My friend Jim Messner of Alticor needs a supply chain planner. He has been looking for 18 months. His efforts have been focused and diligent. He wants to put a planner to work in Michigan, and thinks that I can help him. My efforts have yielded no takers. Even in these days of record unemployment in the state of Michigan, no one has called.
Last week, unemployment hit 10.2% in the United States. There are six people chasing every job. Anyone that has visited Michigan has felt the grip of the record level of unemployment on the local economy. There is no question that unemployment is the number one issue in Michigan. In this once thriving industrial economy there are not six applicants for every job; it is higher than the national average. It is a 25 applicant to one job ratio. Yet, Jim's phone is not ringing off the hook.
The reoccurring joke at the AMR Research supply chain forum is that same companies are chasing the same planners. They are recycling the same talent. There is a limited pool of really good planners. They are in demand. Company strategies to use planning as an entry level position have largely failed.
Seven years ago, through a strange set of circumstances, I had a debate with Sanjiv Sidhu, founder of i2 Technologies. I remember it vividly. It was late at night, and Sanjiv was contesting my position on i2's future. As an analyst, I had made a statement that the lack of planning talent would constrain i2's growth in the supply chain planning market. I believed that Sanjiv and i2, as a software leader, would not be successful long term. My position was that the traditional software model would make him personally wealthy, but that with the current model we would not see true adoption of software planning. Sanjiv's position was that a bicycle manufacturer does not take the responsibility to teach their owners to ride, and that he had no responsibility to teach companies how to use planning technologies. We were at loggerheads. We hotly debated the topic for four hours from 11:00 p.m. to 3:00 a.m.
Today, Sanjiv is a rags to richesbillionaire. His company, i2 Technologies, once the symbol of innovation in the supply chain planning market is being sold to JDA. All of the intellectual capital is being sold to a supply chain technology aggregator. Fast forward seven years, and we find supply chain planning innovation largely relegated to self-funded start-ups, and Jim in a period of record unemployment waiting for his phone to ring.
Companies still struggle with the concept of planning. They are largely reactive. When supply chain planning technologies evolved, they were technologies chasing a buyer. In those days, you seldom saw a business card with the title of supply chain vice president. When you did, it was a reason to rejoice. This has changed. Last month, in my travel in Europe, I visited four companies that now not only have supply chain vice presidents, but have newly elected supply chain leaders on the board of directors!
Organizationally, supply chain management has come along way. The importance is recognized. The ecosystem to support these new leaders is not equal to the task. There is a vacuum in the market. Supply chain leaders were never trained on the basics of supply chain planning. They are largely reactive. They have been trained in manufacturing-centric organizations to chase Return on Assets (ROA). They have been rewarded by surviving the school of hard knocks. They understand order to cash and procure to pay. They struggle to understand planning. Just too few companies are good at it. They openly admit it.
Supply chain consultants are not up to the task. They have made fortunes on implementing Enterprise Resource Planning (ERP). As the demand for ERP talent wanes, consultants would like to fill the void. The basic understanding of supply chain planning by consultants has never been lower. They need retooling.
Sanjiv, today, can be found in a Yoga studio in Dallas. He is starting a new company. It is called O2. The market is poised to launch a new generation of planning solutions. There is new buyer. There is a need. The step change in underlying technology and innovation has changed what is possible. The consultants will not train to understand planning again until there is a pull in the market. Until the new solutions are launched and we kill the outdated notions of DRP and MRP and recognize that an order is not demand, the gears of wealth will not turn.
I will not be able to help Jim. His phone will not ring. The pool of available applicants for planning jobs even in this time of unemployment is just too small. He will have to compromise.
I am probably not going to be able to help Sanjiv. He has been rewarded by personal wealth and has not been held accountable for the greater impact of what he delivered to the market.
I am hoping to help the market to not make this mistake again. I don't believe that we can generalize about the responsibilities of bicycle manufacturers and software leaders. I do think that software leaders do have a responsibility to train companies to use their software. I believe that success in software sales should not be measured by personal wealth or software commissions. Instead, I think that it should be measured by the delivery of true value through usage of the software. It is time to stop playing the shell game. True value in software happens when companies use the software and an ecosystem evolves to drive excellence through usage.
What do you think? Do software companies that drive step-change innovation have a responsibility to train organizations how to use their software? Do leaders need to take accountability for the development of a supporting ecosystem?
