BPM Strategies - March 2008 - (Page 7) With the concepts of supply and demand converging in recent years, supply chain efficiency has profound implications on an enterprise’s ability to meet its customers’ demands, the enterprise’s brand, and the overall financial success of the enterprise. Enterprises and their suppliers must address these issues; however, insufficient vendor interoperability, competing priorities and economic factors have combined to slow the evolution to a more efficient supply chain. The concept of agility has become a familiar mantra for enterprise IT and business today. An increased requirement to respond to demanding customer needs and industry dynamics means that aligning IT and business flexibility will have a profound effect on repeat business, and cross-selling and up-selling opportunities, as well as on the enterprise’s brand for flexibility and premium customer service. An enterprise’s supply chain is a primary test-bed for this, with agile and adaptive supply chains becoming more than a competitive advantage, but a requirement to survive. In the past, enterprises would tolerate excess inventory, delayed shipments, and stock outages but now they do so at their own financial peril. The benefits of supply chain agility are many: An adaptive enterprise that can respond to customer demand changes More efficient planning horizons The elimination of stock-outs Optimization of spare-parts inventory Improved relationships with suppliers Efficient logistics and improved relationships with transportation providers Faster time-to-market for new products Faster adherence to regulatory compliance, at lower cost Enterprises can leverage new technologies that enhance their proMarch 2008 ductivity in areas such as a demand forecasting, distribution and logistics, and procurement to optimize supply chain effectiveness. Most supply chain applications have at least 10 and sometimes 20 different information sources, which make it difficult to find the correct information quickly. Agility is decreased when supply chain managers need multiple sources of data and transactions in order to manage inventory, place orders, receive orders, and get parts or finished goods to their location. This arduous process adds cost to the equation and delays shipments, which reduces customer satisfaction. The most visible manifestation of the problem caused by the above scenario, is when an order is missing or late. A supply chain manager, attempting to track the order back to a supplier, in many cases, will have to access a variety of procurement, fulfillment, logistics and inventory applications in order to find the status of an order. These applications may reside on any number of systems, ranging from a shipper’s personal computer to the corporate mainframe, and may include a variety of packaged, custom and legacy applications. Navigating multiple applications and departmental silos creates the following issues: Lack of actionable insight affects customer satisfaction. Longstanding studies have shown the cost of slow response times is magnified many times when customers make other choices. Opportunities are missed for cross-selling and up-selling. Redundant and manual data entry increase time to problem resolution. Multiple interfaces increase personnel training needs. Some of the primary reasons why supply chains have struggled to be truly efficient and agile are the lack of quality information, as well as the lack of actionable insight. As a result, supply chains will not fulfill Agility is decreased when supply chain managers need multiple sources of data and transactions in order to manage inventory, place orders, receive orders, and get parts or finished goods to their location. 7
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