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Implementation Imperative

Avoid costly supply-chain mistakes by understanding objectives and getting buy-in
The $2.8 billion-a-year global industrial and consumer-packaging manufacturer has realized that "you have to get involvement at the manufacturing floor from very early on," says Greg Welborn, supply-chain manager for Sonoco's consumer division. Not only do those employees who'll be using the software need to be involved in the decision, but management needs to carve out time so they can concentrate on the implementations and training.

"We in headquarters need to understand that the people in the plant have a day job," says Bernie Campbell, VP and CIO at Sonoco. Sonoco often uses temporary workers to handle employees' regular duties so those employees can focus on training. "Just telling people to work harder is not the right answer," Campbell says.

Just as important to a supply chain's success is developing a phased implementation plan and sticking to it. "Companies have tried to implement end-to-end, massive supply-chain projects; most of those have either stalled or failed," says Dwight Klappich, an analyst with Meta Group.

That's the course Halliburton has followed. Its supply-chain overhaul started with its SAP implementation. It spent two years installing the software and moving its operations off of legacy systems that in some instances were more than 20 years old. It didn't implement the Acsis' wireless data-collection software until late 2001, after it thoroughly tested and became skilled with the SAP software. The phased approach gave Halliburton time to develop profiles for each of its SAP users and design training for each group.

PeopleSoft Inc.'s Bill Henry, VP of marketing and strategy for the enterprise software vendor's global-services division, recommends companies break up supply-chain imple- mentations into three phases--project formulation, software selection, and actual implementation--and that they keep customization to a minimum when possible. "Not only does customization cause scope creep," he says, "you've got to pay for the customization every time you do an upgrade."

At PeopleSoft's Solutions Centers worldwide, the vendor helps its customers add to generic implementations of its software without getting into expensive, unwieldy situations. Customers work to define the project requirements with PeopleSoft technicians, who then go to the Solutions Center to configure the software, build tables, and import data. Customers can join the technicians at the center during the testing phase.

Most enterprise apps vendors have been honing their services offerings to help customers more quickly implement software and achieve a return on investment. Variations include Oracle's Business Flow Accelerators, which are cross-functional business processes, such as order to cash, that have been developed through consulting work and are now built into the software. As long as the customer implements a business flow without customization, it's likely that implementation time and costs can be cut significantly, according to AMR Research.

Companies should also perform functionality and scalability testing before turning any software project into production. VF Corp. extensively tries out the supply-chain software it has been rolling out over the past few years with tests the apparel manufacturer has built in-house. It's also using software from Mercury Interactive Corp. to test its SAP implementation.

"With packaged software, you're able to define the configuration and you have specific data requirements that may be unique to your company. A software company cannot test every combination of settings for their package. So it is extremely important to test for your settings and your data," says Leigh Koetter, VF's quality-assurance and application testing manager.

Finally, companies need to set up a process to track and review each phase of their implementations, which can often span months and even years. Says Accenture's Delattre, "I remember a company that worked like this: The team would start by dreaming about all the value the project will bring the company. Dream some more and procrastinate. Focus on unimportant stuff. Procrastinate some more. Panic. Slap something together to show the bosses you've got something. Put out a press release and celebrate. Fire the team."

Without benchmarks and set goals that are checked against actual work, a company could end up with a whole lotta nothing.