One risks wasting huge sums by exploring supply chain solutions before identifying one's supply chain needs, says Steve Hopper, founder and principal of Inviscid Consulting.
Taking a page from the engineer’s handbook, Hopper says the first step in that field is to define the problem to be solved. Similarly, in supply chain, requirements come first. Solutions must match them. Otherwise, time is lost and money wasted.
“Unfortunately,” he says, “a lot of businesses have begun with looking at the solutions before they really knew what their problem was.”
The right place to start is with data, because usually it's a numbers-driven exercise. Determine what your orders and SKUs look like, what kind of customers you have, and how they need to be served. In the process, you get a clear picture of what success looks like.
“At that point,” says Hopper, “you can start looking at wonderful solutions, ranging from very manual to very automated and everything in between.”
Hopper recognizes that there’s a powerful drive to explore available solutions, especially when one attends conferences and exhibitions where technologies are on display. Nevertheless, he cautions would-be buyers: “There’s a danger for those that are easily swayed by things that are sexy.” A Ferrari might be the right solution for high-speed performance. But is it practical for transporting a family, towing a trailer or driving off-road?
Once data has been studied and numbers refined, a planning horizon must be determined. Is a prospective solution for today, where the company is expected to be in five years, or even further in the future?
The prepared buyer looks at growth factors, has a grasp on possible mergers and acquisitions and how the product mix is likely to change. “All of those have to be defined before the solutions can be looked at,” Hopper says.
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