You’ve probably heard this from the cable company, the IT staff where you work, and from many other services that rely on technological accuracy.

But did a technical glitch ever dump you more than 140 billion dollars in the hole?

The 38-year-old man was stunned — to put it mildly — when his London bank informed him that his account was overdrawn by 100 billion pounds ($144 billion).

His wife said she noticed a “major discrepancy of two 50-billion-pound debits” in the account — news that left him stunned, shaken and physically ill.

The couple had checked the account the previous evening and everything was fine.

An understatement from Barclays bank about the slight oversight: “A technical error caused some customer accounts to be incorrectly debited. … We apologize for any inconvenience this may have caused our customers.”

Does that mean the bank will pay for your stay in the nearest hospital’s cardiac unit?

It’s probably because many vendors have been slow to make the switch from paper invoices.

Electronic Invoice Presentment and Payment (EIPP) has grown much more popular over the past two years, as an increasing number of have made the decision to let go of the security they associate with paper invoices.

Even though EIPP usually proves a value proposition for vendors, many have been reluctant to change their way of doing business.

Several fiscal roadblocks have been cited:

• allocation of time
• IT resources, and
• correctly identifying, purchasing and implementing the right system.

EIPP companies have been listening, and making it easier for suppliers to get on board.

For one, some of the software now on the market allows vendors to use their current billing system to send e-invoices securely. It used to be that making such a switch meant a lot of time and expense in adapting existing billing processes.

There’s another big incentive. As the technology grows and becomes easier to adopt and use, the return on investment has increased, too.

In many cases, Accounts Payable departments have reduced costs by up to 50% in only a six-month time frame.

So what are good little Procurement pros asking for this year?

• Better inventory accuracy
• More inventory turns, and
• Improved accuracy in order fulfillment.

That’s not too much, right?

Well, Santa has the answers.

He’s stuffed your stocking with five ways to help make those wishes come true:

• Take a snapshot. What SKUs were the most popular in the past year? What inventory took the most time to pick up and prepare for movement? Are the high-traffic items in the high-traffic areas? End of year is a great time to run through these questions. As we all know, customer demands and needs change, and something as simple as adjusting the layout can have positive effects throughout the operation.
• Cross-train staffers. Make it one of your New Year’s resolutions. The more versatile your staffers are, the stronger you are when it comes to successfully handling challenges. Remind reluctant staffers that the more they’re capable of doing, the more secure their job will be.
• Get me to the customer on time. Make it your No. 1 priority to improve the on-time rates for fulfilling customer orders. Find out what the elite in your business are doing — and make that your on-time delivery target. You can’t go wrong by making customers happy and confident to do business with your company.
• Upgrade aging technology. If your warehouse management system (WMS) is more than 4 years old, it’s worth checking into available upgrades — or even making the leap to a new system. If the system you implemented 4 years ago has saved your company time and money, it’ll be an easier sell to show execs how much more time and money you can save. Otherwise, it’s a good time to run a price-check on other technologies, such as bar-code scanning or RFID. Prices are dropping as use rises.
• Monitor best practices. Either through Web sites, magazines, trade groups, conferences and other opportunities, check out what the other folks are doing and how they’re doing it. Your peers can often be your best source of information for what’s really working and what isn’t.

Problem: It’s a desert landscape around Prescott. The store moved one unit last year.

But the blunder wasn’t uncovered until an outsider came in and took a fresh look at the store, and began asking questions.

This true account is a product of Home Depot’s campaign to transform its supply chain and streamline inventory operations.

The major component of this makeover is changing the way product gets to Home Depot’s retail outlets. Before, about 80% of products were shipped directly from manufacturers to stores.

This had the potential for creating chaos, in terms of visibility and efficiency. If one location lacked an item, it was recourse was to call around and try to find it at another location — or simply order a new unit. That often meant new units were being ordered and shipped while surpluses of those items gathered dust at other locations.

At the same time, there were locations that simply had too much inventory on hand.

Home Depot’s plan: Set up distribution centers, instead of direct store delivery. The distribution centers provided a central source of tracking product volume and availability. Now, Home Depot plans to reduce direct deliveries to 25% by 2010.

This system improves the efficiency of inventory operations, and transportation and labor operations.

It gave Home Depot the opening to begin using analytics and tools to improve replenishing — and much greater control over the financial planning process.

The dollars at stake are monumental, but the payoff is even larger: Home Depot estimates the changes and the new technology will cost the company $260 million through 2010.

However, the planned reductions and streamlined operations are likely to free up as much as $1.5 billion in working capital.

Many businesses more suited to the use of RFID (Radio Frequency Identification) have already gotten “in the game.” But a greater number of supply chain pros have waited patiently for technology to advance and for prices to drop.

If you considered RFID in the past but cost kept you from going any further, the price of tags and readers has declined significantly.

(RFID is a way of identifying supply chain goods, using data-transmitting tags. Tags can often be read from several feet away.)

Also, it’s now easier to tag and read cases and cartons in bulk. At the same time, technological advances have made it easier to link RFID results with existing warehouse management systems. This has resulted in a quicker ROI (return on investment) for many companies.

There are seven steps that can help you consider whether your supply chain operation is ready for further exploration of RFID:

1. Identify your needs and expectations. What inventory do you want to track with RFID? How often do you need to read it? How close will you need to be to read it? Will one type of reader work with all tags?

2. Do a little homework. Talk to fellow inventory pros who have experience with RFID. What were the ups and downs?

3. Set up a sample run. Tag some items and read them. Determine where visibility is most critical.

4. How’s it working? Looking at the results of your sample run, were the reads reliable? Does the RFID read system work in an environment that might be “noisy” with other electronic communications? Where were the shortfalls?

5. Is it worth the money? Is an RFID system better and more cost-effective than what you’re doing now? If not, it’s best to wait and try again in the future.

6. Determine the ripple effect. If you do implement RFID, what other aspects of your business processes will be affected? Will it mesh with your current warehouse management system?

7. Decide what to do now. Should you broaden the scope of your preliminary RFID implementation? Do you need to get more information? Is there something you want to try, by taking a slightly different approach?

What was a slow evolution in how supply chains operate has picked up a lot of speed lately, as more businesses opt for software to improve operations. Of course, there’s been a natural hesitation on the part of many companies to modernize Inventory operations, even if the upgrade promises to improve efficiency. But the companies that are upgrading their technology are lowering costs and improving profits by tens of thousands of dollars — and in some cases, millions of dollars.

Who wants to get left behind? Many things do not change when upgrading how your Inventory process works. Your vendors are still going to be key players, and you’ll be asking them to do more than they’re doing now. Once your company determines its Supply Chain Management (SCM) priorities, you’ll be prepared to choose the system that will help you the most.

It most likely will be Enterprise Resource Planning (ERP) technology, which is capable of automating, coordinating and streamlining your whole supply chain. With this knowledge you can begin searching for the best package for your operation.

Lower transaction prices and vastly shorter requisition-to-order times? Good news: It can be done. The key to pulling off these two feats is to move into e-procurement efforts.

e-procurement is much like it sounds — using the online world to execute your procurement duties. Sure, maybe you say, we looked into this in the past and weren’t impressed with what was available. As you know, though, times change and technology improves. That’s why it might be worth giving e-procurement a new look.

By reducing many of the hands-on elements of the procurement process, you’ll immediately reduce the risk of introducing human error into counts and calculations. That’s just the first benefit.

Now, the stats are rolling in – such as a recent study by Aberdeen Group — that substantiate the advantages that e-procurement can bring to virtually any procurement process.

It’s hard to argue with these numbers:

• Requisition-to-order costs: $69 before e-procurement, $35 after its implementation.
• Requisition-to-order cycle: 15.5 days before e-procurement, 3.1 days afterward.

Who’s going to argue if you’re streamlining the cost of transition of orders from the ordering location to the vendor, by nearly 50%? Slicing more than 12 days from the time it takes your requisition to hit the streets as an order is an incredible achievement.

There are steps you can begin to take now — baby steps — to kick off the process:

• Talk to your suppliers and ask if they’re capable of being part of an e-procurement system
• Talk to your own IT department about your company’s capacity to handle electronic purchase orders.

Many procurement operations already can handle electronic purchase orders, on a limited scale. Perhaps for you, this is the opportunity to demonstrate its value and efficiency on a larger scale.

Source: AberdeenGroup, March 2008