Strategic Supply Chain Technology Assessment

Kevin J. Hume, Partner - Supply Chain Technology, Tompkins International
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Kevin J. Hume, Partner - Supply Chain Technology, Tompkins International

The pace of change in the supply chain world and the supporting technologies is nothing short of breathtaking. The explosive growth of internet based commerce has completely transformed how consumers and businesses access goods and services sold by organizations. The key question for supply chain technology leaders is, how has your technology kept pace with the transformational demands brought about by the internet, mobility, big data and Omni-channel. The best way to determine the ability of your supply chain technology to keep pace and effectively adapt with change is to perform a strategic assessment across all aspects of your technology portfolio.

“The challenge is to understand how the features and integration requirements support the do now and do next priorities”

The need for a strategic technology assessment arises from a number of different perspectives including:

• Executive leadership wants to understand the competitive advantages-shortfalls-risks associated with the supply chain technology platform.
• Systems and platforms past end-of-life – they present significant business continuity challenges.
• Innovative new service offerings, business acquisitions, or channel expansion opportunities have identified support gaps in the existing technology platform.
• Emerging technologies and cloud based solutions that provide new avenues for driving value in the supply chain.
• Opportunities to lower total cost of ownership while maintaining or improving value provided to supply chain operations. .

Scope – The first step in the assessment process is to identify what exists within the supply chain technology landscape currently. You will be surprised to learn precisely how much of the existing business processes are performed either outside virtually any supply chain system or performed within spreadsheets and third party databases. An assessment is a great way to identify where system support is lacking, weak, or in some cases redundant across multiple systems.

Typically, the assessment scope spans all planning and execution aspects within the supply chain. Below is an illustration of a high level diagram identifying all the functions that could or might be considered within the scope of the assessment depending upon whether looking a Consumer Product Goods or Retail organization. The landscape must also show the differences between a pure e-tailer versus a multi-channel retailer.

Requirements Analysis – Once the scope is identified, an understanding of the current, emerging, and future needs across the entire supply chain is needed. This task is complicated by the fact that most organizations have few if any staff that have the time or experience to effectively define the needs and validate operational support across the entire supply chain. Supply chain technology leadership must leverage e-multiple people or teams to collect requirements. Inconsistent details or the potential to duplicate requirements can take place if not managed properly.

Another option is to leverage an external third party with experience in performing a supply chain technology assessment. Bringing a third party into the assessment can provide insight to the most recent developments in supply chain technology as well as perspective on how other organizations have identified and resolved similar challenges.

Gap Assessment – Once all the requirements have been identified and categorized by function, the next step is to understand where the existing business requirements significant depart from the best practice support provided by supply chain technology software providers. Similar to the challenge in requirements analysis, it is difficult for in house staff to identify where requirements depart from baseline functionality, commonly supported by supply chain technology providers.

Prioritization – Once requirements and gaps have been identified, the next step is to understand the priorities within the existing landscape. The priorities are going to be driven by many of the issues that brought you to the assessment in the first place, things like a burning platform or the need to replace new discovered spreadsheets, databases, or tribal knowledge for critical business processes that do not exist today.

Priorities should be considered in a do now, do next, and do later hierarchy. Do now and do next are the highest priority issues, resolved I within the next 1-2 years. The do later priorities represent the issues that are likely to still exist after year 2 in a 5 year plan.

Landscape Development – Armed with an understanding of prioritized needs, risks, and gaps, the next step is to translate those issues into different application deployment models. The only effective way to navigate your way through these different scenarios is with a solid grounding in prioritized requirements and immediate needs. The only effective way to make these decisions is from a planning an execution span over a 5 year horizon.

You can likely argue that functional support for many (but not all) features and gaps can be provided by an ERP or a supply chain suite application. However, you will need to carefully consider whether the added feature sets justify the additional complexity and time to deploy or will a BoB solution offer sufficient functionality with a resulting lower cost-complexity after considering the added integration. The challenge is to understand how the features and integration requirements support the do now and do next priorities.

Next Steps – The execution of the do now and do next steps begin the transition of this effort from strategy to execution. Once do now and do next steps have been completed an interim assessment of the do later steps should occur around the end of year 2 of the 5 year plan. These do later steps are never ‘set in stone’ as part of the year 1 strategy. It is always best to understand that the do later steps are simply a placeholder to set a potential strategy for the longer term initiatives.

Final Thoughts – When you continue to ‘kick the can down the road’ with increasing obsolete supply chain technology, you steadily increase the breadth of impact and corresponding risk to the business by not taking a more strategic, longer view of how your supply chain technology applications function together to meet the business needs.

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