Supply chain execution convergence is a topic that has been gaining in popularity. The need for end-to-end visibility and solutions that proactively enable planning and the ability to react to the unavoidable disruptions is paramount. It’s time for organizations to take a step back and evaluate their overall supply chain approach and to consider how supply chain execution convergence can bring their supply chain to the next level.
Rethinking the Traditional Supply Chain
In 2009, the term supply chain execution convergence emerged as a way to describe the next generation of supply chains. The idea is to bring together the individual silos within a business, from the front end to the back end, from warehousing, manufacturing, logistics, purchasing, etc. to manage the end-to-end supply chain. Wouldn’t it be great to break down the silos between those parts of the organization, and start to get the systems, processes, and people working together?
More than just a buzzword, supply chain execution convergence allows for better collaboration and optimization between each team and silos in the enterprise. Rather than optimizing individual operations – transportation, warehousing, and others independently – it optimizes the entire flow to get the most benefit.
In recent years, it has been noted that that progress has been made and there has been some adoption of this concept, but that many organizations have not been able to break down the internal silos for true end-to-end convergence. The functional domains of the business are still focused, and often targeted, on optimizing their own departments, rather than looking at the entire organization. But, we are getting closer to the vision.
Many businesses have grown from acquisition, with various technologies and systems purchased along the way. These technologies which worked well for each of their own areas, but may not work for the overall business. Within each of the functional domains, there are business processes optimized for each, but are we achieving what’s best for the organization as a whole or are we achieving what’s best for just that part of the business?
Redesigning: 2 Factors Driving the Need for Convergence
Visibility and collaboration. It’s that simple. Or is it? If the functional domains have optimized their own internal business processes for better visibility, then getting to the next level of organizational visibility should be the natural next step. The problem is that each of these functional areas has gone about this process utilizing their own systems and technology and what works there might not be the best solution for the overall business.
As an organization, the goal is to get systems aligned to enable end-to-end visibility and to facilitate cross functional collaboration. It may or may not be necessary to acquire new systems. It’s important to have a systems “strategy” that says these are the systems we are going to use and the ones we are going to integrate for information flow. Then wrap that up into an overall business process that links each of the individual components of the business and look to optimize those business processes to benefit the whole business rather than the individual silos that form the end-to-end supply chain network.
In order to have true visibility and collaboration, organizations must tackle both internal and external convergence. Internal convergence can be the most difficult but should be tackled first, as you need to have your own internal business units and processes aligned before bringing on your external supplier and logistics networks.
The problem starts to get bigger and more complex once you go outside our own business. If you look across your supplier and logistics networks, there are tens, hundreds or thousands of partners that you work with. In that network, there a few very large partners, some medium partners and potentially many smaller suppliers. Cloud technologies can help break down the barriers for the small to medium supply chain partners, enabling them to afford systems and connectivity that will ultimately increase visibility and collaboration.
Visibility is more than the ability to “see where my stuff is” and has even moved beyond exception-based management. Organizations want to get to a more sophisticated level of visibility that truly enables them to proactively respond to the inevitable disruptions in their supply chain. More than ever, they want a control tower solution that oversees their entire set of processes, from PO to delivery. Agility is key in today’s organizations.
Re-Evaluating: Technology that Worked Yesterday Might Not Work Today
Begin by taking stock of where you are as an enterprise today and bring people together to start thinking about a converged platform. Then map out the processes, from start to finish, making sure you have the right systems and technology you need, before getting people aligned and moving forward with connecting the processes and systems. Once that is solidly in place, you can move that forward to connect with like-minded business partners.
Businesses still have many options, from a “one-system fits all” to a “best-of-breed” approach – and there are benefits to both. In my opinion, a best-of-breed approach can optimize the best technological features and enable the combined solution to provide the individual functional domains their specific applications while providing the larger organization the visibility, collaboration and agility it so vitally needs.
Evan Puzey is Chief Marketing Officer at Kewill. With nearly 20 years experience in the supply chain industry, Evan has assisted enterprises and logistics service providers in more than 30 countries, across 5 continents, with their supply chain initiatives. Originally a demand forecaster and planner for Castrol in the Asia Pacific region, Evan moved to a solution implementation role with Mercia (Supply Chain Planning) and then progressed to sales, pre-sales, marketing and global product management roles with Mercia and then Finmatica (Supply Chain Management). Evan has been with Kewill since 2004 in senior Marketing and Product Management roles, most recently as Chief Operating Officer for Kewill Asia Pacific.