Supply Chain Management (SCM) has dramatically changed over the last few years. With companies that have overseas manufacturing vendors working harder than ever to improve product quality, reduce costs, and simplify processes, the concept of report once and manage anywhere is quickly becoming the standard for best-in-class SCM-driven organizations. Thus, we have compiled a list of Six of the Top Supply Chain Management Trends of 2016.
There are a number of benefits surrounding the move to cloud-based supply chain management. Most of them center around reducing costs (if you’re using SAP or Oracle, you know SCM can be extremely costly), efficiency (apply same methodologies, processes and tools across different vendors), and scalability (whether you’re working with 5 or 500 factories, being able to manage quality and cost is critical).
#1. The Internet of Things.
Often overlooked in all of the consumer hype around the Internet of Things (IoT), are mobile and tablet devices. These tools have quickly become mainstays for the remote workforce, and are rapidly evolving to support supply chain management functions.
For example, Pivot88’s cloud-based inspection tools open up transparency of the inspection process at all stages, and is driven by powerful apps on the ground level at supply chain vendors.
Providing your vendors with standardized inspection tools means that you will then be able to move away from traditional forms of data, which leads to…
#2. …Digitization of Data.
Many companies are still struggling with paper trails – literally. Different vendors handle inspection processes manually and in their own unique way. As SCM-based organizations drive for more efficiency and standardization, the implementation of cloud-based supply chain management tools is not just the next logical step, but a critical component in competing in the global market.
Moving from manual (or even hand-written) information and data to a centralized and secure cloud-based solution minimizes costs, eliminates inconsistencies, and standardizes the data formatting, which then opens up the capabilities of Big Data.
#3. Shift to Big (but Usable) Data.
With the ability to quickly and easily standardize the collection of supply chain data from vendors, operations and logistics pros will now have access to “bigger” and more data than ever before, allowing them to better optimize operations.
This data, when properly analyzed, can help organizations identify trends (like quality issues with a particular supplier), leading to developing solutions for quality related problems sooner in the supply chain.
For example, one client was incurring substantial cost when China-based factories were shipping cherry-picked product proofs, and then following up with substantially sub-par final product. The client was on the hook, having already paid for the shipment.
Leveraging a Cloud-based supply chain management solution provided them insight into trends that enabled them to identify product quality issues sooner—before paying—reducing cost, and ultimately improving quality. This was critical as their business focus was expanding to a global market.
#4. SCM Organizations Will Begin to Adopt Application Convergence Strategy.
One of Gartner’s top predictions for global logistics organizations in 2015 included the forecast that “20 percent of SCM organizations will adopt a supply chain execution convergence application strategy”. Since many organizations already have some sort of supply chain management solution, but aren’t fully leveraging due to cost, time or other resource constraints, businesses will look for efficient ways to tie these systems together, while maximizing utility.
One way companies can do this is to layer on top of their existing robust supply chain systems with a light weight cloud-based solution. Easy to customize reports, secure data integration, and on- and off-line inspection capabilities can begin the process of converging applications and moving away from siloed solutions.
#5. Risk Management Comes to the Forefront.
Supply chain risks come in a variety of forms. From counterfeit products, product integrity, and quality, supply chain stakeholders are constantly faced with a barrage of SC failure points. Ultimately the focus of risk management is on making sure that supply chain continuity is maintained in the event of some unforeseen interruption.
Working with remote vendors can make this a challenge. Lack of insight, reporting and analytics can hamper a supply chain risk management (SCRM) team’s ability to plan or react quickly enough. In 2016, expect this to get center stage, also according to Gartner.
#6. Operations Planning and Inventory Optimization Go Under the Microscope.
Going hand-in-hand with SCRM, is looking at what aspects of the supply chain are optimal for cloud-based solutions. While the data has proven the security of the cloud—there are still substantial concerns about the security of data there.
In an article on forbes.com that focuses on Lessons Learned from SCM World, Louis Columbus, a columnist who covers CRM, Cloud Computing, ERP and Enterprise software highlights a number of supply chain strategies that “have the greatest potential to deliver the network effect throughout the supply chain”.
Two key areas of concern for SCM organizations include Sales and Operations Planning and Inventory Optimization. Both of these cite mid- to high-level in contributions of the network effect versus the potential sensitivity in data sharing. In performing inspections for quality control, we believe that that level of data falls directly within the sensitive limits, but should be protected at a high level.
The article then goes on to lament that most cloud-computing adoption heavily relies on legacy ERP systems. We disagree. We believe that by laying our cloud-based solution on top of existing legacy systems, rapid integration, improved quality and reduced cost can be achieved in weeks—instead of years. And at tens of thousands of dollars, instead of hundreds of thousands—or even millions.
Interested in learning how you can leverage the Top Supply Chain Management Trends of 2016 and start reducing cost, improving product quality, and making your customers happier today? Download our Case Study on Reducing the high cost of quality for a North American manufacturer with both domestic and overseas suppliers.
For more information on how Pivot88 can help you reduce cost and improve quality with your supply chain vendors, request a no-obligation demo today.