A VC in Vacationland

Marketing & Sales Innovators: Zoom Info

By now, you have probably joined Linkedin, Plaxo, Facebook or the myriad of other business networking sites that have emerged in recent years.  These are generally useful tools to keep track of friends and business associates.  The best part is that their information is updates (by them) when they changes jobs, etc. 

But now there is zoominfo.  ZoomInfo scans the web and develops a profile of you (and over 38 million other professionals) based on web information.  It is a great site to find out fast, and mostly accurate, information on potential employees and business partners. Since the people on the site often do not know that they are listed, and the information comes from the web, the data can often be incorrect or incomplete.  But I still find it a great source to use when I want to get a quick profile of someone. It is much easier to access than Linkedin and much easier to find who you are looking for.  Think of it as a wikipedia for people's backgrounds, although like wikipedia, use the information with care.

So why are they a marketing & sales innovator?  Check out your own profile.  I'll bet anything it is incorrect or incomplete since you did not enter the data.  Your impulse will be so sign up for the "free" service and correct your information.  Then, of course, you will be bombarded with newsletters, offers,etc. which you can easily opt out of on the web site. And do not forget the ads every time you log onto the site to check out another professional. But they have you as a "customer" whether you like it or not.  And you will need to update the information somewhat frequently as they keep going to the web to find more stuff out about you.  Pretty good business model in my book and much more clever that the others.  We will see if becomes a dominant player long term, but they have my early bet to be a survivor.

The Biggest Mistake Entrepreneurs Make

They do not figure out how to monetize their business model.

I repeat.

The biggest mistake most entrepreneurs make is not figuring out how to monetize their business model.

My shortest post ever.

And I don't think I need to explain it in a lot of detail.

If not, let me know and I will do a longer post.

Update: In a few weeks, a longer version of this Blog will appear, due to a number of requests.

Supply Chain Innovators: UPS

Can eliminating left-hand turns in your delivery routes save you serious money?  UPS reports that eliminating the time-consuming left-hand turn for its 95,000 delivery vehicles has reduced fuel consumption by roughly 3 million gallons per year--not to mention the saving in driver time waiting for traffic to clear.

UPS is using a package flow optimization technology which, among other efficiency enhancing processes such as packing and sorting shipments and mapping out driver routes, dramatically reduces the number of left-hand turns drivers need to make across traffic.

No word on whether the software is yet available to other fleet operators, but I am sure that UPS would be willing to speak to other fleets about licensing the software, which they have done in the past with other technologies they have developed or purchased.

WIN-What's Important Now?

Lou Holtz's pep talk to his team before a big game always included WIN-What's Important Now as his final reminder to them before going out on the field.

After every play, ask yourself, what's important now?  What should I do best to be successful?

This is great advice for anybody involved in a start up.  One cannot afford mistakes.  To be successful, every action should be focused on making success happen.

Lou's advice is right on.  Charlie Weiss needs to instill the same ethic in Notre Dame, or they will continue to perform poorly.

Getting Real #5: A Cautionary Case Study

A Cautionary Real-Time Case Study: Cisco

Remember the inventory/production debacle at Cisco in 2001?  Perhaps the story got lost in the deflating of the Internet bubble, but it is worth recounting as we look at the promised and pitfalls of using real-time data to manage supply chains.

Cisco bragged in the Harvard Business Review in early 2001 about its "virtual close" software.  The CFO asserted that they could close their books within hours, and more importantly, "the decision makers who need to achieve sales targets, manage expenses and make daily tactical operating decisions now have real-time access to detailed operating data across the supply chain". However, within twelve months, the company had written off over $2 billion in inventory and laid off 8,500 people. 

In their defense, Cisco managers did say that the real-time forecasting systems prevented a more major disaster in later quarters.  But smaller competitors with less sophisticated technology rode through the storm without such drastic problems. What happened?

The big issue was growth, or rather being blinded by it and failing to look at any scenarios that modestly reduced growth to see what impact that would have on inventories.  Another problem was long lead times for key products.  Customers and Cisco sales guys got used to inflating orders to ensure that they would get what they needed.  When the slowdown in demand began, customers canceled orders quickly, leaving Cisco with a huge inventory bulge in its supply chain, the result of the famous "bull whip effect" in action. Since demand was so high, Cisco had previously locked up key product components with long-term supplier commitments, promising to buy all that was produced over a period of time, no matter what. 

The problem was exacerbated by the continuing use of real-time customer and sales person input into the forecasting system.  As long as everyone had rosy forecasts, the system kept telling suppliers to build the product.  When the rosy forecasts ended, some Cisco managers refused to believe what the market was telling them.  There was a three month period of denial and then they could no longer ignore what the real-time economic data was now telling them--which the economy was tanking. Unfortunately, the real-time Cisco forecasting models did not include macroeconomic factors or projections in their analyses.

So, what’s the final word from Cisco? The CFO later said that the "slowdown happened at Internet speed" and that "they were developing a new module for their forecasting system—it’s called a crystal ball".

Getting Real #4: What are Innovative Ways to Use Real Time Data in Management?

What are some opportunities for using real-time data beyond alerts and monitoring?

Real-time data is being used today by a number of innovative companies to improve supply chain performance and customer satisfaction. At Toyota, for example, when you buy a new car off a dealer’s lot, they are ready to dispatch the replacement vehicle to the dealer within 15 minutes of the sale. Similarly, Coca Cola vending machines in Japan are connected to the internet for replenishment management, allowing intraday refilling of high volume locations. Finally, Zoom Systems provides automated robotic retail stores in high-traffic airports and malls, full of brand name products such as iPods you want to buy. Like the Coca Cola machines, they are connected to the internet to allow fast replenishment and theft monitoring capabilities.

What are other examples of how real-time data can be used in future supply chain operations?

Customer Visibility

Customer-specific shipment monitoring is a way to improve service without making expensive changes to your existing distribution systems. Assuming many issues with customer shipments are caused by failures to anticipate issues in order picking, pickups and deliveries, real-time performance monitoring capabilities could be developed for one or more top(or most profitable) customers to avoid issues before they become problems. Remember that there is no guarantee that seeing problems can lead to instant solutions, but at least you can initiate some actions to mitigate problems.

Process Improvements

On-shelf availability improvement via RFID/UPC data analysis and store-level employment management is an emerging technology that has significant promise for solving the "last 100 feet" problem in retail. Often, suppliers have 95+% fill rates to the store, but on-shelf fill rates can drop below 80% if store employees, agents or DSD personnel are not correctly restocking the shelves. By monitoring real-time RFID and UPC data at the store level, suppliers can anticipate and even forecast when shelf shortages are likely to occur, resulting in higher sales and profits for both the retailer and the suppliers.

Automated Work Flows

Using intelligent agents to track/evaluate/fix real-time events in supply chains sounds like a technology out of Star Wars. But the technologies already exist today and are widely used in the IT infrastructure world to monitor and repair server and related hardware problems without human intervention. For example, knowledge that a carrier may have problems with a scheduled pick up could be used query the carrier about whether another vehicle could be dispatched, to find an alternative carrier from the preferred list if not and notify the customer of the new delivery arrangements, all without human intervention (unless needed).

Partner Collaboration

Multi-level inventory optimization and management across supply chain partners is becoming a critical management tool for companies with global JIT supply chains. Increasing layers of safety stock (or safety stock "creep") across multi-echelon supply chains which involve outsourced manufacturing, numerous suppliers and carriers as well as multiple distribution points can result in higher costs and misplaced inventory. Traditional inventory optimization, often performed locally by a specific supply chain partner with minimal knowledge of what other companies were doing in other parts of the supply chain results in sub-optimal decisions and lots of extra costs due to higher safety stocks. Innovative, multi-echelon inventory optimization models, using real-time data on manufacturing and delivery status, can significantly reduce safety stock levels and costs while actually improving customer service levels.

Mass Customization

Optimized supply chains to globally source products is not a new idea, but one that has been advanced by the availability of real-time information on customer wants and production/distribution availability. A number of software applications are emerging that build supply chains optimized to source customized products quickly and efficiently, including customizing and personalizing products and services for individual customers at a mass production price. Mass customization has been the dream of academics and supply chain pundits for years. The idea that you can order products that are truly individual and customized to your needs is not a new one. Amazon.com lists numerous books in the mass customization space. H-P, Nike, and Levi Strauss are examples of companies who have successfully used mass customization to develop specific products for individuals, generally at much higher margins than regular products. But the big issue for mass customization for most companies is that mass customization requires a unique and dedicated supply chain with different technology and manufacturing needs. New software is appearing which can solve many of those problems, across a variety of industries.

LARTE's

Location Aware Real Time Enterprises (coined LARTE by the Tech Blog cognoscenti) refer to companies who use real-time GPSS, RFID, wireless, among other data and technologies as an integral component of their business models. Think of FedEx and UPS who use these technologies to optimize pick up and delivery on a real time basis for their trucks on the road. Sears Home Services , among other technology and appliance service companies, use wireless communications to schedule technician repairs, notify customers of delays, access warranty record and service manuals and create/charge bills immediately to credit cards. Similarly, Frito Lay has used wireless technologies for years to compile store shelf inventory to ensure optimal truck stocking for next day delivery.

Next week, we finish the real time data series with a cautionary real time data usage study starrring a darling of the Internet revolution, Cisco Systems.