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By Mark Nicholson and Adam Boone, Syndesis
A story goes that Wal-Mart noticed an odd thing happening to its inventory in September 2001.
In the days that followed the 9/11 terrorist attacks in the U.S., Wal-Mart detected a significant spike in the number of American flags being sold in its stores across the country. Based on this data, the company quickly bought up the available stock of American flags from every supplier it could reach. The company’s competitors, the other discounters, noticed the spike some days later and attempted to buy more flags. By then, Wal-Mart had effectively cornered the market, and its competitors were unable to restock their shelves.
This story has become something of a legend in the supply chain and operations management communities because it illustrates so vividly the power of using IT-driven inventory practices for distinct competitive advantage. Whether or not this particular tale is true, Wal-Mart certainly has raised the matching of supply to demand to the level of an art form. Its adoption of point-of-sale inventory tracking set a new standard in how inventory should be managed in a retail environment and supply chain. The Wal-Mart example highlights the benefits of adopting a “live” and “adaptive” approach to resource management and inventory tracking.
Adaptive resource management is a relatively simple concept. In essence, adaptive resource management treats inventory as dynamic assets and their management as a dynamic process with the aim of perfectly matching inventory capacity to the actual patterns of demand and consumption. This is an approach proven not only by Wal-Mart but by many firms that have adopted the principles of lean operations in the manufacturing and logistics arenas as well.
While there are clear differences between retail and telecom, the time has come for telecom operators to consider how adaptive resource management can provide them with a competitive advantage and a basis for lean operations.
Why Now?
Telecom operators are under intense pressure to transform their operations and their businesses. Competition and the need to increase per subscriber profit are driving them to concentrate now more than ever on higher-margin, “sticky” application and content services like IPTV, VoIP, software-as-a-service, and gaming. This means not only developing and launching such advanced services in weeks, rather than months or years, but also delivering services efficiently and virtually instantly to any endpoint that can support
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Following the 9/11 terrorist attacks in the U.S., Wal-Mart detected a significant spike in the number of American flags being sold in its store and ... cornered the market |
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them. But transitioning to application-based services from traditional static connection-based services is no easy task.
These new services are multimedia, interactive and real-time. As a result, they impose much greater resource-sharing demands on the new converged network than traditional services, and they call for much more dynamic response from both network and supporting operations. Ensuring the “customer experience“ for these services requires precise provisioning and control over how they share communications infrastructure and applications resources. This is particularly difficult in carrier environments where networks are geographically dispersed, subject to a range of federal and municipal regulations, and feature diverse capabilities, technologies, and transformation roadmaps.
On top of more complex provisioning and more demanding subscribers, today’s CSPs also face pressure from shareholders to maximize their return on network assets. So even as the cost of new communications technology falls and the capacity supplied by that technology increases, CSPs must pursue “build what is required” strategies and optimize resource utilization.
In the face of these challenges, service fulfillment depends heavily on the ability to efficiently, exactly, and automatically match resources (i.e., shared network capacity and application capabilities) to the changing needs of next-generation services. For offerings such as VoIP and IPTV, this can include managing high-volumes of feature changes as well as fine-tuning bandwidth, latency, and QoS across diverse equipment and bearer technologies.
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