Global Supply Chain Management

Stephen DeAngelis

October 13, 2015

“Supply chains are a highly-complex, yet very necessary, ingredient to nearly any successful business venture,” asserts Keith Peterson, Ph.D. (@Halo_BI), President and Chief Executive Officer at Halo Business Intelligence, Inc. “An efficient supply chain requires detailed knowledge of the minute mechanics behind each step of a product’s journey, plus a big-picture understanding of how those mechanics effectively support the process as a whole — which is where supply chain management comes in.”[1] Achieving the kind of visibility discussed by Peterson (i.e., a spectrum of insight that covers everything from minute details to the big picture) requires a state-of-the-art capacity for dealing with big data. The reason executives need visibility is so they can make better business decisions. Christy Pettey (@cpettey) observes, “For many companies, creating a successful global supply chain is a formidable challenge. There is constant pressure on supply chain executives as they weigh profound decisions.”[2] In fact, Bain analysts, Michael C. Mankins and Lori Sherer (), insist decision making is one of the most important aspects of any business. “The best way to understand any company’s operations,” they write, “is to view them as a series of decisions.”[3]

 

We’ve all heard about “paralysis through analysis,” which occurs when an executive stalls making a decision because he or she is waiting for more information. It’s a natural reaction. “Nobody likes being wrong,” writes Jeff Boss (@JeffBoss9), an executive coach and former Navy SEAL. “When it comes to making a decision, it’s natural to want to be ‘right.’ After all, making the wrong statement or otherwise contributing in a wrongful way is about as fun as failing at a competitive sport (remember Martina Navratilova’s quote: ‘Whoever said, “It’s not whether you win or lose that counts,” probably lost.’).”[4] Fortunately, technologies like cognitive computing are maturing at a time when global supply chains are becoming so complex that traditional approaches to supply chain management no longer work. Cognitive computing systems, like the Enterra Enterprise Cognitive System™ — a revolutionary approach for coordinating data throughout an organization — are able to analyze the massive amounts of data necessary to provide good supply chain visibility. More than that, they can provide decision makers with actionable insights that help them overcome paralysis through analysis.

 

Peterson reports, “Several studies have found that, companies that embrace an efficient supply chain management system are more likely to see larger returns than companies with unorganized methods.” Cognitive computing systems can help bring order out of chaos and can even make routine decisions so that executives are free to concentrate on more important challenges. Peterson adds, “Analytics power the heart of any supply chain management solution — assisted by tools for facilitating collaboration and optimization in a workplace. Fundamentally, businesses should think of the network of processes, facilities, and people involved in the manufacture of a service or product as an unbreakable chain — rather than a group of interrelated separate tasks.”

 

The folks at Supply Chain Network believe there are seven activities that companies should focus on to improve their supply chain management. In an extreme act of alliteration, they call them “the seven S’s of SCM.” They are: Synergy, Standards, Semantic, Serialization, Synchronization, Sustainability, and Social.

Synergy — Synergy is an elusive thing. It is sometimes difficult to identify and even more challenging to capture, this is even more true when it comes to the search for synergy in complex global supply chains. Synergy means savings. … Think overlap, offset and many other forms available once multicompany data sharing and active collaboration commences.”

One of benefits of a good cognitive computing system is that it can ingest and integrate both structured and unstructured data and make sense of it. As a result, companies can operate from a single version of the truth which helps generate both synergy and corporate alignment.

Standards — When it comes to successfully implementing advanced supply chain management models, standards are like oxygen. They are a prerequisite for success without which no scalable multi-company solutions can be built or rolled out in any sustainable manner. Standards [are required] for product numbering and data sharing, identification, location numbering, communications, RFID and now emerging standards for semantic data formats.”

Standards certainly help with data integration. Unfortunately, in multi-tiered supply chains, few companies are going to find standards that reach into all tiers.

Semantic — Transparent and simplified data sharing is the key to unlocking the latent synergies that exist in all supply chains, due to the many forms of siloization, as well as the cultural issues that have often prevented access to the data needed to identify and begin the capture process.”

Cognitive computing systems really shine when it comes to mining gold from unstructured data. They all use natural language processing in one way or another. Enterra’s solutions generally involve the use of the world’s largest common sense ontology; which adds a semantic sophistication not found in all enterprise cognitive systems.

Serialization — Traceability, e-Pedigree, carbon tracking, RoHS/WEEE/REACH, consignment and item level RFID are all emerging reasons why serialization is rising in importance in supply chain management.”

With product recalls taking an increasing bite out of profits, companies are going to find that traceability is going to be a “must have” in the years ahead.

Synchronization — Synchronization is where the rubber meets the road in terms of bringing together all of these component methods and systems to deliver a future state end to end supply chain network. Supply Chain Synchronization is not as simple as it may sound, in fact there are at least eight different dimensions across which supply chains can be synchronized.”

With so many moving parts, it’s no longer possible for manual processes to keep track of what’s going on in real time. An enterprise cognitive system, based on the principle of management by exception, can help keep things synchronized and can alert decision makers whenever an intervention is required.

Sustainability — There are many unfamiliar with the direct correlation between supply chain performance and carbon footprint. In most cases a company’s supply chain represents 75% of the carbon footprint generated by the organization. … Those companies which recognize this and take preparatory actions will see direct competitive advantage in supply chain costs for perhaps one to two years before those not taking action can catch up.”

Sustainability, of course, is about more than a company’s carbon footprint. It’s about reducing waste and procuring resources in a way that is both good for the company and good for the world. Done correctly, sustainability activities are the result of good business decisions.

Social — Social is the most recent development in supply chains and in our opinion the one factor which will most differentiate the performance of both end user operations and IT products over the next several years. The application of social networking based technologies in the supply chain will be at a number of different levels including employee engagement, innovation, continuous improvement and a number of others in operations and supply chain planning/forecasting.”

I suspect that social dimension of supply chain management will be tied closely to the Internet of Things, which is going to have a major impact on most of the areas discussed above. The question every business must ask itself is, “Are we ready for the digital future?” Leigh Andrews (@leigh_andrews) explains, “From the Internet of Things to the Internet of Me, the digital realm is set to have a huge impact on the way we do business.”[5] In Accenture’s latest technology vision entitled “From Digitally Disrupted to Digital Disrupter,” Accenture analysts state that cognitive computing will provide the “ultimate long-term solution” for many business challenges. And, as I have repeatedly written, I believe that cognitive computing will be found at the heart of every digital enterprise. Nothing can be more central to digital enterprise than the digital supply chain.

 

Footnotes
[1] Keith Peterson, “Supply and Demand: Effective Solutions for Supply Chain Management,” business.com, 15 September 2015.
[2] Christy Pettey, “The Next Generation Supply Chain – Are You Taking The Best Approach?Smarter with Gartner, 15 July 2015.
[3] Michael C. Mankins and Lori Sherer, “Creating value through advanced analytics,” Bain Brief, 11 February 2015.
[4] Jeff Boss, “How To Overcome The ‘Analysis Paralysis’ Of Decision-Making,” Forbes, 20 March 2015.
[5] Leigh Andrews, “Are you ready for a digital business future?” Bizcommunity.com, 12 May 2015.