Supply Chain Collaboration and Visibility

TECHNOLOGY SOLUTIONS OR PROCESS TRANSFORMATION?

  Compiled by Lothair, Written by Norbridge
SUPPLY CHAIN CACOPHONY
THE FUNDAMENTALS - INCREASE VISIBILITY AND COLLABORATE
ON THE RECORD WITH SUPPLY CHAIN’S LEADERS
HAVE WE ATTAINED
ANY BENEFITS?
TECHNOLOGY
SOLUTIONS OR PROCESS TRANSFORMATION?
WHERE DO WE GO FROM HERE?
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BLACKWELL, Florida East Coast Industries: (Mr. Blackwell recently served as Group Director – Transportation & Logistics of a major forest products company.) Technology is not the answer, but it certainly is an enabler. We had over 500 locations, and we didn’t have visibility throughout the supply chain.

We used a variety of ERP (enterprise resource planning) solutions. In one case we spent tens of millions trying to put an ERP into effect and then abandoned it because our enterprise was so complex.

REGAN, Tranzact Technologies: I think we’re doing a disservice to the readers if we don’t point out that, often, companies tend to keep the systems rather than deal with the illness. I personally believe that a lot of CEOs find it is easier to write a check for a major systems implementation than to deal with the reality that their business model might be flawed.

SHEPARD, Ryder: I’m a technology guy, and I often hear: “Give me ten pounds of technology and make it all go away.” And we always say, no, you can’t do that.

In a recent case, we spent almost a year looking at all of a customer’s logistics business practices. And only then – when we had completed the gap analysis, agreed on what the process was (and is) and should be, and obtained the client sign off – did we bring in the IT people to start the functional design. It’s a good example of a strong collaboration between our client, Applied Materials, our technology partners, SeeBeyond and Manhattan.

MATTHEWS, Optum: One of our customers was able to remove $180 million in inventory costs in the first year. That’s a significant number – and the kind of return you don’t get from just seeing what’s out there in your supply chain. It’s a very interesting story. They didn’t start with specific goals and aspirations for the project, but they knew they were hemorrhaging. They just knew they needed to make the supply chain more efficient. Achieving visibility was simply the first hurdle, because it revealed what wasn’t working. The real ROI came from the cross-enterprise business processes that were applied and enforced by our software.

Looking at these huge savings with our client, we were able to attribute 25 percent of the savings to the product. But the bulk of that $180 million in savings is a result of business process change they initiated.

MOREHOUSE, A.T. Kearney: Well, actually, I did have a word for this, and that is that every company’s strategy is unique. Software doesn’t solve the problem. Also, I think we’ve completely missed a major point. We’re sitting here like a bunch of operations people thinking we’ve got to respond to whatever the marketing folks decide they want to do to promote products, issue new products, or cut off products, or whatever it happens to be. And the fact of the matter is we shouldn’t be sitting here just responding. We should be looking at this holistically, including the marketing and the new product development and the whole process. Instead of sitting here saying, “How can I run new technology or do this a little better,” it’s important to first determine if we face a fundamentally flawed process.

GOLD, KPMG: Trading partners need to leverage technology to get connected first. Getting connected and determining how to communicate utilizing the right technology mediums and applications is a large task. The challenge today is more about the “how” to get connected rather than the “why.” After trading partners figure out the “how,” then they can begin to leverage the information they pass between them.

JOHNSON, SeeBeyond: First, like Ryder, you should focus on improving key processes that will drive value for you and your customers. Second, you must leverage proven technology to drive the desired value throughout the organization. Take the time to do it right.

ROBERS, Cap Gemini Ernst & Young: I hear a couple of common themes here. The first is that companies must use technology intelligently. The second is that companies must truly understand their business model. This is where Cap Gemini Ernst & Young is helping companies like Ford to implement their business strategy around service parts using a more customer-centric service model.

POLIS, Dotcom Distribution: What a CEO can do first of all is commit the company to embrace technology. But just as importantly he has to commit to change in his company. Unless a CEO commits to change in the company, any efforts will fail. It’s that simple.

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