“I paid for the weights – so where are the muscles?”. Applying IT doesn’t guarantee results either without waves of effort. Let’s exercise more …
You’ve done the basics – gym membership, cool outfit, matching wrist and headband doing circuits twice a week. That’s like stable implementation of your “backend system” typically ERP you feel comfortable with.
Everyone’s doing it but some seem fitter, what are they be doing? Probably more than gym visits. Maybe training for a marathon target-time. Or cycling with an Argus podium in mind. Or both. They joined a club, run/cycle with others – competition to realize their technique is no longer sufficient. Time for some new tricks.
Again it’s the same for supply chains. Supply chain is a Team-Sport reliant on collaborative plans and end-to-end execution in harmony, where targets and focus are needed to win.
Sharing data inside your company is fine – departments talk to each other – but Customer-First companies help their customer’s customers. The company next down the line (your customer) plus the end-customer/consumer without whom there would be no demand or supply chain either.
Customer First and Service
Mature organizations know Integration exists at both ends, procurement to supplier and selling to customer. Sure rely on a forecast, but what if your customer’s forecast missed the real market signals and hence lost you sales? Work together creating the most accurate forecast you can, linkup end-consumer demand and don’t just repeat last year’s sales with 5% on top.
Service-levels require best information and forecasts – uncertainty in supply and demand means more stock is kept buffering this and reduces uncertainty:
- Share plans with key customers
- Give them access to your ERP system to see what stock you have and when you plan replenishment
- Make customers stock products specific only to them, you keep buffers of products you sell to many customers
- Help optimize the supply chain stock-mix and location with collaborative Forecasting and Inventory Optimization
Beware the last guy in the chain doesn’t price-up to forsake all your cost savings – markets lead consumer pricing, not naive suppliers
Procurement IT advances include collaborative planning throughout the supply chain, including the customer end. To win your race here you should be looking at some of the following
- Differentiate between Strategic Sourcing and Operation Procurement
- Strategic Sourcing involves analyzing where/who you spend with, identify the percent of spend they command. Check supplier group-companies and your group structure as spend can be a broad network of group companies selling to yours. Rank them, contract them, price and deliver better with them.
- Sourcing uses Request form Quotation (RFQ) to keep suppliers alert. Do your suppliers do quality checking rather than you? Try trust but support with stats. Sourcing is about selecting, negotiation price and conditions.
- Operational Procurement is about plans, order quantities, meeting pack-sizes (less damage), collaborating on changes to plan and near-horizon deliveries so both are effective avoiding waste. Think catalogues and shopping-cart IT here to make it easy for purchasing officers to order the right (and approved) items.
Let’s not forget manufacturing. Industry 4.0 pushes us to utilize advanced technology to increase operational efficiency/visibility, shorten production lead-times while reducing costs AND delivering greatly improved customer-service. But Covid-19 lockdowns and our changed buying habits have affected the economy pushing leading companies from the Industry 4.0 Train to the 5.0 Express. Where man and machine are connected, collaboration between real people and smart machines. Companies are digitizing the factory by collecting data from machines and other devices automatically, fast-tracking the journey towards the Smart Factory
At the same time ERP has been reinforced as a must for manufacturers. It is the basis on which they streamline processes through automation, using and providing accurate real-time information, and reducing costs. As a result, smart-apps/modules like SYSPRO Manufacturing Operation Management (MOM) enhance factory scheduling, directly capture visibility of progress to enable faster reaction (agility) while feeding operational and labour efficiencies.
IoT, still in the front carriage, also gathers real-time data from a range of smart devices across supply chains covering production counts, quality, safety, product and process innovation and more. With monitoring technology IoT can track machines/equipment/devices performance in situ before failure – all while in synch with SYSPRO ERP and Predictive Maintenance.
5.0 spikes interest in Human-Centred AI which will grow as Covid continues and remote work and social distancing remains. Artificial intelligence will be the standard for addressing these challenges, but it will fail if companies don’t consider how humans interact with and leverage these new technologies
Plus, to make take advantage of these technologies it is essential that companies upgrade to the latest ERP version, in our case SYSPRO 8.
So, are you running a company sports-day or a marathon?