Step-by-step savings

I have received feedback from some readers who take issue with my recent column about supply chain enhancements, and the idea that improvements, rolled out judiciously over time, would promote supply chain savings.

I have received feedback from some readers who take issue with my recent column about supply chain enhancements, and the idea that improvements, rolled out judiciously over time, would promote supply chain savings.

The hitch for most stemmed from my contrary argument that supply chain benefits are realised only after sufficient, well-aligned modifications have been implemented, and that so-called random infusions of technology would merely leave the enterprise in greater disarray.

To clear up any confusion, my proposal did not call for a haphazard, piecemeal approach to advancing the supply chain. Rather, I suggested implementing a long-term, forward-thinking approach that would set incremental goals and the metrics for measuring success, to fully account for the pervasiveness of integration within the walls of both the enterprise and its suppliers.

Will a step-by-step approach realise optimal benefits on day one? Of course not.

In truth, most companies attempting to augment the supply chain will find it to be one of the more complex undertakings they will have faced. Supply chain not only involves logistical integration but also physical operations, cultural acceptance and established collaborative cooperation.

Any hopes that you will be able to drop the latest supply chain software into the mix and watch the savings roll in overnight are setting you up for failure.

Supply chain improvements require a tiered approach that must begin only after first ensuring the visibility and efficiency of internal business processes. Supply chain augmentation often follows as a natural next-step after ERP is implemented.

Projects are plagued by issues of data integrity, cross-supplier incompatibility and, most notoriously, human error. Beyond the corporate walls, each supplier infrastructure must be assessed for its ability to handle the impact of efficiency on production. Will each supplier be able to keep pace, or will it become a weak link?

With many chief executives finding themselves on a shorter leash these days, investment returns have become the priority. The savings brought about by supply chain efficiency can be significant, but achieving maximum benefit will take more than moving your EDI (electronic data interchange) channels to the internet.

Although the task is a complex one, approaching the project in stages can help one avoid most of the pitfalls. And rather than sit on the sidelines, I’d prefer to see you begin taking a tactical approach to addressing the logistical, cultural, and collaborative issues that form a supply chain initiative.

So start implementing the pieces and get the job done right.

Borck is managing analyst in the InfoWorld Test Centre. Send email to James Borck.

Join the newsletter!

Error: Please check your email address.

Tags Supply Chain

Show Comments

Market Place

[]