about that, the more successful we become, and that ultimately translates to more success for our growing customer base.
Regardless, I’m sure you weren’t asking for a debate on marketing, so let me get to the questions you asked...
As context to my reply, central to our position is that “speed of knowing” is core to achieving excellence in supply chain management. This means knowing current and projected key performance indicators, knowing when unexpected events, demand or supply side, are driving risk to performance, knowing the impact of change and of alternative course corrections before taking action, and knowing who needs to collaborate in order to either avoid a problem, or to take advantage of a new opportunity, among other things.
1. We see many instances where full explosions for a company take well over 24 hours. While this may sound wildly archaic against today’s hardware and software landscapes, it is completely understandable when you consider that many companies leverage outsource partners as part of their supply chain design -- an ever growing trend. Under such circumstances, a complete explosion is sequential across disjoint ERP instances – usually across different ERP brands no less, before a brand owner will understand the state of demand fulfillment and supply needs. Despite the length of time it takes to run through such analytics for a complex supply chain, our customers are telling us that they need to “know sooner” the impact of changes, both expected and unexpected, across their entire supply chain. It is not uncommon for our customers to run 10’s of full multi-tier scenarios to get at these answers every hour. As a point of reference, we are modeling one of our customers supply chains, which involves integrating over 50 inter-dependant sites spanning multiple ERP systems (3 different brands), close to 1,000,000,000 unique part numbers, over 4,000,000,000 BOM records, generating well over 8,000,000,000 unique dependent demands in under 60 seconds. The science involved in achieving such breakthrough computational performance couldn’t be more different than what ERP suites can provide.
2. Perhaps more effective integration between ERP modules does exist in today’s world – it’s easy to read about the investments being made in connectivity layers. The big ERP players all seem to have a strategy here. Even then the need to integrate different modules is a real-world issue. Have a look at this very recent discussion on Toolbox for IT on issues of integration between ECC and APO (http://bit.ly/9wEXYT). The integration modules may work well in theory, but in practice there are real gaps. RapidResponse takes data from multiple ERP systems and provides an end-to-end view of the supply chain across trading partners. Users can change anything within a private sandbox – say an order quantity, a forecast range, BOM substitution, sourcing rule, etc – that comes from one of the ERPs in the supply chain and RapidResponse will evaluate the upstream and downstream consequences emulating the MRP logic in each of the ERP systems in the supply chain. There is tremendous advantage in our being ERP independent – we not only integrate the data, we integrate and respect the analytics from which the data came.
We would very much welcome an opportunity to expose you to RapidResponse and some of its unique capabilities should you be interested in learning more.
I appreciate your willingness to engage on this publicly.
Next time I have a supply chain opportunity, I'll be interested in looking at Kinaxis.
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