Executive Briefings

Supply Chain and IT Strategies Must Align Around Five Key Themes

Supply chain strategies are shifting their focus from cost/efficiency objectives to customer service, business agility and support for strategic business initiatives, such as "green" supply chains or supporting new business models. Many IT organizations have not revisited the relationship between IT and the supply chain organization to support these changing enterprise objectives. Enterprises should focus on five technology areas-business process agility, data management, analytics and performance management, collaboration and sensory networks-as the sources of technology-enabled supply chain innovation.

1. Business Process Agility and Adaptability: Increasing pressure will come from supply chain executives who recognize the importance of process agility in delivering competitive advantages within an increasingly complex and chaotic operating environment. Applications traditionally have been functionally focused, not process-focused.

2. Data Management: IT must engage the supply chain organization to understand how data across different applications--for example, CRM, ERP, supply chain planning (SCP) and warehouse management systems (WMSs)--must be managed in support of new supply chain business processes.

3. Supply Chain Analytics and Performance Management: Performance management plays a crucial role in SCM. Understanding the behavior and performance of the supply chain is a strategic necessity. Supply chain organizations increasingly will seek a combination of business application analytics (how the current process is working) with business intelligence (BI) analytics (the root causes of the symptoms visible in the supply chain) to understand the dynamics of their operations. If, for example, a supply chain organization is pursuing cost reductions, then it must understand the root causes that influence the significant cost drivers in its business sector.

4. Supply Chain Collaboration: SCM has moved from the integration and management of internal functions to key external partners, and increasingly toward the permanent and transient members of the supply chain ecosystems in which the company will be operating. The concept of supply chain collaboration has evolved into the competencies of developing and managing multienterprise business processes.

5. Sensory Networks: As the scope of the supply chain extends beyond the "four walls" of the enterprise, driven in part by globalization and virtualization, the deployment of sensory networks to help the organization sense the condition of the extended supply chain will become a key plank in a chaos-tolerant supply chain strategy. A sensory network can be defined as a group of IT-based sensing technologies that provides real-time visibility of events and facilitates the management of and ongoing analysis across the extended supply chain. Sensing technology can take the form of bar codes, radio frequency identification, GPS and wireless.
http://www.supplychainbrain.com

Supply chain strategies are shifting their focus from cost/efficiency objectives to customer service, business agility and support for strategic business initiatives, such as "green" supply chains or supporting new business models. Many IT organizations have not revisited the relationship between IT and the supply chain organization to support these changing enterprise objectives. Enterprises should focus on five technology areas-business process agility, data management, analytics and performance management, collaboration and sensory networks-as the sources of technology-enabled supply chain innovation.

1. Business Process Agility and Adaptability: Increasing pressure will come from supply chain executives who recognize the importance of process agility in delivering competitive advantages within an increasingly complex and chaotic operating environment. Applications traditionally have been functionally focused, not process-focused.

2. Data Management: IT must engage the supply chain organization to understand how data across different applications--for example, CRM, ERP, supply chain planning (SCP) and warehouse management systems (WMSs)--must be managed in support of new supply chain business processes.

3. Supply Chain Analytics and Performance Management: Performance management plays a crucial role in SCM. Understanding the behavior and performance of the supply chain is a strategic necessity. Supply chain organizations increasingly will seek a combination of business application analytics (how the current process is working) with business intelligence (BI) analytics (the root causes of the symptoms visible in the supply chain) to understand the dynamics of their operations. If, for example, a supply chain organization is pursuing cost reductions, then it must understand the root causes that influence the significant cost drivers in its business sector.

4. Supply Chain Collaboration: SCM has moved from the integration and management of internal functions to key external partners, and increasingly toward the permanent and transient members of the supply chain ecosystems in which the company will be operating. The concept of supply chain collaboration has evolved into the competencies of developing and managing multienterprise business processes.

5. Sensory Networks: As the scope of the supply chain extends beyond the "four walls" of the enterprise, driven in part by globalization and virtualization, the deployment of sensory networks to help the organization sense the condition of the extended supply chain will become a key plank in a chaos-tolerant supply chain strategy. A sensory network can be defined as a group of IT-based sensing technologies that provides real-time visibility of events and facilitates the management of and ongoing analysis across the extended supply chain. Sensing technology can take the form of bar codes, radio frequency identification, GPS and wireless.
http://www.supplychainbrain.com