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A Macro Trend for How We Manage the Supply Chain

By Steven Crooke July 25, 2018 by Steven Crooke

Supply Chain ERP System

What Does Globalization Entail for the Modern Supply Chain?

Before we had the luxury of exchanging information at the pace we do today, we relied on discussions by telephones, letters or memos. International transportation was limited to ships and local transportation moved at a snail’s pace. The business was localized and large companies were siloed. This was driven out of necessity – there was no global competition, and integration was not a word that applied to business.

Then came the rapid pace of advancements that would set us on the path of globalization and integration. In the last 100 years, we have experienced the invention or booming growth of the computer, cell phones, the internet, flight, space travel, and satellites.  With all of this technological advancement- communication and travel have become significantly easier, and the world has become a much smaller place.  This has triggered a global economy with integrated processes across many countries. We have been put in a position to benefit from globalization and integration – or be destroyed by it! The concept of the Supply Chain recognizes that the act of supplying a product to a customer involved an ever more complicated series of steps spanning the acquisition of raw materials and their eventual procurement as a finished product by a customer.

In order to manage the ever-increasing series of steps and actions involved in the Supply Chain, we recognized that it would be great to see all and know all.  After all, we can only respond to events and actions that we know exist. Systems have been slow to catch up on providing that transparency and integration that would allow us to know, at any moment in time, the exact financial position of the company, or location and cost of a production order or even the exact inventory level of one of our critical raw materials. Extending back to the days when we had paper “systems” all the way through till today – the common theme is that we have silos, and, thus, static information which is delayed and not synchronized. We have many versions of the truth.


The Rise of ERP:

Within the last 15-20 years, we have seen the rise of integrated ERP systems – technology that allows seamless integration of all components of your Supply Chain – with one place to view the components (or data) in real-time. This technology has done a spectacular job of allowing full and transparent visibility into any data element anywhere in the Supply Chain.

However, organizations have been slow to adapt to this change.  It turns out that once the system is implemented, it requires a matching organizational alignment to utilize the system effectively to manage your Supply Chain.  Much like the beautifully executed tango dance requires two equally skilled and aligned dancers – the Supply Chain ERP requires an equally skilled and aligned organizational team to fully function.  This is where companies have struggled – and continue to struggle. A system change seems to be an easy thing that can be pushed off onto the IT department to execute.  If it does not work, then it is the IT department’s fault.  The reality is that a decision to have access to non-siloed data, in a real-time and in a meaningful way, relies on the right system and also the right set of accompanying process and accountability structures in your people. This is a lot harder to do, it requires changes that are more challenging to make and requires people to change behaviors, reporting structures and processes that have been in place for, sometimes, hundreds of years.

The good news is that this change is not as difficult to set into motion as one may think. It requires a clear plan detailing a future state of the organization around data accountability. This is not just a system design, it includes people and processes re-think. First, it requires consistency and agreement from the top levels, which is required to ensure the changes are adopted across all areas of the integrated supply chain. Then, once the right process changes and education have been affected, it requires grit and determination to stay with the new changes.  As you may expect, the devil is in the details, but if you can visualize the process with the end goal, with the right Sherpa, you can succeed on the journey to a successfully implemented ERP system.

To find out more details about this type of journey, and what it will really involve, contact Reveal. We have a successful track record of detailing the unique plan that works best for your organization while guiding you step by step throughout the entire process. We work shoulder to shoulder with your executives all the way from the material planners to the shop floor workers. A solution’s success can only be measured by its business impact—see how we’ve impacted others and start your journey with us today!

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