Supply Chain Execution Convergence

Global Supply Disruption

Posted in Global Commerce Control, Supply Chain Execution, Supply Chain Execution Convergence, Visibility on December 2nd, 2010 by Edward Blinick – Be the first to comment
A major contributor to sleepless nights is the impact of non-controllable traumatic supply disruption.   Today, every global supply chain that deals in the Far East or South Asia is threatened with potential supply disruption.

If the low level conflict between North and South Korea escalates, supplies and markets in South Korea will most likely be affected. The degree of disruption, if it occurs, will depend on the spill over into Japanese, Taiwanese, Philippine and Chinese trade. While the situation in another hot-spot, the South Asian region, is still “relatively” stable, it can be tipped into crisis mode by any number of flash-points erupting into conflict. Iran, Afghanistan and Pakistan are but a few of the areas where political instability can turn into critical supply issues.

Most companies address (to a greater or lesser degree) these and other disruption issues as a matter of basic supply chain strategy.   However, the ability to react if, and when, the disruption occurs is critical to lessening the impact on the business while being able to take advantage of the competitive opportunity presenting itself. Being able to fulfill obligations to customers and suppliers depends on one’s ability properly see, develop and execute an action plan that limits the effects of the disruption and ensures that supply can be maintained.

Visibility and Agility – The Key to Adapting to Traumatic Supply Disruption

When traumatic supply disruption occurs, the more quickly a company can respond, the more likely it is for the negative consequences to be mitigated.  There are two fundamental components to minimizing supply chain disruption effects.  The first is a continuity plan, while the second is a business disruption insurance program.

To address business continuity when traumatic supply chain disruption occurs, companies need visibility into virtually every aspect of their supply chain at the product level. They need to be able to analyze:

  • what supplies are at risk
  • what quantities are at risk
  • what alternative supply sources exist for the products at risk
  • what logistics capabilities exist to insure supply continuity
  • what are the best total landed cost alternatives for the products to be supplied
  • what are the compliance issues related to supply fulfillment
  • what are the time constraints in restructuring the supply availability

Once analysis is complete, the organization needs to swiftly execute a comprehensive procure-to-deliver capability to reduce the costs associated with the implementation of the alternative sourcing.  The level of agility in execution is directly linked to the access of information, the speed of analysis, the response time for decision-making, and the ability to put the decision plans into action.

Effectively responding to supply disruption requires systems that present information comprehensively from source availability and inbound logistics options to the manufacturing or distribution network.  Visibility into product, supplier and service provider compliance is integral to the supply acquisition decision.  Finally, integrated total landed cost management is an important supporting function for insuring optimal supply purchasing decisions.

By definition, traumatic supply disruption can be anticipated and even planned for.  However, until the disruption takes place, there is little that will be done in the way of supply disruption mitigation.  When it happens, a company’s success (whether real or relative) will depend on the speed by which it reacts and its agility in putting plan to action.  Those companies with highly tuned global supply chain systems will be the winner both in normal times, and specifically when supply disruption occurs.

Challenges of the 21st Century Global Supply Chain

Posted in Blinco Systems News, Global Commerce Control, Supply Chain Execution, Supply Chain Execution Convergence on November 26th, 2010 by Edward Blinick – Be the first to comment

In many instances, 25-40% of an organization’s business is transacted internationally. This number has risen dramatically over the past five years and is predicted to reach anywhere from 35% to greater than 50% within the next decade.

With this continuing seismic transformation to a global economy, the complexity of a company’s supply chains increases geometrically if not exponentially. The ability to manage inventory, costs, and compliance effectively and efficiently across a network of global supply chains is being severely compromised when using traditional processes and technologies. Rising levels of inventory, misunderstood total cost of product ownership, increased regulatory business compliance and the risks associated with international business have brought an unprecedented level of awareness to the C-level executives.

With this growing percentage of global activity in a company’s product mix, the way a company constructs and manages its global supply chain has a significant and growing impact on its financial results and strategic competitiveness. The inability to effectively manage these complex supply chain networks, places organizations at significant risk. Whereas the ability to command, streamline and control the global supply chain environment brings with it incredible opportunity and strategic advantage.

Synchronizing Your Supply Chains

The key challenge to developing a comprehensive 21st century global commerce management capability (the management and synchronization of international physical, financial and information supply chains) is rooted in the basic architecture of information systems that are poorly integrated across functional business silos and units. Lack of synchronization limits the ability to predict and respond to events across the supply chain, resulting in sub-optimal results. With many activities across the global supply chain being outsourced to contract suppliers and service providers, the level of direct control over results is limited. To achieve and assure high levels of performance in this less controlled environment, companies must have the appropriate tools in place to influence partners and service providers to deliver the highest levels of compliance to contracts and commitments. To achieve a best-in-class global supply chain capability requires integrated solutions that synchronize activities and information across multiple participants in the supply chain.

The synchronization of global supply chains is comprised of four elements, each of which is critical to effectively managing your global supply chains. This synchronization is imperative if superior supply chain and organizational performance is to be achieved:
1. Developing a global network of suppliers and service providers
2. Retaining people with the right level of expertise to manage the global environment
3. Creating the right processes
4. Providing the information infrastructure that enables controlled global supply chain execution and management

Integrating the Physical and Financial Supply Chains

Within an organization, operations handles the physical supply chain while finance manages the financial supply chain. Whereas management’s focus is on setting strategic goals and overseeing the activities to ensure these goals are met or even exceeded. Virtually all see their world through the presentation of tangible assets in digital format. In a perfect world, information represents the physical and fiscal worlds as they are, in as close to real-time as possible. Accurate and real-time information that is available for collaboration across an organization’s supply network (internal or external) and that supports timely execution of tasks and responsibilities, tactical problem solving, and strategic decision-making, is the fundamental underpinning of optimal global commerce management.

Information and visibility, while important in and of themselves, are limited in their potential unless put into meaningful context. Contextualized information allows users to understand the implications of an action within the supply chain and its effect on a specific activity. It empowers users to make optimal decisions.

Contextualized supply chain information enables users to see where an item is in its supply chain life-cycle and understand its effect on distribution or manufacturing. Contextualized financial information allows users to see the impact a physical event has on the cash and asset position of the company, and to optimize financial asset allocation and execution. With intelligent contextualized supply chain information, management has 100% visibility into where any department, business unit or organization is at any point in time.

e-Collaboration – Powerful Supply Chain tool?

Posted in Collaboration, Global Commerce Control, Supply Chain Execution Convergence on September 30th, 2010 by Edward Blinick – Be the first to comment
I recently came across two fascinating research papers on e-Collaboration and its value.

http://www.eurojournals.com/ejsr_34_3_04.pdf
http://www.ccsenet.org/journal/index.php/ibr/article/viewFile/807/796

For supply chain professional’s e-collaboration has exceptional potential.  However, there are 2 major design issues that must be overcome in order to have collaboration tools broadly accepted within an organization.  The collaboration tools must be highly user centric and they must integrate into the user’s everyday workflow.  Quite a lot has been written over the past several years on the value that collaboration brings to the business world, yet the uptake by business has been limited.

In order to be introduced into an organization, the collaboration tool must meet a high level of security that fully mitigates the risk in terms of uptime, susceptibility to hacking, and controlled access to sensitive information.  However, in order to be accepted into the organization the collaboration tool must also meet the minimum usability criteria of the user community.  It is at this level that many collaboration projects fail.  Simply stated the collaboration tools are too limited in their design for ease of use (for the user requirement) and to limited in their scope of purpose.

Current collaboration applications focus on the ability of the tools to provide value to the organization in terms of knowledge management, project management, and document sharing.  The focus is on providing a tool where people of like interests can organize themselves in communities around specific goals to achieve a common end.  While all this is important, its uptake in the organization still requires user buy-in.  In much of the literature published about the collaboration applications there is strong reference to how to manage the implementation of the collaboration tool and project.

To me, having to manage the implementation and acceptance of a collaboration project is counter-intuitive.  By definition, the collaboration tools designed for business should have the same ease of acceptance as the social networking tools.  The user community, managers and operators, should want to use collaboration tools as a normal extension of their work flow.  The implementation of the collaboration tools should be driven by the user community and not by organizational fiat.

In order to achieve the user acceptance and popularity of social networking sites like Facebook and Twitter, the collaboration tools must be easy to set up, dead simple to use, and intuitively support the user in the daily routines of their business day.   This means all forms of interpersonal communication and collaboration.  If these “acceptance” criteria are met the uptake in the organization will be viral – just the way it is in the social world.

The challenge of most collaboration software for enterprise, is that the user WORKs on one enterprise system but COLLABORATEs  on another (or multiple).

The global supply chain is exceptionally complex.  With more organizations sourcing and distributing globally the need to be able to seamlessly share information and communicate quickly, across multiple organizational boundaries (internal and external), in real time, about supply and demand issues is critical to managing and achieving corporate business objectives.  Over the next several months, Blinco Systems will be launching the Collaboration Station, its collaborative tool that seamlessly integrates to its 3rdwave GCM, global commerce management, solution.

The real differentiator for the Collaboration Station is that it  is designed to support the user in their daily “real work” through interactive “collaboration and communication”.   Facebook / twitter are raging successes because the goal of their user is social collaboration.  In the enterprise, the goal of the user is completing work activities effectively and efficiently.  For an enterprise collaboration tool to succeed its objective must be to simplify the user work experience and improve business results.  The goal of enterprise collaboration is to facilitate user work.

The Collaboration Station is  designed with the supply chain user in mind.  Its primary focus is on providing intuitive collaboration and communication for problem solving, small issue resolution, and knowledge sharing as an integrated component of a greater supply chain solution.    The Collaboration Station provides for project management, document sharing, and knowledge management that other collaboration software applications deliver, but in a more fluid and dynamic environment that reflects typical user behavior.

Follow us on Facebook for more information on the roll-out and availability of the Collaboration Station.

Supply Chain Execution Convergence – What does it mean?

Posted in Supply Chain Execution Convergence on June 14th, 2010 by Edward Blinick – Be the first to comment

I just attended the Supply Chain and Logistics Summit down at Stone Mountain, GA. During my meetings I met with V.P.s and Directors from large public companies and smaller privately held firms. Most were for profit but in one instance the company was a not for profit 3PL.

My obvious reason for attending was to mine sales opportunities; however a high motivator was to gain insights to the current issues and drivers that are top of mind with supply chain professionals. While the profiles of the organizations were dramatically different and the metrics they use to measure their success varied, a similar theme was evident.

A key, if not the key, challenge for most senior supply chain executives is their lack of a singular view of all the products, players and actions across their supply chain. They lack the fundamental ability to easily see what is happening and the downstream impact on the organization’s supply chain objectives.

While there are many very competent supply chain solutions that support operational silos, there are very few solutions that enable convergence of the information to provide senior management the visibility at the level needed to make more educated decisions, and operations with the information to execute their functions easily and efficiently. Dwight Klappich, analyst and research Vice president at Gartner, recently quoted in an interview in Inbound Logistics presented this view: “While process orchestration and optimization within functional silos has delivered value in many cases, the next wave of value will require cross-silo process integration, namely the ability to orchestrate an end-to-end process such as order-to cash.”

Supply chain execution convergence is:
• the integration and synchronization of data from all partners in the supply chain,
• converting that data into meaningful information,
• making it visible with situational context,
• supporting organizational decision-making,
• and, providing the infrastructure to act.

From a global supply chain perspective convergence is vital to effectively carry out “organization” level supply chain objectives while supporting the functional silos with operational infrastructure. Without convergence of supply chain operations and information, managing global external partners is sub-optimized and internal operations are relatively less efficient and effective.

The concept of supply chain execution convergence is easily understood and resonates very well with global supply chain professionals. The challenge is how to accomplish it?