IT in the Age of Supply Chain Complexity

“There is a certain limit to what you can optimize just within the four walls of your company,” said Artur Zgoda, Director of Supply Chain IT Solutions at AXIT- A Siemens Company, in a recent episode of Talking Logistics. “The next big opportunity for benefits is to go beyond your four walls and integrate and collaborate with your suppliers, customers, and other trading partners to enable joint supply chain processes.”

Cross-company collaboration is becoming critical for success as supply chain complexity increases due to e-commerce, global trade, increased regulations, and other factors. But although the potential benefits of cross-company collaboration are great, “it also raises the complexity level exponentially,” Zgoda added, “because you’re not only dealing with your own people and culture — and not just company culture, but country culture too — you’re also introducing your company to a completely different [way of working and thinking].”

What are some of the challenges or hurdles companies have to overcome to address this complexity?

“On the IT side, many companies have outdated systems that were developed in an era where internal optimization was the only focus,” said Zgoda. “So they are not well-suited for external collaboration. But there is also a big challenge on the process side too. Many companies still operate in a siloed way, with different divisions or departments within a company not really collaborating with each other.”

Speaking of IT, I asked Zgoda how he would complete the following statement: “IT in the age of supply chain complexity must…what?” In other words, what attributes or capabilities should companies look for? Check out the short clip below for his response:

In short, IT in the age of supply chain complexity must be highly flexible, easy to configure and learn, and empower users (supply chain professionals on the frontlines) to enable new processes or capabilities on their own without having to get IT or external consultants involved. “Many companies have IT systems that support only fragments of the end-to-end process they need to enable,” added Zgoda, “so there’s a lot of manual processing involved, using Excel spreadsheets and emails, to fill in the gaps. The only place where the entire process exists is in the operator’s head. The role of the new modern IT platform, therefore, is to fill in those gaps to truly enable the end-to-end process, and to flexibly adapt to new requirements, almost on the fly, which otherwise would be done manually.”

I encourage you to watch the rest of my conversation with Artur for additional insights and advice on this topic, including how supply chain professionals can get buy-in from their IT colleagues, upper management, and external partners to make the changes and investments necessary to enable cross-company collaboration. Then post a question or comment and keep the conversation going!