Shared Technology Resources Hold the Key to Supply Chain Optimization
Q: How can value chain partners cooperate to create and share efficiencies?
A: While it is understandable for each supply chain partner to maintain its own information technology, many companies rely on more than one IT system—along with spreadsheets and email—to manage supply chain operations. To further complicate matters, every transaction in the complex global supply chain may involve a buyer; seller; carrier; and various forwarders, warehouse operators, and compliance/Customs brokers on both the origin and destination side.
With so many parties involved, exchanging so much information among them, it is hard to comprehend why some companies add complexity by using multiple service providers, just to save a nominal amount on logistics costs—often at the expense of supply chain coherence and visibility.
Without a global control tower to manage this complex workflow and dataflow across partners, chaos rules. Supply chain managers must determine the best trade-off in their supply chain based on specific organizational needs.
Here are some approaches that can help improve supply chain operations:
- Implement integrated logistics execution by linking order management to warehouse and freight management (both international and domestic), as well as compliance, either across systems or through one system.
- Operations and IT groups within organizations need to collaborate better to define a partner-inclusive supply chain vision. IT has to be the enabler, leveraging the power of Internet tools rather than relying on existing legacy technologies.
- Establish an enhanced data model across multiple supply chain partners. This goes back to the idea of a global control tower with a data model far beyond the boundaries of your business. Data can be used to control the events and workflow proactively, and with today’s technology can be dispensed across companies, countries, locations, and more importantly across platforms—such as mobile, tablets, and notebooks—while still respecting the concern for data security across partners.
- Limit the number of trading partners in your supply chain to enable easier collaboration and drive out hidden costs whenever a handover occurs.
- Because multiple IT systems across partners is the norm, not having real standards of communication across various parties and their IT systems in the supply chain is a large problem. Investing in a reliable and cost-effective integration tool that supports translation and multiple communication standards such as EDI, XML, and Web Services is important.