July 2016 | Commentary | IT Matters

Supply Chain Execs Shift Focus From Sustenance to Survival

Tags: Supply Chain Management, Logistics, Technology , Supply Chain

John Bermudez is Vice President of Product Development, Infor, 800-260-2640

While we usually reserve 1990's nostalgia for fashion, film, and music, a glimpse back at the technology landscape is just as jarring. Many remember a time before the internet was a necessity, but what about the pre-SCM age?

For today's large manufacturers, distributors, and retailers, supply chain management (SCM) has become such an indispensable area of business management that it's difficult to imagine a time before it. Yet decades before mobility and the Internet of Things, there were no "supply chain directors"—only warehouse, transportation, and manufacturing managers, each group siloed from the others in intent and operation.

Even if a forward-thinking executive realized the need for a holistic strategy, few systems could support that goal. The visibility we now take for granted was once crudely cobbled together from faxes, spreadsheets, and phone calls.

The move away from "point-to-point" thinking happened around 1996, when companies began building teams that pooled collective knowledge and expertise around everything affecting the supply chain. These newly aligned groups drove major improvements in planning and connectivity, particularly among suppliers, customers, and nascent ERP systems.

Twenty years later, supply chain managers and executives have clearly defined responsibilities that span the flow of goods, the various systems that support it, and the human capital that keeps it all running—far beyond the brick-and-mortar mindset of the 1990s.

Omni-channel a Necessity

In 2016, the SCM community stands at the precipice of another important shift. The digital transformation of the supply chain that industry analysts were buzzing about is here, with omni-channel capabilities emerging as a necessity for all competitive supply chains.

More customers than ever order from smartphones and expect a choice of delivery options, while enjoying the best prices and unprecedented speed and customization. If a competitor has a more convenient avenue for a customer, you'll suffer in the marketplace. Who would have thought that mobile apps such as Uber and Lyft would be able to so rapidly disrupt a service delivery system that was so taken for granted?

This incredibly competitive landscape is the reason supply chain executives must shift focus from thought leadership and being a best-in-class company to survival. In 2016, retailers are thriving or dying by their supply chain strategies.

Walmart remains the world's largest retailer due to its supercenters, hundreds of thousands of SKUs, and valuable information it makes available to suppliers, including Sony, Unilever, and Procter & Gamble. This flow of information allows every company in the network to adapt quickly to the market.

Connectivity to your entire network is no longer an option; it's a necessity. If they haven't already, supply chain executives need to immediately deploy more flexible and agile supply chain management solutions that encompass ERP.

One way to achieve this flexibility is to utilize a cloud-based supply chain network. This approach enables trading partners to collaborate around "one version of the truth" in real time. It also allows you to not only rapidly expand or contract services according to your market, it also lets your team focus on new business instead of maintenance.

Let's be honest: How much time do you have before all the top suppliers and customers are connected in a way you should be?