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CHARACTERISTICS OF THE NEXT GENERATION
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An effective roadmap will take you to the next generation but what will the next generation look like, and how will it be different from today Few would argue about the benefits of the extended supply chain and the idea that in order to optimize value, you need to look beyond your own organization and your immediate customers and suppliers. In practice, this means achieving
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Enterprise connectivity business and transactional systems that are linked, allowing data to be seen and transported to different entities within the supply chain Distributed decision making bidirectional information flow and defined business rules used to manage ongoing changes in demand and supply
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CHAPTER 6 A Roadmap to Change
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Real-time performance management real-time, accurate information available to enable rapid and informed decision making
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While reacting immediately to events within the extended supply chain and establishing seamless collaborative processes are objectives for many companies, in actuality, very few can do them effectively. This is so because today, process and data standards, as well as information-system architectures, can be major inhibitors to the various collaboration approaches discussed in 4. Many systems in use today still rely on point-to-point or hub-and-spoke architectures. Their primary utility is to move materials more quickly and efficiently. And today s supply chain strategies and processes reflect the limitations of these tools. Next-generation supply chain tools will emphasize collaboration and information availability more than speed and efficiency and support three fundamental characteristics: transparency, flexibility, and simultaneity. As these technologies continue to evolve and supply chain practitioners become more comfortable with their effectiveness, strategies, processes, and organizational capabilities will evolve in parallel. Figure 6-3 shows some specific applications that you may consider using to enable these next-generation characteristics as you develop and manage your roadmap to change.
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Transparency enables visibility into the end-to-end supply chain. Companies that can see the status of their supply chain resources and transactions both internal and external can make more timely decisions. Transparency can create value in numerous ways. If you know the status of key resources, you can make better use of them and optimize the ongoing balance between demand and supply, boosting efficiency and productivity and lowering costs. End-to-end visibility also can provide early warning of potential problems and facilitate root-cause analysis when something goes wrong.
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Flexibility
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Flexibility is the modern-day hedge against uncertainty. As supply chains become increasingly lean, cushions of inventory and backup resources used to meet unexpected demand surges or supply constraints are being called into question and scrutinized carefully they re too costly to serve as buffers. Thus companies will find new ways to be flexible without the
Strategic Supply Chain Management
F I G U R E 6 3
Enablers of next-generation systems capability.
Next Generation Characteristic Examples of Information System Solutions Enterprise Resource Planning (ERP)
Description Provides a foundation for visibility of information, such as inventory levels by location
Transparency
Supply Chain Analytics Enables extracting, processing, and pushing data toward decision makers Supply Chain Event Management (SCEM) Alerts designated recipients to exceptions to preset boundary conditions so that corrective actions can be taken as needed Wireless, radio-wave-based technology that allows companies to track tagged items without contact or line-of-sight scanning Enables shared information on orders, forecasts, inventory status, and stockouts Enables shared information on orders, forecasts, inventory status, and stockouts Optimizes use of supply chain resources, including capacity, materials, and labor, while enabling execution in accordance with company-de ned priorities Allows companies and their key customers and suppliers to integrate the requirements and constraints of each collaboration partner in co-developing forward supply plans Integrates the work ows needed for simultaneity De nes business rules and associates them with business processes so that companies can create expert systems that monitor the supply chain
Radio Frequency Identi cation (RFID)
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