1959-data-processing

Supply Chains Have to Walk Before They Run

Posted in Trends & Technologies and tagged , , , , , , .

Data processing, 1959. Image by James Vaughan, CC license

If you search “technologies for supply chain evolution” you will get 17.8 million results, many of which will mention IoT, robots, driverless vehicles, mobile technology, predictive analytics, network optimization software, and 3-D printing.

The presumption is that industry will want these solutions because of the coming added complexity and demands of the modern supply chain in the digital age.

But most supply chains still confront very basic problems and inefficiencies; they haven’t in many cases even fully deployed yesterday’s technology, so delivering product with drones doesn’t make the priority list.

So which technologies are key to the supply chain of the future? The same ones that were introduced 15 years ago that companies still haven’t adopted! This is unfortunate, because many of these technologies were designed to automate the supply chain office, and without automating the supply chain office, all of that promising talent you are committed to developing is typing away at tedium.

Just visit your customer service department, where very smart and capable humans – some with $120,000 college degrees — are reading data from pieces of paper and entering them into systems, an act which, according to supply chain technology gurus, should have disappeared years ago with the introduction of EDI, integrated systems, and OCR.

Supply chain managers are managing minutiae, not the supply chain.

Where does the minutiae come from? From the 18,000 to 30,000 phone calls or emails and the 120,000 to 350,000 manual interventions a typical ($2 billion +) company must make just to ensure proper system processing of its order-to-cash flow. And this is with all the normal ERP and associated technologies, such as EDI, that a company of that size normally uses.

Companies still have teams of people shuttling information and data all over the supply chain office, and because they are busy shuttling information they don’t have time to look at it to make sense of it and use it to improve your business.

Automating the supply chain office is one of the cheaper technology moves you could make. The EDI and OCR of the 1980s has gotten better and easier to deploy, and when strung together with complimenting technologies, can automate nearly all of your order processing, exceptions management, invoice discrepancies and customer claims work.

Automation also has the enormous benefit of – by definition – digitizing every piece of data from every transaction. If all of your shipping and invoice claims are scanned, stored, and sent to transactional systems for disposition, all that data is available to study for patterns, relationships, and other insights that can mean immediate savings. Like getting a view of the forest.

Want to evolve? Make the supply chain office run itself. For a $2 billion company selling to major retail outlets in the US, this means zero human intervention for every one of 60,000 deliveries a company of that size is likely to make. Most business rules are simple to automate: if X order received, send to Y location and reply Z back to customer.

A truly evolved supply chain office is one where all human assets are users of data, not movers of data, creators of opportunity based on a view of the forest, and customer relationship builders.

 

 

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