Be Careful: Use A Phased Approach For ImplementationBe Careful: Use A Phased Approach For Implementation

Fleming, Knowles Electronics, On Semiconductor, and TaylorMade-Adidas Golf all pulled off successful supply-chain software efforts in large part because they did it in phases. "When a company goes in and tries to implement an end-to-end massive supply-chain project, most of the time they either stall or fail," says Dwight Klappich, a Meta Group analyst. A phased approach is what works, he says.

That's how Fleming approached its Manugistics Group Inc. implementation. Starting in 2000, the wholesaler centralized the logistics management of all its inbound products using Manugistics' transportation-management software. At the same time, it implemented forecasting and procurement software from JDA Software Group Inc. The payback was immediate. Instead of individual distribution centers negotiating prices with carriers, Fleming negotiates the transport of goods nationwide to get better rates. The company is getting ready for an upgrade of the Manugistics software that promises tighter integration with the JDA software.

The ultimate goal, says transportation systems manager Tre Ventling, is to create nationwide synergies between all the distribution centers so Fleming can use "continuous move" fleets. That means a driver from the Dallas distribution center drops off goods for a customer in Oklahoma, picks up goods in the Oklahoma distribution center, and delivers them to a customer in New Mexico, where goods are waiting to be delivered back to a customer in Dallas. Fleming could save as much as 6% in transportation costs using continuous-move fleets, Ventling says.

Moreover, Fleming could be so efficient that it could actually make money by picking up goods typically delivered to the wholesaler by a customer. "Chiquita, for instance, could give us an allowance to haul the bananas to our distribution site from their dock. That allowance is basically revenue," Ventling says.

And that's when things really get good. "Every dollar you don't spend, you earn. But that's not revenue," Ventling says. "We're going for the biggest bang." For many companies, it's high time supply-chain software delivers more bang for the buck.

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