Biztech Aug 6, 2012
Vikas Sarangdhar, Research Director, Gartner, in conversation with Biztech2.com, talks about the role that IT plays in the supply chain management process, hence stressing on the CIO’s involvement. He also delves into topics such as business analytics, ERP and emerging trends in the area of supply chain management.
How have supply chains evolved over the years?
The definition of supply chain is largely changing. Earlier supply chains were known to be a small part of manufacturing operations. However, today, supply chains are taking on a different role in the form of end-to-end supply chains, which will include planning, making and delivering customer services and even the returns part of it.
What are some of the pain points that IT can help address in today’s supply chain networks for the Indian enterprises?
Visibility through the entire supply chain is one of the key pain points that supply chain heads face. Supply chains follow a process that begins right from demand or product planning, going through distribution and customer service. Companies need to ensure that all these functions are integrated and synchronised appropriately, which requires visibility of data as well as that of the various stages at which the products and services are. Providing greater visibility across the end-to-end supply chain is an area where IT can play a major role.
Another challenge on the supply chain side is availability of data, capturing it (whether manual or automatic), and finally ensuring its accuracy. Many leading companies have already started leveraging technology to deal with this pain point.
How can CIOs play a role in more efficient management of the supply chain network?
The CIO needs to continuously support or act as a facilitator in terms of providing the right technology tools to the supply chain professionals to help them follow the planned roadmap.
The right set of tools mainly depends on the company’s maturity level, which the CIO needs to take into consideration. If the CIO provides very high-end tools at a very early stage of maturity then the company will lose, because those tools will not be well exploited. IT will be regarded as a failure here as it cannot support decisions and this can lead to a conflict between IT and the supply chain entities within the organisation.
Also, some of these technology tools are highly specialised in terms of handling and managing data. In order for these tools to be well exploited, appropriate training needs to be provided to supply chain management professionals. This learning and training process also needs to be driven by the CIO.
What are some of the emerging technology trends in the area of supply chain management?
When it comes to supply chains, companies are trying to leverage new technologies in the areas of sensing and capturing the demand trends. A number of companies today are trying to leverage social media and networking tools like Facebook, Twitter, etc, in order to sense the demand. This is one area that is largely evolving, as enterprises debate on capturing data and converting that into useful information.
Another emerging trend is that of cloud computing, in terms of data storage and the accessibility of data across the globe. Today, as small and medium sized companies outsource data related services, many of them, who have entered the supply chain zone, have begun to opt for cloud based ERP hosting services.
ERP is critical to managing supply chain efficiencies. But, are organisations leveraging it effectively enough?
It is true that ERP is one of the major enablers of supply chain efficiencies. ERP and the related technologies play an absolutely essential role in terms of visibility, data management, and in terms of all these things that we are talking about in the supply chain, especially in the end-to-end supply chain.
But if you want to see broadly, very few companies are leveraging ERP and related solutions to effectively manage the supply chain. This does not mean that organisations are not investing. They are actually going overboard in terms of investing, but getting returns on that in terms of business results and efficient management of supply chain is something that very few companies are able to do. So, there is this huge execution gap that exists in terms of effectively leveraging ERP to help the business.
What role can analytics play in more efficient management of the supply chains?
The integration of Business Intelligence (BI) and supply chain management can today be seen in multiple segments. BI for supply chain works at two levels. At the lower maturity level, it works more for creating right kind of data for decision-making, while at the higher end it helps more in advanced decision-making in terms of analytics, scenarios and risk management.
Supply chain management requires analytics across a broad spectrum, ranging from scenario planning, prediction analysis, forecasting, spend analytics, buying analysis and decision support in terms of stock levels, whether at the supplier’s end, at the warehouses, at the retailer’s end, or at the distribution centres.
Analytics also plays a role in terms of co-ordinating the various functions, within the company. All these functions need to co-ordinate in terms of evolving the designs and change management. IT plays a large role, as a part of the overall end-to-end supply chain.