Analyst Insight: There’s a supply-chain renaissance underway for enterprises, whether retailer or product-centric suppliers, who rely on a network of partners. We call them the networked enterprise, and they require a new type of technology that’s driving the growth of supply-chain application networks. Yet there’s confusion about what supply-chain networks are, and how they might differ.
Supply chain is central to the networked enterprise. For supply-chain executives, transitioning to and supporting this networked business model requires implementing a trading-partner operating model that’s not just integrated, but interoperable. The model is codified in software and data — involving the automation of key processes, policies, performance metrics and technology — that govern and operate supply-chain partner relationships.
There’s confusion in the market as more companies jump onto the supply-chain network bandwagon. Many types of networks provide multi-enterprise support, but they’re not really supply-chain networks. Often, B2B and EDI companies are marketed that way, but they only offer certain features of the solution. To fulfill the above goals, the supply-chain network solution should include all elements needed to support an intelligent, real-time supply-chain process — not just B2B and visibility, but the business applications and data model — on one process-wide platform. This is the supply-chain application network. Included processes can support individual functions such as transportation, sourcing and procurement, or demand collaboration and management, or be supportive of key shared applications in an industry-centric partner network. There are also a few full-suite application networks today (compliant with the Supply Chain Operations Reference, or SCOR model) that support product-centric enterprises.
The key value in these networks is enabling real-time and intelligent process execution. In particular, they provide curated data, pre-built connections to major partners, and other services to enable rapid adoption by a company’s trading network. Another essential is the shared platform, one that supports the growth of trading-partner integration while preparing the supply chain for what’s coming next.
So what is coming next? We’re in a time of rapid technology evolution and global competitive changes. To wit:
Cloud-based shared and interoperable platforms will provide common and shared methods and the ability to achieve process synthesis. Considering the many trading partners, each with nuanced or major process differences, we can’t achieve rapid let alone real-time workflows and transactions such as inventory commitment and available to promise, drop ship, home delivery scheduling or demand and supply matching without fully automating these processes on a highly flexible platform that’s adaptable to each partner.
Big and unstructured data sources will allow greater visibility for optimization across key areas such as multi-mode transportation, optimal demand-supply fulfillment across multiple enterprises, risk reduction, and a finessing of our interactions with customers.
AI and machine learning will naturally lead to more autonomous operations over time.
The architectural platform supporting all this must be modern, not one that’s based on 20 or more years-old ideas such as store-and-forward EDI or on-premise enterprise resource planning systems, which can’t operate processes across trading partners.
Outlook:
In 2020 and beyond, we’ll continue to see the adoption of supply-chain application networks with big-data analytics, AI and ML within the platforms. Many enterprise software providers are developing various types of networks for their existing customer base. But many enterprises are migrating to supply-chain specialists’ platforms. The future work for users is leveraging these platforms to design fully networked imaginative process that create competitive advantage for all trading partners.
