The container ship Ever Given running aground in the Suez Canal highlighted how dependent the world is on a smooth-running supply chain. However, when it comes to people, processes or technology, which is more important to achieve supply chain management success?
By Kobus Visagie, executive: business solutions at Tracker South Africa
There is no single answer. Without the correct enabling tools and organisational processes, even the best people in the world will come up short. A balance needs to be achieved among these three core elements. Even though technology can increase supply chain visibility, it is not a “silver bullet”. The right solution can only be leveraged efficiently with the proper organisational and process changes.
Other dynamics that come into play to facilitate the use of supply chain technology include sound processes, good data, appropriate supply chain design and strong relationships up and down the supply chain. Technology enhances all of these building blocks and these building blocks enable the technology to fulfil its promise.
The real-time information systems of today collect and communicate information almost instantaneously. The only predicament is that these systems can create islands of information. However, emerging real-time information systems provide unique insights:
* Data collection tools, such as vehicle telematics and scenario planning tools, support real-time visibility.
* Communications infrastructure spans facilities and trading partners. Sharing information is achieved through demand and forecasting tools.
* Planning, execution and management software solutions, such as extended ERP, support the decision-making process based on newly available information.
* The key is to use the Internet to bind these tools together, providing pervasive access to real-time information. The ability to tie these technologies and systems together through the Internet, provides visibility and continuous connectivity to everyone in the extended supply chain.
Organisations should review their supply chain management initiatives to ensure they support their specific business models and processes with reference to the workflow, data and integration of technology, and the ability to share data, connect data and make decisions. Technology solutions should connect to all core suppliers enabling them to see the forecast, demand and replenishment requirements.
The concept of “on-demand” technology is not new, but fast becoming an accelerator for the effectiveness of ICT departments in leading companies. It enables organisations to respond dynamically to whatever business challenges might arise, providing products and services on-demand, in real-time. Businesses can also adapt their cost structures and business processes to reduce risk and drive business performance, as well as optimise their ICT infrastructures to cut costs and boost productivity.
On-demand ICT involves paying only for the ICT resources used on a “pay-per-use” basis, such as with utilities like electricity and water, rather than committing to fixed costs in the form of hardware purchases and leases, software licences, and IT employees.
Inflexible bases of ICT assets do not burden companies; they may become far more responsive, more inquisitive and more innovative in their ability to sense and respond rapidly to changes in the marketplace. However, with a pay-as-you-go approach to ICT assets, businesses are free to focus more effectively on their differentiating competencies and to use tightly integrated strategic partners to manage tasks ranging from manufacturing and logistics to HR and financial operations.
On-demand ICT also enables organisations to drive down variability relative to cost structures, to reduce risk and increase levels of productivity and profitability. Plus, it makes companies more resilient because its flexible operating environment may manage changes and threats with consistent availability, security and privacy. The benefits of the on-demand concept are by no means limited to the four walls of any one company.
The new dynamic on-demand supply chain model is based on the collaboration with channel partners, the ability to share information through various customer interfaces in order to allow the speed of transactions, information or knowledge to accelerate, and the ability to react on this within a timely fashion to meet the customer’s needs. Solutions between companies are transparent to allow database information sharing across various platforms between various customers.