- 05/10/2021
- Uncategorized
When it comes to technology, companies overlook an opportunity that has the potential to transform supply chain operations and revolutionize the way they do business. Rather than applying new technologies to existing frameworks within companies, successful professionals are thinking about the possibilities these innovations offer, and how their use could help pivot to much more efficient processes.
Incorporation of software and technology precedes other changes
Companies for a long time operated as follows: technology and software always came after changes in business processes. They would first define their frameworks, and then look for software to support those established practices. However, in the 21st century this paradigm is changing. The rapid evolution of supply chain software and technology has transformed the landscape into a much more complex, fast-paced, demanding, and global ecosystem. In order to keep pace with these transformations, professionals have begun to shift their focus to implementing emerging supply chain software and technologies.
A great example of this transformation is the emergence of the iPod and its innovation with iTunes. This platform for music playback is one of the pillars of the iPod’s success, because it provided something that didn’t exist: a means to purchase songs, rather than entire albums. In this case, the iTunes technology was deployed first, and then the industry followed, moving around it, eliminating and updating unnecessary elements of the supply chain. Ironically, then came streaming options like Spotify that would give iTunes and its digital supply chain an important competition.
What are the outdated processes holding companies back?
Many companies still don’t take this path, but instead of making decisions based on innovative technologies, they tend to focus on incremental changes that only offer short-term or suboptimal benefits. It is a situation similar to what happens when highways are widened. When there is a traffic problem, adding a lane to an existing road only offers short-term relief because over time, more vehicles use the additional lane and congestion returns. A more sustainable solution would be to consider an entirely different approach, such as introducing more mass transit through rail and subway lines.
But to achieve a totally different approach, one that looks at the operation as a whole, there is a barrier that companies face. For too long, supply chain execution has occurred within functional silos. Order management, transportation management, supplier management and returns management have functioned as separate entities that are only loosely linked through connective interfaces and integrations. Some “visionary” practitioners have even put together solution sets that allow customers to get all of these isolated capabilities from a single vendor. But the same problem persists: processes operate in isolation. The importance of integrating processes has been addressed by platforms such as the one offered by Omnix, which ensures the integration of all processes to provide global visibility of the operation.
The danger of operations working in silos is highlighted by recent pressures on ecommerce suppliers to offer a variety of delivery options, such as next-day and, in many cases, same-day delivery. Unless the process works holistically, dynamically determining delivery costs and order profitability, ecommerce operations can start to lose money.
The importance of order-centric solutions
All of these disparate capabilities and processes are united by the order. Whether it’s sales, return authorizations, purchase orders, they all exist on a continuum. That is, each type of order can be merged with others, such as transportation orders, production orders, shipments, returns processing and inspections. Most connectivity software and suites do not understand the supply chain as a complex ecosystem and therefore artificially repeat data, and impose boundaries between flows. This prevents further optimization opportunities. The Omnix platform provides a real-time data flow, and thus prevents the use of information that is outdated or unreliable.
When platforms focus on orders, companies can revolutionize the way they manage and leverage their supply chain by spanning the entire network. Siloed platforms have the option to optimize inbound or outbound flows, but separately. Thus, they optimize one, but it may be to the detriment of another. In contrast, order-centric software integrates these different processes to create a single, continuous, end-to-end flow. In this way, companies can take better advantage of opportunities to improve customer service, maximize revenue and reduce costs.
As mentioned, unified flows enable companies to improve the end-to-end execution process, rather than simply optimizing only one leg to the detriment of another element. This is because they enable companies to consolidate and merge orders with different delivery requirements. They also enable seamless multichannel operations at every point of contact with a customer, thereby improving service and gaining sustained customer loyalty.
This convergence of technology with the supply chain, as well as the growing desire for companies to leverage innovations proactively to stay competitive, is fostering professional roles, or “digital officers,” that represent both technology and commerce.
These types of changes hint at what the future of the industry looks like: it points to companies increasing their recognition of anticipating the value of technological innovations. It will also increase their recognition of supply chain solutions that are order-centric, designing their processes around them, not the other way around. This is increasingly critical in order to be competitive in the foreseeable future.
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