In his keynote address at last week’s SAPPHIRE 2009 conference, SAP’s Co-CEO Léo Apotheker talked about how the best-run companies will “see clearly, think clearly, and act clearly”-what SAP is calling “The Clear Enterprise.” He went on to say, “What we are seeing is a growing and lasting need for clarity and insight. Doing business within global networks has brought greater complexity and risk into the game…Executives must have visibility into every aspect of their business and network to act effectively and decisively.”
The big product news from the event, linked to this message, was the release of SAP BusinessObjects Explorer, which “brings together search and navigation capabilities from the SAP BusinessObjects portfolio with SAP NetWeaver Business Warehouse Accelerator (SAP NetWeaver BW Accelerator) software.” Since a picture is worth a thousand words, here is a video interview with Katrina Coyle, Global Information Manager at Molson Coors Brewing Company, on the company’s experience to date using the solution.
Apotheker’s message about the importance of seeing, thinking, and acting clearly is synonymous with the “make smarter decisions faster” message that we’ve been promoting to clients the past two years (see “Making Smarter Decisions Faster” from May 2008). In fact, business intelligence and analytics is one of the “Technologies that Tomorrow’s Industry Leaders are Investing in Today,” a speech that I’ve given several times this year.
(Sidebar: It’s worth highlighting, yet again, that the Achilles’ heel of business intelligence is poor data quality. It doesn’t matter if you can analyze 900 million records “at the speed of thought” if the data you’re analyzing is not accurate, timely, and complete. This is an issue that SAP also emphasized. Unfortunately, as I noted in my 1-page logistics book, poor data quality is something that many companies have accepted as a fact of life, something they prefer to deal with than correct.)
Just as I’m digesting all of this information from SAP, I come across a front-page article in yesterday’s Wall Street Journal: “Clarity is Missing Link in Supply Chain” by Phred Dvorak. The article highlights how everyone “hit the brakes” in the electronics supply chain when demand plummeted late last year, and how companies were “flying blind” as they cut. Yes, the bullwhip effect lives on!
On the one hand, the WSJ article underscores Apotheker’s message about the risks and complexities of global networks, and how executives must have visibility (the second most over-used word in supply chain, after collaboration) to act effectively. But on the other hand, the article reminds us that supply chains are managed by humans, programmed for self preservation (personal and corporate) and prone to “panic decisions” in times of crisis (see “The ‘War for Cash’ in Supply Chains“).
For example, the article highlights how Best Buy sends weekly orders to its suppliers, along with a 52-week rolling forecast, based on sales at its 1,000 U.S. stores and economic data. I don’t know how detailed these forecasts are, or if Best Buy also provides daily POS and inventory-on-hand data to its suppliers, but on the surface, it appears that suppliers have good visibility to what Best Buy is selling and plans to sell. But in early October, as store sales started to decline, Best Buy “abandoned” its prior forecasts and “slashed” orders. The article quotes Best Buy’s merchandising chief as saying, “You actually had to pick a number [of how much to order] with no knowledge whatsoever, because nobody knows anything.”
Nobody knows anything. It doesn’t get any clearer than that.
