3 Signs of a Siloed Supply Chain—and How to Fix Them

Tags: Technology , Supply Chain, Visibility

Nick Foy is Chief Strategy Officer, ModusLink

To keep up with the speed of mobile commerce and the impatience of consumers, supply chains must be faster and more agile than ever. Today's consumers expect items to be delivered to them quickly and seamlessly no matter how, when, or where they made the purchase. Siloed supply chains can slow down the process, causing frustrated customers to take their business elsewhere, resulting in lost revenue, resources, and time.

But how do you know if you're stuck in a siloed system? Here are a few warning signs to watch for:

Warning #1: You’re operating on a geo-specific basis

In today’s global economy, businesses must operate without boundaries. Sadly, many companies are laser-focused on specific geographies when considering their supply chain needs and vendors. But just as your business must operate globally, so too should your supply chain. Instead of assessing country- or region-specific needs, adopt a “think global, act local” strategy.

Consider how your entire supply chain, across the entire business, would work if you were able to take a 10,000-foot view to cut costs, streamline processes, and leverage scale, while still being able to implement and execute at a local level that takes into account factors such as labor markets, language, cultural norms, and more.

Warning #2: You use multiple vendors for different parts of the supply chain

So much goes into a supply chain that it can be dizzying to think of it all. From planning, procurement, and manufacturing to distribution, delivery, support, and returns, supply chains are longer than ever. Now think about how many separate vendors you use throughout this process? Three? Five? Maybe more?

Having many different solutions to solve one problem is practically the definition of a siloed environment. It's the equivalent of taking five different buses to work instead of one car. Some of the buses will inevitably be late, meaning you’ll miss your connections and your schedule will have to change—which, in the real world, means you're not making deliveries on time and your customers are left unhappy. Instead of looking for vendors who do one thing, look at those that take the car approach, an end-to-end solution that can manage the supply chain process from the planning stages all the way through to returns.

Warning #3: There is no line of sight

So you have different people managing different parts of the supply chain, but who is overseeing the entire process? If you don't know the answer to this question, you have a line of sight problem.

To continue with the methods of travel analogy, having no oversight into the entire operation is equivalent to sending out a crew of buses without a central dispatch: People are going to get lost and some will end up crashing into each other. All aspects of the supply chain need to be moving towards a single goal; they need to be on the same page, running as one cohesive machine.

Take warehouses for example. Warehouses have become a key problem area in the supply chain process simply because there aren't enough workers to keep up with the demand for products, especially with the boom from increased online shopping sales. But if other parts of the supply chain, say procurement and manufacturing, don't know that the warehouses are treading water, they will keep moving along at normal speeds, not realizing that the supply chain is grinding to a halt at the warehouses.

Fully integrated, end-to-end supply chain management solutions can provide that line of sight so many companies are desperately, and painstakingly, missing.

As voice-activated home assistants (like the Amazon Echo or Apple HomePod) continue to gain popularity, consumers will have easier options for shopping than ever before, putting more pressure on supply chains than they've experienced to-date. In order to keep up with demand and keep customers happy (and loyal), organizations must take a holistic look at their supply chains to ensure that they are operating globally, seamlessly, and transparently, or else they risk losing out.






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