Kinaxis thought leadership VP Trevor Miles posted a recent Expert Community blog commentary, Dynamic supply chain alignment: A theory ready for practical application sharing highlights of a recent Global Supply Chain Business Summit hosted by noted supply chain management practices author John Gattorna.
In his commentary, Trevor highlights Gottorna’s thinking on the need to both segment your business market and supply structures, and then design the appropriate supply chain to meet the business objectives of that business segment. While Trevor touched upon the organizational and business process impacts of this concept, I was triggered to the information systems impacts.
Too often today, businesses try to force fit the supply chain to meet all ranges of business needs. Hence the term “more agile supply chain” tends to be all encompassing. Hewlett Packard was one of the first companies to embrace the need for segmented supply chains only to lose some of that focus in subsequent business unit and management restructurings, not to mention an enterprise software upgrade. Kraft Foods has made a decision to split into two separate companies, one focused on its traditional food business and one focused on snacks and convenience foods. In planning for the split, two separate supply chain organizations were created, hopefully with different expected business support outcomes.
For the vast majority of larger companies however, are supply chain teams trying to make existing enterprise software applications support multiple supply chains, each with different fulfillment criteria. In some cases, teams have been able to come-up with tailored solutions, but not without a lot of hard work and innovative thinking. This is especially the case in supply chains that require high service response to customers. In other situations, teams had no choice but to seek out different technology more appropriate or more customized to support the needs of the specific supply chain model. Smaller firms may have more flexible options and less scope, but the same principles apply.
It seems to me that the IT perspective that the resident enterprise software, developed on business process principles of the past, can support 60 or 80 percent of today’s needed segmented solution does not make the mark to today’s far different B2B networks environment. The need to plan across the entire supply and multi-channel demand fulfillment network for a segmented business requires a different set of business and decision-support capabilities. Does it not make sense that teams elect technology that can support most all of the segment’s needs from the get-go?
Several years ago, such an argument would be heresy because of the excessive time and high cost of initially implementing, updating and supporting enterprise software. Today, with the advent of cloud computing and SaaS/service options within the supply chain management software landscape, the option has become far more attractive, and perhaps less expensive over the long-term.