Ruthless Standardization – a blessing to IT but a curse to Operations!

Talking with the logistics director of a Fortune 50 Company, he related their conversion to SAP. He described it as “Ruthless Standardization.” Immediately, images come to my mind of a group of IT geeks on horseback, armed with axes and swords, riding through the ranks of Operations people – indiscriminately slaying them.

While my imagination may be a little far fetched, Operations do appear to be the victims in standardization. In this instance, Operations loses its ability to:

• Increase load size using optimization technology
• Move orders. For example – a full load of product made in Atlanta must ship to a Seattle customer from the local warehouse rather than direct from the plant

How is it that the complexities of the US market are ignored in the quest for standardization? Why are small countries, like my native land of New Zealand – with 4 million people – and one DC treated the same as the great US market? I have a conspiracy theory. My belief is that the IT folks believe that the millions of dollars spent in the operations area is hidden. At the end of the project, they can point to IT head-count reductions and “hard savings.” Operations expense, after all, is often confused by the various “world” changes. Operations costs increase but it is all blamed on fuel or insurance… not paucity of systems. In the case of the Fortune 50 Company, the cost will be many millions in one division alone.

I am not sure if it is possible to convince the IT folks that “keep it simple” (KIS) is stupid. If this were me, I’d add a line to my budget – “the cost of ruthless standardization” – and track all the cost to that.

The bottom line: IT rules the world – resistance is futile!

Comments: http://transportationoptimization.blogspot.com/

Stimulus package or highway funding?

We all know that the infrastructure is under pressure. Congested roads, bridges that are in urgent need of repair, and roads that should have been ripped up years ago are everywhere. Yet both presidential candidates are talking about a stimulus package – giving money to consumers who will buy flat panel TV’s made in China. Here is an idea: invest the same amount of money in the roads and bridges we use every day. While we don’t need or envision anything on the scale of the “New Deal”, a focus on bridges, for example, will create good jobs for construction workers, steel manufacturers and equipment manufacturers. The value to industry is huge. The trickle-down impact will be great – and the country gets lasting benefits from stimulus. Can somebody please tell Mr. McCain & Mr. Obama?

The bottom line: Consumers and the economy will benefit from investment in infrastructure

Comments: http://transportationoptimization.blogspot.com/