A lack of strategic organizational and supply chain alignment continue to plague the vast majority of organizations. The demand and supply sides of organizations continue to be mismatched, creating substantial performance challenges, including shortages, high inventories, and excess costs. The distribution and marketing sides of organizations continue to lack coordination with operational and sourcing capabilities. Leading-edge companies are quickly recognizing that alignment is necessary in order to respond rapidly to changing environments and use resources in the most efficient manner. Lack of alignment results in organizational islands that utilize resources how they deem appropriate and are not focused on organizational priorities. Lack of alignment results in wasted resources, prevents rapid organizational flexibility and agility, and is detrimental to performance. Key success factors are creating a "big picture" and a learning organization that adapts to changing environments. Specifically:
"¢ Creating a "˜Big Picture'. A key element for organizations moving forward is having everyone in the organization "sing" from the same "music sheet." Among the greatest barriers to performance are the internal organizational silos and internal competition that are a result of working from different sources of information and being rewarded based on different performance metrics. The result is suboptimal performance. Superior supply chain performance comes from unification of these islands of performance through the creation of a unifying "big picture," use of technology to unify disparate organizational areas - purchasing, production, and distribution - into a single data base everyone can use, the creation of joint decision making processes, and the use of unifying performance metrics. Advances in software technology now make it possible to examine disparate data bases - purchasing, operations, CRM, distribution. Creating a unifying data base from these disparate sources is critical in order for companies to create a "big picture" for the entire organization.
"¢ Creating a 'Learning' Organization. "Big data" and analytics enable the mining of huge quantities of data and provide impressive insights about the environment, including customers, markets and performance. The problem, however, is converting this massive data into usable information the organization can absorb and effectively use to make decisions. Blindly investing in technology does not solve the problem. Acquiring even the best technology will not help performance as organizational processes need to exist that use this information in decision making. In fact, technology overlaid on top of poor processes just solidifies poor performance. Leading companies understand that they cannot just invest in these technologies without the adequate organizational processes in place. This requires creating a learning organization where processes are in place to absorb the new information. A "learning" organization is one that facilitates learning and is continuously transforming itself based on the new information. These organizations "absorb" information and "adapt" accordingly.
In 2013 companies can be expected to increasingly restructure their organizations to create a functional alignment where all members understand the "big picture" and where performance is measured based on unifying metrics. Analytics and technology will play a key role in helping unify disparate data bases into one that can help break down internal silos and enhance collaboration and decision making.
Keywords: supply chain management, supply chain management IT, supply chain management solutions, supply chain planning, performance measurement
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