Supply Chain technology solutions and the “shiny object” syndrome

SupplyChainBrain released an article on optimizing DC performance to handle the increase in small orders that must be rapidly filled and the reoccurring peaks of demand for these small orders. IndustryWeekDaily reported that U.S. manufacturing expanded in Sept. according to ISM’s index (the index shows manufacturing’s Sept. index to be 51.5 indicating growth). ISM’s new orders gauge jumped to 55.1. Increases in manufacturing are also being experienced in the Euro zone.

All of the above places more pressure on your supply chains. How do you begin to handle it effectively?

The full answer requires integration of many things from the strategic, tactical, and operational areas. We will explore these items over several postings. For this post, we’ll look at the answer many reach for first: technology.

Amazing technology exists that performs incredibly well in given situations. More amazing technology is coming out every day. Add to the quantity of new technology the advantages great implementation provides: synergies between technologies, digital platforms, and networking ability (like cloud use for data) all of which allows you to have better, faster, more accurate data on what you need where and when you need it. No doubt about it, supply chains are becoming quite exciting.

And quite daunting.

And quite a quagmire for potential tech spending disasters.

How to stop a disaster from happening?

1. Know what problem you are trying to solve or what capabilities you really need to provide.This means you need to know both 1) the real, underlying, root problem and can state it in words and phrases everyone understands, and 2) your business’ strategy.

   You also need to know exactly where the problem is located and what processes it affects. By integrating processes and metrics from operations up through tactical and into strategic areas, you’ll be able to rapidly diagnose where the problem resides and all the processes it affects.

2. Know the full requirements for the solution set.Cross-functional teams are required to create a well-rounded understanding of the problem and the solution requirements. These teams need to include, or at least consult with, someone with customer knowledge when large system solutions or anything that affects customer performance are being discussed. Solutions can no longer be chosen just by the IT team. The best solution may not be technical in nature. The problem may be inefficient processes, training deficiencies, communication delays, etc.Any solution, technical or otherwise, must be vetted not only by those who will use the system, but also by those who interface with the system. If this does not happen, you’ll not only have discontented employees (and maybe customers), you’ll surface problems that should have been addressed in the solution identification or setup stage, and it is most likely that your solution will be immediately worked around and abandoned if possible.
3. Understand how a technology solution will affect the business’ financial performance.This means you need to know how the solution will affect the customer and meet their value requirements. By aligning your supply chain processes to customer values and requirements, you will be able to more accurately predict the outcome and return on the investment. Solution matching requires real data and real knowledge of the customer base and capability requirements.Often, solutions are put in based on obtaining performance we believe the customer will appreciate and pay for, yet our belief does not match reality. Once online, solution does not provide the anticipated return and our workforce becomes more cynical toward “shiny objects” and “the flavor of the month” projects when in reality, neither was the basis for the solution implementation.For example: If an improvement results in faster service, but the customer base cannot accept anything earlier than a given due date that is well within current capabilities, the solution will not solve a real customer problem for this particular supply chain and will not generate the return promised.

If we mismatch our solution set with our solution requirements (which include customer requirements the supply chain must meet), we not only invest inappropriately, but we often also hinder the performance of the very supply chain we were trying to improve.

There are great technologies out there your business can use effectively. Please take the time to understand which ones really will work best for each individual supply chain and your company’s desired performance.

Key words and concepts: performance, supply chain, change management, technology, problem solving Cynthia Kalina-Kaminsky with Process & Strategy consults with and provides training for organizations eager to increase their competitive value by helping enable growth, align performance, make and move product (even when the product is a serving of electrons). She has been invited to teach SCOR (Supply Chain Operations Reference model) in Baton Rouge this October. SCOR is the framework Fortune 500 companies use to increase their agility.