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When it comes to evaluating and acquiring new supply-chain technology, companies need to adopt an "order-centric" approach to dismantle long-standing organizational silos, says Buck Devashish, chief commercial officer with MP Objects.
SCB: It's often been said that business-process change precedes technology and software, but that dynamic seems to be changing in the supply chain. In what way?
Devashish: Throughout the last 20 years, the pace of change in technology has completely overtaken any other type of change, and supply chain is where the rubber meets the road. Think of the iPod, which came along 15 years ago. The iPod took off because of iTunes, which was cloud-based technology for delivering music, one song at a time. That upended the entire music industry supply chain. Then Spotify comes along, and iTunes is gone. So it's a case where technology comes into place and smart supply-chain practitioners have to align their processes to it. In the old days, a big consulting company would come along, do some business process changes, and you would fit the software to it. Now it’s the other way around.
SCB: Give me an example of how this evolution is affecting supply-chain technology.
Devashish: One is 3D printing. Think of what NASA has done with it. The International Space Station gets supplies from Earth, and that's the biggest logistics puzzle around. How do you ship stuff in time? Rockets might crash and not reach there. They need lots of little parts: screws, nuts, bolts. So NASA is using 3D printing, sending blocks of material and printing out parts on site at the space station.
As big changes happen, such as blockchain, machine learning and the Internet of Things, industry prepares for it. Historically, the supply chain has been very compartmentalized, very siloed. So looking across these different silos becomes important.
SCB: What kind of process changes must happen in order for the order-centric supply chain to become a reality?
Devashish: People need to start spanning across it. Think of an order that’s particular to one company, which needs to be rushed to the customer. If you can combine that with something else and optimize shipment, you've saved money and can maybe serve the customer at a lower price. You can tie together inbound and outbound fulfillment. It becomes a seamless flow from end to end. But if you work in silos, and optimize only inbound or outbound, one might impact the other one badly. You have to change the paradigm, look across the whole thing and think about the inbound-outbound combination.
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