Think about your own company and what would be necessary to optimize your own internal processes. Decisions in inventory and production management are driven by and affect much more than procurement. Accounts payable, marketing, finance, product development-the list of functions and activities that could be made more effective through the sharing of supply chain data is nearly endless.
So think about the ways data could be shared throughout the organization. Would finance be able to improve decision-making relating to price negotiations or volume discounts? Could sales and marketing benefit from earlier, reliable knowledge of product availability? Should product development have clearer windows into the capabilities of various suppliers? Alternatively, could procurement make better buying decisions if it was more intimate with key trends in core sales channels?
Now, prioritize data sharing based on key performance drivers for your business. It is here where process owners who might benefit from supply chain data need to be engaged to determine where the most valuable data resides. Armed with estimates of potential value, a company can make better decisions on where to invest in processes and software to enable data sharing.
But internal views are only the beginning. In order to be truly effective in today's context companies need to learn how to manage an entire supply chain from their customers through their own internal supply chain into their suppliers' supply chains-and back.
Optimization across what amounts to an entire value chain is of course a tall order, made more complicated by the number of participants and the resulting mix of manual and automated processes as well as legacy software. It will also be influenced by supply and value chain participants' general sophistication and motivation. But again, the focus should be on prioritization: which data would be most valuable, next most valuable and so on within the overall process?
A good example of a fully integrated value chain might be an apparel maker working with retail distributors to share real-time, end-customer transactions. Such data could be used to fuel enhanced decision-making relating to colors, materials, inventories, logistics and a host of other meaningful variables and activities across the entire supply chain.
Similar examples can be found in industries ranging from consumer electronics to specialty chemicals. The point is, the evolution is toward greater sophistication in overall process optimization and data sharing throughout supply and value chains. But again, companies need to begin with an analysis of the drivers of value within their own businesses before making serious overtures into matters further upstream or downstream.
Closely related, companies need to determine which aspects of data collection, sharing and in particular, decision making might be automated. In so complex an array of interactions, no company can afford to devote all of the expertise nor all of the time required to make the perfect decision in every situation. However, if a company can map the drivers, choke points, contractual agreements and other elements of its supply and value chains with reasonable accuracy, it can begin to isolate those decision points where expertise-human intervention-delivers the greatest impact.
Overall, a BPM mindset can help individual companies and later entire supply and value chains create the most value. Certainly, a company will need to make compromises based on variables such as the capabilities of legacy systems, the systems used by customers or suppliers or the cost of available technologies. But armed with a careful, BPM-focused analysis, it will be easier to devise essential decision rules and prioritize needed functionality. Isolate the drivers of value first. Then prioritize process development, automation and information sharing efforts.
Enjoy curated articles directly to your inbox.