Why Map Supply Chain Processes and Systems?
As supply chain management technologies mature into mainstream acceptance, they are extended or replaced by the newest applications fueled by business necessity and technological innovation. The pace at which new “solutions” are introduced far exceeds that in which mature “solutions” are retired. Thus, supply chain managers in search of tools to support operations have an ever increasing number of technologies on the active market from which to choose.
The lack of holistic picture of where and how these technologies fit into the overall Supply Chain process prompted us to design an integrated map that coherently illustrates available technology and the process each supports. The map strives to demonstrate the touch-points that exist between critical supply chain processes in a cross-functional organization.
Before reviewing the map in detail it is important to stress that we approach its creation from the perspective that Business comes first. Proven management concepts are the foundation upon which this representation has been built. Therefore, our vision was to create a map that considers a supply chain in its desired state:
- Functions are aligned strategically and are part of the Supply Chain which is engineered to deliver enterprise goals.
- Product life cycle management occurs through the concurrent and cross functional design of products and in order to minimize, cost, time-to-market, rework, and delays.
- There is a direct and bi-directional connection between the strategic and execution levels within the chain.
- IT (Information Technology) is used as an enabler of Supply Chain processes by creating “Electronic proximity” between the work groups and cross-functional members of the chain.
The Supply Chain map is a matrix of vertical aligned areas (Supply, Product, Demand), and cross-functional (or horizontal) processes such as Product Design or Demand Forecasting. The map is intended for use as a reference tool during a strategic review or the design phase of supply chain architecture.
This map is by definition in constant evolution because of the appearance of new business models, processes and technologies.
We do not suggest nor would the reader agree that every supply chain process or technology is identified within the map.
We do suggest that the map illustrates the core processes one must consider when assessing the design of a supply chain.
We propose this map as a reference framework for the professional involved in supply chain analysis.
The Concepts of the Integrated Supply Chain The purpose of a company is to bring to its customers, the product and services they need, where and when they need, at a profit. All business processes within the enterprise must have these objectives as underlying purpose of their being. All processes in the organization must focus directly or indirectly on this goal.
The need to meet customer demand in an efficient (profitable) manner has resulted in the build out real time operations, or if you prefer, Demand Driven Networks. DDN’s respond to a demand signal then propagate this signal all the way through a network of suppliers and partners. Business models that increasingly rely on real time operations to satisfy customer demand require highly integrated tools and processes at both the execution and strategic levels within the operation.
Let’s keep in mind the market forces that continue to drive, and justify, the significant investment in supply chain integration:
- Globalization expands the geographical span of operations which makes systems and process integration a significant competitive advantage
- Global competition necessitates the acceleration of product cycles, reduction of design-to-market times.
- Perpetual innovation reduces products-lifetimes.
- Customer demand and competitive pressures requires companies to have product and services available when and where needed.
Thus, the rapid development of demand-driven models.
- Cost pressure is constant.
- Pressure to keep inventory levels at optimum level due to cost (mostly carrying and obsolescence costs) is a major constraint.
- Customers take high product quality and service levels for granted.
Because a company must often react to these market pressures with short term process and technology fixes, IT Information Systems infrastructures increasingly become patchworks of applications and technologies. This process is compounded by the comparatively slow evolutionary nature of enterprise resource planning systems (ERP).
ERP systems are the backbone of a business’ information systems. These systems typically provide foundational business process support for financial, procurement, inventory, and human resource needs. Third party products are often leveraged, due to time to market advantages and niche expertise, to provide the most advanced capabilities and typically integrate with the ERP to complete the system.
Supply Chain solutions are an excellent example of this infrastructure phenomenon.
Demands on the supply chain are constantly evolving, requiring organizations to manage more things.
This demand is frequently satisfied by niche players with deep expertise in the particular functional area. Because niche players are frequently faster to market than the ERP OEM’s, they often gain significant market strength in their area of expertise.
These solutions gain success as niche modules that “plug” (integrate) into the ERP system.
As these applications grow and mature, they become mainstream. The industry trend shows that the ERP providers tend to extend their packaged solutions through acquisition/absorption of the niche players. These include applications such as APS (Advanced Planning Systems), e-Commerce suites, Business Intelligence, Warehouse and Transportation Management, Customer Relationship Management and more recently Contract Management, Risk Management, Compliance Management, and Point of Sales solutions.
By the time this process fully evolves the patchwork of solutions described earlier is quite vibrant. One must consider the significant competitive disadvantage that waiting for the mainstreaming or OEM absorption of third party solutions could create.
Although we agree that fully integrated packages from a single source are almost always advantageous, rarely do companies have that luxury. Market pressures require that businesses respond.
Our conclusion: don’t worry about the perfect technology solution but rather; fix the process, when necessary enable it with technology, and ensure the inter dependencies that exist between the new solution and the entire value chain are not compromised.
Why Map Supply Chain Processes and Systems?As supply chain management technologies mature into mainstream acceptance, they are extended or replaced by the newest applications fueled by business necessity and technological innovation. The pace at which new “solutions” are introduced far exceeds that in which mature “solutions” are retired. Thus, supply chain managers in search of tools to support operations have an ever increasing number of technologies on the active market from which to choose.The lack of holistic picture of where and how these technologies fit into the overall Supply Chain process prompted us to design an integrated map that coherently illustrates available technology and the process each supports. The map strives to demonstrate the touch-points that exist between critical supply chain processes in a cross-functional organization.Before reviewing the map in detail it is important to stress that we approach its creation from the perspective that Business comes first. Proven management concepts are the foundation upon which this representation has been built. Therefore, our vision was to create a map that considers a supply chain in its desired state:- Functions are aligned strategically and are part of the Supply Chain which is engineered to deliver enterprise goals.- Product life cycle management occurs through the concurrent and cross functional design of products and in order to minimize, cost, time-to-market, rework, and delays.-เป็นการเชื่อมต่อโดยตรงและทิศทางระหว่างระดับกลยุทธ์และการดำเนินการภายในห่วงโซ่- (เทคโนโลยีสารสนเทศ) ใช้เป็นการสตัวเปิดใช้งานของกระบวนการซัพพลายเชน โดยการสร้าง "ห้องอิเล็กทรอนิกส์" ระหว่างกลุ่มทำงานและสมาชิกทำงานขนของแผนซัพพลายเชนเป็นเมตริกซ์ของพื้นที่การจัดตำแหน่งแนวตั้ง (อุปสงค์อุปทาน ผลิตภัณฑ์ ), และกระบวนการทำ งานข้าม (หรือแนวนอน) เช่นออกแบบผลิตภัณฑ์หรือการคาดการณ์ความต้องการ แผนที่มีไว้สำหรับใช้เป็นเครื่องมืออ้างอิงในระหว่างการตรวจสอบเชิงกลยุทธ์หรือขั้นตอนการออกแบบสถาปัตยกรรมห่วงโซ่อุปทานแผนที่นี้ได้จากคำนิยามในวิวัฒนาการที่คงเนื่องจากลักษณะที่ปรากฏของรูปแบบธุรกิจใหม่ กระบวนการ และเทคโนโลยีเราไม่แนะนำ หรือจะอ่านเห็นระบุว่า ทุก ๆ กระบวนการห่วงโซ่อุปทานหรือเทคโนโลยีภายในแผนที่ เราขอแนะนำแผนที่แสดงให้เห็นถึงกระบวนการหลักที่หนึ่งต้องพิจารณาเมื่อประเมินการออกแบบของห่วงโซ่อุปทาน เราเสนอแผนผังนี้เป็นกรอบอ้างอิงสำหรับมืออาชีพที่เกี่ยวข้องกับการวิเคราะห์ห่วงโซ่อุปทานแนวคิดของการบูรณาการซัพพลายเชนวัตถุประสงค์ของบริษัทคือ ลูกค้า ผลิตภัณฑ์ และบริการที่พวกเขาต้องการ เมื่อพวกเขาต้องการ ที่กำไร กระบวนการทั้งหมดทางธุรกิจภายในองค์กรต้องมีวัตถุประสงค์เหล่านี้เป็นวัตถุประสงค์พื้นฐานของการ กระบวนการทั้งหมดในองค์กรต้องมุ่งเน้นทั้งทางตรง หรือทางอ้อมในเป้าหมายนี้The need to meet customer demand in an efficient (profitable) manner has resulted in the build out real time operations, or if you prefer, Demand Driven Networks. DDN’s respond to a demand signal then propagate this signal all the way through a network of suppliers and partners. Business models that increasingly rely on real time operations to satisfy customer demand require highly integrated tools and processes at both the execution and strategic levels within the operation.Let’s keep in mind the market forces that continue to drive, and justify, the significant investment in supply chain integration:- Globalization expands the geographical span of operations which makes systems and process integration a significant competitive advantage- Global competition necessitates the acceleration of product cycles, reduction of design-to-market times.- Perpetual innovation reduces products-lifetimes.- Customer demand and competitive pressures requires companies to have product and services available when and where needed.Thus, the rapid development of demand-driven models.- Cost pressure is constant.- Pressure to keep inventory levels at optimum level due to cost (mostly carrying and obsolescence costs) is a major constraint.- Customers take high product quality and service levels for granted.Because a company must often react to these market pressures with short term process and technology fixes, IT Information Systems infrastructures increasingly become patchworks of applications and technologies. This process is compounded by the comparatively slow evolutionary nature of enterprise resource planning systems (ERP).ERP systems are the backbone of a business’ information systems. These systems typically provide foundational business process support for financial, procurement, inventory, and human resource needs. Third party products are often leveraged, due to time to market advantages and niche expertise, to provide the most advanced capabilities and typically integrate with the ERP to complete the system.Supply Chain solutions are an excellent example of this infrastructure phenomenon.Demands on the supply chain are constantly evolving, requiring organizations to manage more things.This demand is frequently satisfied by niche players with deep expertise in the particular functional area. Because niche players are frequently faster to market than the ERP OEM’s, they often gain significant market strength in their area of expertise.These solutions gain success as niche modules that “plug” (integrate) into the ERP system. As these applications grow and mature, they become mainstream. The industry trend shows that the ERP providers tend to extend their packaged solutions through acquisition/absorption of the niche players. These include applications such as APS (Advanced Planning Systems), e-Commerce suites, Business Intelligence, Warehouse and Transportation Management, Customer Relationship Management and more recently Contract Management, Risk Management, Compliance Management, and Point of Sales solutions.By the time this process fully evolves the patchwork of solutions described earlier is quite vibrant. One must consider the significant competitive disadvantage that waiting for the mainstreaming or OEM absorption of third party solutions could create.Although we agree that fully integrated packages from a single source are almost always advantageous, rarely do companies have that luxury. Market pressures require that businesses respond.Our conclusion: don’t worry about the perfect technology solution but rather; fix the process, when necessary enable it with technology, and ensure the inter dependencies that exist between the new solution and the entire value chain are not compromised.
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