Supply chain management (SCM) 2.0 is a broad term that was derived from the introduction and ongoing adoption of Web 2.0 information technology, where web-based technology and business networks play a far more important role in communicating and integrating information. The term was first cited in 2008 by i2 Technologies as the next wave of supply chain business process and technology innovation.
In a nutshell, SCM 2.0 is meant to build upon existing supply chain capability, but with more emphasis on unique process differentiation. The reason for this emphasis is because many supply chains are extended across global regions involving multiple supply, demand or trading partner networks, which has magnified the need for timely dissemination, integration and/or visibility of all forms of information.
In the past, lean manufacturing techniques are in stark contrast to today's rapid speed of business change. This has uncovered needs for far more agile, on-the-fly responses to changes in the state of demand or supply. Previous standardized supply chain packaged software applications were designed to support more sequential demand fulfillment business processes, and making changes to process required costly software changes and modifications.
The next generation of SCM 2.0 addresses the needs for more process agility and broader dissemination of real-time information within global networks with a set of tools directed at knowledge management among cross-functional communities, the sharing and mining of all forms of information, and broader supply chain visibility.
Components anchored in business process management (BPM), electronic workflow and managed software services make it easier to modify or change processes on the fly. Users can literally select from a library of business process workflows, customize to unique needs, and implement within existing IT systems and applications infrastructure.
Here are five tips help you get the most out of SCM 2.0:
Keep a grounded perspective. The potential benefits of SCM 2.0 for business competitive differentiation and agility are enormous, but these technologies are still evolving in terms of overall adoption. Recognize this early adopter phase not only for what it is, but what it will become. There are some companies today who are enjoying the benefits of SCM 2.0 process capability, but first took the time and effort to understand applicability to the business.
Establish a direction and seek capabilities. Technology vendors provide different meanings and connotations to the term SCM 2.0. Identify your business and supporting supply chain process needs first, in the context of required capability and differentiation. Insure that supply chain technology vendors or service providers respond to your specific requirements in the context of your vision and process deployment needs. Your context should include a mapping of key process capability needs and buying or contracting for long-term capability in systems enablement.
Do your homework. Many of the components to SCM 2.0 are built around today's more advanced service-oriented architecture (SOA) software technology or Web services platforms. Many of the major ERP players are making transition to these platforms, but there are implications for upgrade. Specialty or so-called best-of-breed vendors may already provide SOA platform technology, or may have extensions to older applications. Certain supply chain processes can be more quickly enabled with SCM 2.0 technology when acquired via a hosted or Software as a Service (SaaS) deployment, where users utilize a SCM 2.0 platform provided and maintained by that vendor. Seek out early adopter organizations or systems integrators who have demonstrated experience in implementing components of SCM 2.0. Nurture a two-way sharing of best practice knowledge and learning.
Across the board training. Leveraging SCM 2.0 implies a different set of skills. Application users will need to be more grounded and trained in the use of BPM and automated workflow applications. Supply chain cross-functional teams will need to be intimate with Web 2.0 concepts of information, best practice or knowledge sharing. IT support groups need to be up-to-speed with newer application-to-application and information integration architectures such as SAP's Netweaver, Oracle Fusion Middleware, or Microsoft .NET integration components.
- Manage scope. As with any other broad change, insure that the overall journey to SCM 2.0 capability is implemented by carefully managing the scope of the project. Have a long-term direction and define the journey in manageable steps that supply chain teams can absorb and control.
About the author: Bob Ferrari is the Managing Director of the Ferrari Consulting and Research Group LLC, a supply chain business process and technology consultant firm, and is the creator and Executive Editor of the Supply Chain Matters internet blog.
This was first published in December 2009