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Effective supply chain management is all about visibility |
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By Michael Dortch
25 Mar 2009 | SearchManufacturingERP.com
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An organization's supply chain is crucial to that company's success. In fact, you could argue that the supply chain is a crucible for IT and information best practices.
In my decades as an IT industry advisor and observer, every time I've seen three basic tasks successfully completed, the relevant IT initiatives have succeeded. And every time I've seen any one of these tasks ignored or inadequately addressed, the relevant IT initiatives have failed. These three tasks are:
- Identify and prioritize key business goals and needs, and their primary stakeholders and decision influencers.
- Select the mix of provider solutions and resources that aligns most closely with specific business needs and goals and stakeholder concerns.
- Ensure that incumbent contracts, agreements and practices sufficiently protect the business against technological and market turbulence.
In my experience, I've seen few areas of any enterprise more easily cast as a proving ground for such statements and practices as the supply chain. The direct, almost visceral connection linking technology choices and management practices to business goals and needs is crystal-clear. If any part of the supply chain breaks, cessation of all business activity can be mere minutes – or even seconds -- away, while restoration of operations to pre-disruption levels could take hours or days.
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If any part of the supply chain breaks, cessation of all business activity can be mere minutes – or even seconds -- away.
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So the supply chain is as critical to business success as the two elements that arguably make up every business: information and process. This means that at many enterprises, the supply chain is the place where abstractions about best practices for managing business technologies and information become cold, hard realities, not to mention opportunities to make what we analysts sometimes call "career-limiting decisions."
And at least in part because of its business criticality, the supply chain is where technological innovations for evaluation and adoption often first surface. Witness how new iterations of radio frequency identification (RFID) or real-time location system (RTLS) technologies and solutions are so often intended primarily or exclusively for supply chain functions and their managers. . .not to mention enhancements to ERP solutions.
Effective supply chain management, according to many successful users and vendors, is all about visibility. If it's true that "you can't manage what you can't measure," it's also true that "you can't measure or manage what you can't see." And being able to see and act upon information about what's happening in the supply chain – preferably as or before it happens – is critical to supply chain management success.
But supply chain visibility isn't just about visibility of all business-critical elements of the supply chain to its managers. It's also about visibility of what those managing the supply chain know about aligning IT and information resources with business goals and needs to enterprise decision-makers. That could be the most sustained business value that effective supply chain management generates at some enterprises, extending far beyond specific improvements in supply chain efficiency and responsiveness.
About the author: Michael E. Dortch is the principal analyst and managing editor of DortchOnIT.com, "an independent voice for technology-dependent people." He has been an IT industry analyst focused on translating technologies into business value for more than three decades. He can be reached at www.DortchOnIT.com or at medortch@dortchonit.com.
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