Where Software for Improving Supply Chain Visibility Often Fails

Key areas where software utilities fail to improve visibility of your supply chain

by Rod Dunne on February 10, 2011

in Biz Dev, Innovation

Supply chain visibility used to be so simple when companies were a lot smaller and less distributed. The truth however is that the global markets are changing and outsourcing and international partnerships are more prevalent. In this article I’ll show where the legacy software has failed to catch up and the prospects are for the future software trends.

Current state of play with supply chain visibility software

Supply chain visibility helps you gain an awareness of data relating to the supply-side factors affecting your first production as well as the demand-side elements (i.e. sales). Current software solutions such as SCM or ERP were developed with low complexity solutions in mind.

In particular, these solutions are ideal for those situations where the supply and demand sides are to a great extent within the four walls of the company itself. In these situations the company can easily identify supply issues or trends in sales on the demand-side and your innovation strategy can easily incorporate new concepts from suppliers.

The new silver bullet?

But due to globalization, lean/reduced waste/JIT supply chain visibility of what your numerous suppliers/sales channels are doing is no longer there. You just cannot see what production issues they are having and how this will have a knock on effect for your own production.

Likewise, with so many different sales channels and outlets it is near impossible to get visibility into point-of-sale data unless you actually belong to an umbrella company which shares information from point-of-sale back to producers.

There are new products coming out that intend to bridge this gap but they are still in their infancy. Importantly, no set standards have been agreed upon just yet so there is still the potential that a supplier/sales outfit may end up using a different solution breaking the visibility in your chain.

So what is the solution?

Well, for the time being, you could go with some of the new supply chain visibility software solutions out there. But they are expensive. And you’ll have to justify the cost of this to your management, especially in relation to production tool supply requirements you may foresee needing.

In truth, the best solution is to take a step back and establish what elements of your production are being affected by these visibility issues. Identify if there are alternate communication channels that be opened up which are suppliers in order to provide greater feedback as regards productivity issues, quality levels etc. Similarly, collaborate with your demand-side sales channels to gain details of order fill rates, forecasting projections and upstream planning.

Author Rod Dunne...

Blog owner and sole writer Rod DunneI am the owner and sole writer on Product-ivity.com. This is my personal blog detailing troubleshooting tips for small businesses. Posts are based upon 2 decades in consultancy & innovation management within startups/maturing companies.

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