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Charter Communications further streamlined its business in November when it went live across all systems with purchasing, inventory and forecasting software from JD Edwards.
The MSO headed down this path in April when it hired Shelbie Berry as vice president of procurement and supply chain management (SCM) and adopted her recommendation ?to bring on the rest of JD Edwards.?
Doing so is part of Charter?s larger and more ambitious project to reform its informal and characteristically ?cable? business practices by standardizing materials, reducing the number of vendors and centralizing purchasing. This effort may be less about loading software than changing a mindset.
?A lot of people have no concept of what managing inventory really is,? Berry says. ?And all of this is a shock to their system.?
Good fits
Berry is well suited for this role. She has extensive experience in manufacturing, where slim operating margins have driven the adoption of SCM technology. She also spent six years at Jones Intercable, where she implemented an enterprise solution from Lawson Software.
?We saved millions of dollars at Jones,? she says.
J.D. Edwards also seems a good fit. The Denver-based, software maker (acquired by PeopleSoft in August) was already supplying Charter with accounting software. And in February, Charter had decided to outsource warehousing functions to Broadband Services Inc., which also uses J.D. Edwards.
But this kind of technology remains relatively new to cable. ?We?re having to train most people from scratch,? Berry says. And the project has other pain points. It will reduce the number of vendors serving Charter and the quantity and variety of products they sell.
SKUs and vendors
As for product, Berry guesses that Charter currently tracks more than 10,000 stock keeping units (SKUs). ?I?m hoping that we can get down to 2,000,? she says. Charter also hopes to reduce overall volumes, thus speeding inventory turn.
The economics are straightforward. ?When you don?t buy as much and you?re holding less, you don?t incur all the cost of managing inventory,? Joshua Ginsberg-Margo, director of SCM business development for BSI, says.
Ginsberg-Margo believes that many MSOs could cut their inventory in half. But could eliminating parts on the shelf hamstring technicians in the field servicing older equipment? Or will reducing inventory result in the use of inferior or out-dated product? (For more on that point, see Telecrafter President Peter Mangone?s ?Sounding Board? essay on page 55.)
Berry sees no downside, believing that her team can accurately target the reductions. ?If (a product) is truly obsolete, we absolutely will sell it,? she says.
As for vendors, Charter sees two as the ideal number. For most products, that means fewer vendors. In the case of cable modem termination systems (CMTS), however, it means that Charter is no longer exclusively Cisco territory.
?We don?t want to be single-sourced; we don?t want to be more than two-sourced,? Berry says.
Going forward, vendors can expect more adjustments. ?We?ll really link in to where we can see their inventories, and have the PO (purchasing order) confirmed before our eyes,? Berry says. A potential benefit to suppliers of such intimate interfacing is more efficient, or ?level-loaded? manufacturing cycles.
New respect
As attention has shifted from reducing capital expenses to improving operating margins, inventory management has gained new respect in cable. ?This used to be the step-child of the business,? Berry says. ?Now it?s one of the most important areas.?
In retrospect, the SCTE?s closing of its subcommittee on material management inventory (MMI) in mid-2002 was to some degree a reflection of that category?s maturity. The relevant software tools are commercial grade, and implementations entail custom work that cuts across industries.
Furthermore, operational managers in this field have reason to avoid collaborative committee work. ?Purchasing people should never get too cozy with one another,? Berry says.
?You have to really, really be careful.?
?Jonathan Tombes
In a meeting with members of the SCTE?s hybrid management sublayer (HMS) subcommittee, CableLabs proposed a firmware solution to the problem of DOCSIS-based transponders that require testing.
Two types of product have emerged, thus far. AM Communications and Electroline have integrated DOCSIS modem technology into their transponders. CableWare Electronics has a two-piece solution using an already-certified DOCSIS modem and a device that interfaces between the modem and the monitored equipment.
The problem for testing involves the integrated transponder.
?CableLabs tests cable modems. Cable modems have an Ethernet port. There is no use for a transponder to have an Ethernet port,? explains John Mahan, product manager for the broadband products group at AM Communications.
CableLabs anticipated the emergence of embedded (e) DOCSIS devices, having released the applicable spec in March. The second version will be out by the end of this year, Ralph Brown, CableLabs vice president and chief software architect, says.
Going forward, testing such devices could involve an SNMP-controlled, packet-generating application that CableLabs calls a software loopback for eDOCSIS (SLED).
Essentially, this gives suppliers a choice. ?They can go with an exposed Ethernet interface, or they can embed the SLED,? Brown says. ?Whichever is most cost-effective.?
More questions
Meanwhile, the question of whether these transponders should carry the conventional two IP addresses or one has surfaced.
?There are issues that one has to address in either scenario,? Christopher Leidigh, director of communications and technology research at APC, and chairman of the HMS group?s DOCSIS subcommittee, says. ?There?s no one answer.?
Movement on that topic may be forthcoming when operators provide additional input at the HMS subcommittee?s meeting in early December, following the Western Show.
Behind these details looms a larger question: Is the industry really committed to better network monitoring?
?We talk a good game,? says Hung Nguyen, HMS subcommittee chair and senior staff engineer at Time Warner Cable. ?(But) we still look at monitoring as a necessary evil, and not even that.?
Whereas network monitoring and management are well-established (and funded) disciplines in the telecom industry, ?in cable TV we have to fight for every dollar we can, just to do a little bit,? he says.
?Jonathan Tombes
 Back to December 2003 Issue
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