Monday, September 29, 2014

Technology and SCM in Small Businesses

My parents own a small business here in Pittsburgh called Extended Day Services (EDS), which is before and after-school child care service that runs directly in conjunction with the school districts it serves. So, instead of driving your kid to another location for after-school activities while you finish off your shift at work, the child remains within the confines of the school he or she normally attends, but is entertained by employees - often also certified teachers - of my parents' company. Here's a little shameless self-promotion :) -

Anyway, EDS started before I was born when my parents were newly-weds, and the number of clients was puny. We're talking 25 kids in one school district. Since then, however, the company has expanded tremendously to include 20 different schools in 8 districts spanning from Upper St. Clair, PA to Beaver, PA. My dad is the tech geek behind this operation, and as you might imagine, his job has become increasingly more complicated as my mom writes to other school districts about how EDS can help their families - and obtains their business.

Now, the Forbes article that we had to read for this week only talks about the role of cloud computing in the supply chain of huge, international businesses like Samsung, P&G. My parents' company will surely never be that big, but I think it's important to emphasize that cloud computing and other technology is just an important for smaller businesses when it comes to managing supply chain functions.

EDS ultimately offers services, not products, but in order to provide children with an enriching after-school experience, my parents have to keep track of a million things that they order, receive, and then send out to the different school districts - paper, markers, snacks, etc. My dad's job is essential to keeping all of that organized. He built (and now maintains) a central database for these different transactions that keeps track of how many boxes from the latest order of Oreo cookies go to Eisenhower Elementary School, for example, or how many bottles of green paint were delivered to EDS's administrative office. This information ensures that each EDS location has ample supplies for each week. Data like this is also stored in a cloud and analyzed at EDS as branches of the company grow. For instance, if 50 boxes of colored pencils were delivered to Peters Township Middle School in 2013, and that particular EDS location has seen growth in the last year, then EDS staff in charge of ordering goods knows to purchase more the next time an order in placed.

The Forbes article also mentioned that "only 12% of enterprises have "extensive" communications with their network, while a quarter are still relying on e-mails, phone calls, and faxes." Here is where a small business excels in terms of communication within a supply chain. Since there are fewer people with whom to communicate in a smaller company, "agile, real-time communication," as the article calls it, is much more sustainable. At EDS, one central administrative office houses everyone, making communication really easy. My parents are always talking business, even when they aren't at work; for EDS in particular, this is a strength and a potential reason why it has expanded. My dad's nifty database is nice too, since it shares analytical information with everyone in the office. Collaboration is also mentioned in the article as being key to solving supply chain problems faster. Again, small business have a higher tendency to promote more collaboration among employees simply because it's easy. Giant corporations, like some highlighted in the article, have a hard time coordinating meeting times among many employees, making collaboration and real-time communication difficult.

With a combination of technological infrastructure - like the database and the cloud - and the compact size of EDS's central office, I like to think that my parents are doing something right (they're both CMU alumni, by the way!). Do you think that enough small businesses are using technology to their advantage? Is there a way to make these advancements more accessible to smaller companies who don't have technologically savvy employees so that these business can grow too?


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