Supply chain apps ROI hard to achieve, say users

IT managers at a conference held by i2 Technologies' user group detailed some of the ins and outs of supply chain management...

IT managers at a conference held by i2 Technologies' user group detailed some of the ins and outs of supply chain management projects, including challenges in areas such as managing software changes and controlling the scope of installations.

Four i2 users admitted that they have succeeded at getting paybacks on their investments in i2 applications, but admitted that the process was not an easy one.

Chip maker ON Semiconductor  "invested a lot" in change management procedures and end-user training as part of an i2 rollout starting in 1997, said Ravi Vancheeswaran, manager of supply chain management services, systems and processes. "I cannot overstate the amount of change management within i2," he added.

The same applies to training supply chain planners and other workers to use the software. "We were completely changing the way planning was done," Vancheeswaran said.

The software has helped ON increase productivity, enabling the company to downsize its supply chain staff and improve the way it handles inventory.

Thomas Strubel, director of supply chain systems at PSS World Medical in Florida., said companies doing supply chain rollouts must keep strict scope-control procedures in place, even if it means limiting the number of features that systems will handle once they are installed.

"If we're going live in two months, you can't throw curve balls outside the scope," Strubel said. PSS, a distributor of medical products, runs the i2 Six suite of applications and has seen improvements in its order-fill rates and customer service levels since it installed the software.

In an interview at the Directions 2003 conference sponsored by the Atlanta-based i2 User Group, i2 chief executive officer Sanjiv Sidhu said there were "misconceptions" about users' ability to achieve return on investment on supply chain projects. But he added that i2 is trying to make it "easier and easier" to use its software.

Last week the company announced plans for an applications upgrade that will include a set of prebuilt data workflow processes for connecting operations across various departments within a company.

But for Cindy Cruzado, global director of strategy at WorldWide Retail Exchange, getting end users to agree on the best ways to exploit i2's applications was a bigger challenge than installing the software.

The exchange, which supports business-to-business collaboration between retailers and suppliers, relies on i2's procurement, collaborative planning and content management software.

The installation was complicated by the fact that business processes differ from country to country.

Cruzado added that to resolve the differences, IT staffers had to get companies that are participants in the exchange "to sit across from their customers and talk about the challenges".

Marc L Songini writes for Computerworld

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