Why a Supply Chain Management Ecosystem Is the Future of Enterprise Planning
Visibility providers are integrating with supply chain applications to give users multiple capabilities within a single ecosystem. Just like within our smartphone, these integrations are giving users the power to tailor their own ecosystem according to their needs.
Do you have a smartphone? If so, you are already working within an ecosystem of software apps that communicate with each other, share data, and allow you to choose features that work best in helping you achieve a goal.
As a runner, for example, I have a variety of apps I use for things like checking my heartbeat, managing my diet, and timing my runs. While each of these datasets is helpful, they become more powerful when taken together to create a bigger picture — which is increasingly easier as app creators recognize the opportunity to integrate with others.
This kind of robust app ecosystem works because it is intuitive to my behaviors and I derive value from the holistic view of my performance and health.
The same dynamic is beginning to emerge in the world of enterprise software where visibility providers are integrating with supply chain applications to give users multiple capabilities within a single ecosystem. Just like within our smartphone, these integrations are giving users the power to tailor their own ecosystem according to their needs.
A Supply Chain Management Ecosystem Emerges
This emerging model, referred to as a supply chain management ecosystem, leverages capabilities across multiple platforms and providers. Instead of having a single company creating one comprehensive platform, this new model optimizes a company’s entire sourcing, manufacturing, and distribution operation through the cooperation of providers that can talk with one another.
That conversation, ongoing and in real-time, helps users plan for and avoid disruptions while using a fuller view of supply chain data to identify anomalies that could negatively influence cost, service, and speed.
A supply chain management ecosystem is ultimately about risk management and resilience. Users can select from the applications that give them the best solution for any scenario. For example, when an organization is saving costs downstream, they may not realize it is costing them upstream. A holistic ecosystem removes that uneven dynamic and by integrating every relevant dataset – analyzed by machine learning and artificial intelligence – to present a more universal approach to enterprise planning that reflects the nuances of the entire supply chain network.
The key, of course, is visibility. A fundamental flaw in traditional transport visibility is that it doesn’t apply to the entire supply chain of the organization. A supply chain management ecosystem will allow you to get visibility into your entire network, which then allows you to feed that data into other systems that can help automate or enhance management of the overall supply chain and resource planning process.
The use case scenarios of a supply chain management ecosystem include:
- The ecosystem may send a user a real-time update that tells them a container will be late at the port for up to five days. That update then can talk to the user’s TMS to reroute the remaining legs of that container’s journey so that it can get to a port in fewer than five days. Or the update can be used to calculate the downstream impact of the delay to help the organization make a more informed decision that will mitigate potential losses.
- Integrating visibility data with a procurement platform can help a manufacturer identify the need for and then connect with an alternate supplier in a seamless, automated manner.
- Improved data sharing among the different applications will naturally lead to stronger analytics. For example, organizations can leverage historic visibility data and integrate it into a risk management platform or broader business intelligence.
Building Resilience and Driving Innovation
What a supply chain management ecosystem will ultimately do is give an organization resilience against disruptions. Real-time visibility serves as the connective tissue in such an ecosystem — feeding visibility data to transportation, warehouse, yard and order management systems, business intelligence and, ultimately, next-generation enterprise resource planning (ERP).
As Steve Banker, supply chain analyst at ARC Advisory Group, writes, “(Tata Consultancy Services) believes that once broader network visibility is available, companies can think of planning in a new way. Traditional enterprise resource planning and supply chain planning applications plan from the inside out. In other words, based on the data in their internal systems and rather limited collaboration, they optimize their internal operations. But something called ERP 4.0 will lead to ecosystem planning and optimization application suites.”
That openness and interoperability is the future. In driving cooperation among different providers, the hardware-agnostic and multi-modal approach affirms the idea that competitive advantage comes from collaboration. This approach creates the potential of a networked community that includes suppliers, customers, trading partners, and others along the value chain that in working together can help drive innovation and solve unexpected market challenges.
In viewing the supply chain as a single entity, not a chain of siloed components, forward-thinking organizations can access the highest potential of their data.