I have enjoyed reading the Supply Chain Matters blog, maintained by Bob Ferrari. Recently, Bob posted on what he views as the 'Seven Grand Challenges for Supply Chain Management'. To articulate my own thoughts through my personal experience working in Northeast Asia and for Asian firms, I will go through each challenge and attempt to provide some commentary with an Asian bent.
As we go along, I want to frame each challenge within the framework I have often used here--the 5 supply chain architectures as advocated by my former SCM professor, Dr. Cavinato, introduced here. However, for the first time, I want to add a 6th architecture--people. Why? Up until now I have been lumping people into the physical architecture category, but the more I use this framework the more I come to the conclusion that people are too dynamic and too important to analyze in this way. They deserve their own architecture when evaluating supply chains. So, let's review these architectures:
Physical--the actual movements and flows within and between firms, transportation, service mobilization, delivery movement, storage, and inventories.
Informational--the processes and electronic systems, data movement triggers, access to key information, capture and use of data, enabling processes, and market intelligence.
Financial--the flows of cash between organizations, incurrence of expenses, and use of investments for the entire chain/network, settlements, A/R and A/P processes and systems.
Relational--the appropriate linkage between a supplier, the organization and its customers for maximum benefit; includes internal supply matter relationships throughout the organization.
Innovational--the means by which a firm identifies, prioritizes, and brings new product/service innovation to market.
Human--the means by which human resources and talent are deployed, managed and developed across the supply chain for greater performance
Challenge #1: Ubiquity of Portable Computing Leading to Real-Time Sensory Networks
Let's start off with the key graph from Bob's commentary regarding his first identified challenge:
"The widespread ubiquity of more cost-affordable portable technologies over the next five to ten years will no doubt provide broader deployment opportunities where any physical sensing of where any item or any asset resides in the value-chain can trigger a series of decision support applications that flag an alert or automatically trigger required action. It has been three years since my initial editorial, and the overall economics of the technology are just beginning to turn positive of certain business cases of wider sensory networks. I remain convinced that sensory networks will have a profound impact on how manufacturers and consumers directly interact with supply and value chains, and there lies the first grand challenge for our community."
When discussing real-time sensory networks, we are basically talking about supply chain event detection and management; this is clearly a challenge to informational architecture. Supply chain event management (SCEM) is simply defined in Wikipedia:
"consideration of all possible occurring events and factors that can cause a disruption in a supply chain. With SCEM possible scenarios can be created and solutions can be planned."
I have discussed in the past some advanced work being done by Enterra Solutions to enhance real-time sensory networks, particularly as it relates to supply chain security at key nodes in the supply chain--such as airports, seaports, and integrated transit hubs that offer multi-modal support systems and facilities.
Companies today ideally would like a completely integrated and interactive, end-to-end supply chain event monitoring tool, but most have initially invested in deploying these systems to register events at the key hand-off points where goods change hands--end of a manufacturing line, at a warehouse's doors, at a customs check-point, or perhaps a customer's storefront or home. More sophisticated systems can be deployed 'in-process', for example, to: monitor the condition of goods aboard ship, issue reports on the performance of a distribution center, or provide information on the running efficiency of a truck fleet.
The important thing to remember in addressing this challenge is not how many events can be managed simultaneously; rather, supply chain solutions should focus on identifying those events that are key drivers to supply chain performance. Based on this, the company can attach metrics to these events so as to be able to manage overall supply chain improvement in a way that will have positive effects on efficiency, productivity, customer service and, ultimately, financial margins, growth and stability.
In cities like Tokyo and Seoul, there is intense competition to put the latest advances in personal technology in the hands of consumers, probably more than any other cities in the world. A recent example of real-time supply chain technology is in the Tokyo fashion industry.
Due to the widespread use of 3G technology, phones in Japan are able to manage high-graphics displays at high speeds, such as video calling and online TV. They can also be used to register train passes and credit for payment at metro stations and storefronts (amongst a multiple number of other functions). Recently, Tokyo Girls Collection, a regular fashion show event popular amongst young, Japanese women has streamlined and integrated its event with real-time, online shopping. Attendees are able to access the site via their cell phones and immediately purchase clothes they see strutting down the runway. The brand distributors can therefore receive real-time data on what is hot and what is not, allowing them to more quickly make key supply chain decisions on design, production and distribution.
The business and industry you are in will determine what events you need to manage and any technology solution should be mapped to this, while having some built-in scalability options for either expanding supply chain event coverage or plugging in to additional event management modules.
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