Evolving supply chains and technology

[authorBox image=”http://uzuner-solutions.de/wp-content/uploads/2013/12/2013-11-29-John-Bakker.jpg” name=”John Bakker”]Our guest author thoroughly explores new challenges for software in the realm of supply chain. John Bakker is an executive consultant, project manager, and expert for supply chain management, who often optimizes business processes with software.[/authorBox]

Today’s challenges in managing supply chains

No doubt the supply chain challenges of today are larger than 10 years ago. Supply chain networks have become more complex to manage, and the required speed of decision making has changed from weeks to hours due to, among others, following reasons:

  • growing demand in emerging markets
  • volatile developed markets
  • rising production costs in off shore countries
  • increased cost pressure due to the economic crisis

In order to keep up with competitors, the producers of consumer goods, for example, launch one innovation after the other, including promotional SKUs (Stock Keeping Units) and temporary price reductions. These phenomena leave the supply chain with a demand which is hard to predict. Also the production facilities have to deal with new insecurities.

Where software comes into play

Supply chain organizations therefore often appeal to other departments with a cry for help, including the poor fellows from IT. This is, among others, what they often need and ask for: more and accurate data (yesterday), simulation capabilities, an analysis of the differences between financial consolidation systems and ERP supply chain systems, etc. etc.

They blame ERP applications for not being responsive enough, for not providing information at the right time, location and in the right context.

And the thing is….usually they are right!

New technologies as the answer?

Now on the IT side, the investments in infrastructure and ERP systems to operate massive processes has almost come to a standstill. On the other hand, the market is overcrowded with software companies introducing and marketing new technologies, offering solutions like this: In-memory data processing, Cloud computing, Software as a Service, Mobile and Social Technology. Those companies often stress that massive IT programs or investments are not necessary, but recommend using their new fast, out of the box implementation methodologies.

However, it is primarily theory that preaches the salvation. These new technologies are lacking practical use cases on how to really improve supply chain efficiency, if one considers that the core database still is the ERP system and that these new technologies need to integrate.

There are many questions left

Hence a lot of questions remain unanswered and if those new methodologies really deliver, a good ROI (Return on Investment) is still very doubtful. It will certainly improve over time, like with ERP, when more organizations are willing to take the risk to adopt the technology and help improve it for their purposes.

But till now I still wonder:

  • What can the improved technology to do massive data processing (in-memory) contribute to a more efficient supply chain if not all required data is available ?
  • How can supply chain organizations use the data that comes available through social media?
  • Is the size of data relevant to change supply chain networks?
  • What sense does simulation make if the simulation can’t be representative?
  • How can cloud and SaaS based solutions improve decision making time?
  • Where are the real practical use cases without the marketing buzz?

In short: What is the earth shaking new technology out there that can really contribute to better supply chains of today?

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