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We need truly comprehensive visibility, but this isn’t simply a technology issue. You need smart-data technology, to be sure. But you need smart people as well.
Informational silos slow the decision-making process and can lead to poor results. We face this in everyday situations. You can expertly navigate around traffic snarls thanks to the impressive capabilities of your GPS system to aggregate real-time data on road conditions. But when it comes to finding a parking space at your destination, you’re either in the dark or have to stop and fire up another app. Your favorite aunt may have a well-curated Amazon Wish List. But if you’d only checked your email, you’d discover she’s taken a trip to Tuscany, and won’t be able to sign for that generous gift you’ve just sent her.
In business, this presents problems far more serious than being late for dinner. There’s no doubt we live in the Information Age, and every business that operates at a level of sophistication beyond a hot dog stand relies on information technology to make things run smoother. We have lots of shiny new toys and systems to play with, and they often provide dazzlingly useful information. The trouble is those systems only provide information in the limited realm in which they're designed to function.
It's time for company executives to focus on getting truly holistic visibility across departments, systems and functional silos. This is, however, far from being purely a technology problem.
How We Got Here
We’re victims of our own success in building a truly global supply chain. When Henry Ford opened his first automobile factory, a manager in charge of assembly could easily check on how the production of axles was coming along by walking to the other end of the factory to find out.
Today it’s a long walk.
Our global supply chains span multiple countries, time zones, language barriers and partner companies. The number of touchpoints, both physical and virtual, for any given product has increased by orders of magnitude, and the amount of aggregated data being generated along the way has become more than any human brain can handle.
Meanwhile, the stakes are high. The ability to react quickly and intelligently to changing market conditions means the difference between success and failure. Automation is one of the keys to accelerating the pace, and keeping up with the reality of today’s marketplace.
What I mean by automation is a smart information platform that gathers up the disparate data from all the different sources available (internal and external enterprise systems and syndicated data, as well as unstructured data sources such as social networks), analyzes the data and presents it in ways that are useful and actionable right now. We can’t wind the clock back and persuade everyone to use a standardized set of data protocols or a single information delivery system. This is far beyond Apple vs. Android. Businesses have invested billions of dollars in IT systems over many years – legacy systems, best-of-breed solutions and one-stop-shop packages, all handling the entire lifecycle of a product, from concept through to customer delivery.
In the past, when supply chains were in the hands of a single, multi-department enterprise, that worked okay. But that’s not the world we live in now. If your parts manufacturer in China has an outage, you need to quickly onboard another partner or supplier, and it might be in Vietnam, with a different order-management system, port and order lead time.
There’s no way we can get to a nirvana where one system solves all problems all of the time. But we can have one platform that helps us pull all that valuable data together into one place, and allows us to see a clear picture amid the noise.
A Business Process Challenge
This isn’t a new idea. And it’s what we all want. But how do we get there? The first answer to that question is: Don’t leave it to the IT department!
At the root, data integration is not an IT project. Data management needs to be a business process. Every data element needs to have a business owner who understands its usage, and it can’t be someone in the IT department.
What I mean by this is that it’s not enough to record the value of an element – say, the number of days a containerload of sneakers has been in transit from Asia. Someone has to decide whether that number is the right answer according to your supply chain model; that 12 days is okay, but 25 days is not. And that’s a business person’s job.
In most cases, it’s not a set-it-and-forget-it task, either. When we set up ranges for what’s considered normal or abnormal, we want a business person to be alerted when something goes out of tolerance, so they can make intelligent decisions about how and when to act. We want systems that can interrogate the data to identify potential abnormalities and opportunities and then learn based on our decisions about what actions to take. Delays in receiving Christmas decorations may be fine in August, but an emergency in November. The administration of supply-chain master data needs to be an activity that happens every day, because it’s tied to a business process, and critically important to running your business. That makes it no longer an IT project.
Let’s go back to the original examples. If you’re driving to a friend’s house in the suburbs, you most likely don’t need to worry about parking, but if you’re heading to a restaurant in downtown Manhattan, it could be a deal-breaker. On the other hand, maybe there’s a cheap parking garage next to a subway line that takes you right there. If you’re sending your aunt a box of tile, it probably doesn’t matter if it sits on her porch for a week, but a fruit basket isn’t going to do so well. There’s no software system in the world that can reliably make those decisions for you; you have to use the information to augment your decision-making process.
Learn to Two-Step
Ultimately, this is a two-step process. You should be breaking down barriers and accelerating the pace of communication by investing in smart data technology. But the second, crucial step is to make sure the right people are actually receiving the data appropriately, and in a way that they can act upon it.
The two elements are reliant on one another. You can’t just say: Make this a business process, good luck. You need technology to do the job of collecting, cleaning, monitoring, flagging and transforming data related to every business metric; then make it into a process. Intelligent, automated systems are the key to pulling all this off. Organizations need to expand their visibility across the entire organization to bring together market, product and channel information into a single view on a single, integrated platform. They can then apply human intelligence to achieve a transformative supply chain management environment.
Allan Dow is president of Logility.
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