Where’s the Next Revolution in Supply Chain Management Coming From?
The concept of the supply chain as something separate was the first revolution. Optimization tools based on constraint were developed for the supply chain to support this new order of ideas. While this was underway, Six Sigma and Lean approaches to improving capabilities were being rolled out in the factory and other departments within organizations, and also throughout the supplier and 3PL network.
Eventually, leaders began to realize that technology alone was not enough. The most important process supply chain management came to be recognized as operation and sales planning. This is now under the conditions of a second revolution and people are talking about integrated business planning (IBP), which is derived from operation and sales planning, but is more closely integrated with the finance department. In a smaller part of this the importance of demand driven supply chains is recognized, and this is underpinned by the idea that forecasts based on historical shipping reports is insufficient and having visibility into demand which occurs at the point of sale is the true way to improve the management of demand.
Over the last number of years, the topic of managing risk in the supply chain has reared its head and, with this, newer ideas and processes have become codified and developed into working practice. One of the emergent topics is sustainability of the supply chain. In a lot of social responsibility reports for corporations the topics of the sustainability and risk exposure of the supply chain are addressed.
While these previous revolutions may seem to some as yet incomplete, there may be a new one emerging. This one has basis in the new generation of supply chain control towers. Here are the key factors in this:
• The enhanced risk management capabilities now available to the control tower
• Faster corrective capabilities that can rebalance supply and demand and deliver profitability in a very short time
Technology will also be a factor, here’s how:
• Granular track & trace will be based on cloud technology and built using regular network data
• The newer generation of ultra powerful supply chain apps
• Newer and more efficient ways to handle BIG Data, including analytics in real time and better technology for data visualization