The appetizer was scrumptious, the entree divine. But don't thank the chef; thank the CIO running the supply chain.
In an enterprise, the supply chain is the lifeline between raw materials and end products or services. Nowhere is that more apparent than in the food and beverage industry. Now the cloud is making its presence known in restaurants and other eateries in the form of Web-enabled business intelligence.
National brand restaurants like PF Chang's, Potbelly Sandwich Works, and Famous Dave's depend on daily deliveries to feed customers. Coordinating those supplies in the past has typically been difficult for restaurant distributors that supply the needs of these restaurants. A misplaced order or incorrectly packed delivery often results in extra shipments or "will call" pickups.
How can a distributor maintain a comprehensive view of the supply chain without overinvesting in a datacenter, and still make it home in time for dinner? Well, I recently read how a restaurant supply distributor is using cloud-based business intelligence approach for its supply chain.
Distribution Market Advantage (DMA) serves more than 50 different customers, including the three mentioned above. Each restaurant has its own specific product needs and rules for ordering. A simple product like ketchup may have its own individual business procedure for ordering and shipping, even though the same product is going to two restaurants right down the street from each other.
Typically, distributors can avoid bad orders by cross-referencing stock and delivery information. The problem DMA found, however, is that its data warehouse was unable to access relevant and timely information to make intelligent decisions. DMA managers were sometimes faced with extra inventories or multiple deliveries. Additionally, the company reported that it did not have the money or people to develop, install, and maintain a proper business intelligence software suite that could have solved the problem.
"We were essentially using Microsoft Access to create reports by combining intricate product cross reference files with a fast moving river of invoice transactions. It was tedious, time consuming, error prone and non-scalable," Jim Szatkowski, a DMA vice president noted in a customer case study.
The answer for DMA came in the form of a cloud-based BI tool that extracted the transactional data from the company's data warehouse and made it available to its various distribution centers. Managers could now verify customer agreements and identify problems in minutes instead of hours. The company reported saving $13,000 in costs in one year as a result of adopting cloud-based BI.
The value that companies like DMA are seeing in cloud-based BI is apparent. Business Intelligence ranked No. 5 on the list of the top 10 technology priorities for CIOs in 2011, according to Gartner Inc. in its annual global CIO survey. And enterprises that need Web-based analytics and reporting tools are eager to look for self-service products instead of relying on an IT department to generate reports.
As ThinkerNet contributor Jeff Kaplan points out in his latest blog, "the strategic value of these [BI] services can make them 'stickier' and help create a new form of competitive advantage."
What I'm hearing from CIOs, however, is that not all cloud-based BI systems are alike. Some require heavy integration, while others offer only lightweight dashboards.
While cloud-based BI may be making a dent in restaurant supply distribution, CIOs searching for the right cloud-based provider without looking at the menu first may wind up sending the meal back.
— Michael Singer Senior Editor, Internet Evolution, Moderator of the Executive Clan and Midmarket Clan.