Sean Riley, writing in Supply Chain Management Review, points out that “throughout 2012” companies continued to grow in their realization “that a highly visible supply chain is necessary for success in today’s business climate.” Imagine that!
Many of us have been writing for some years that “high visibility” (what Sean Riley really meant) supply chains—supply chains providing end-to-end (or nearly so) demand visibility to its participants—are increasingly essential to accomplishing all of the other “hot topic” goals in supply chain management including:
- Improved customer service levels
- Improved supply chain execution
- Reduced inventories
- Reduced levels of risk
- Increase supply chain agility
- Reduced recovery times
I’m sorry. Did I say “essential”? I meant to say, “ESSENTIAL!”
I am confident that if executives and managers spent more money on increasing supply chain visibility, they would achieve all or most of the above—improving customer service levels while reducing both inventories and risk at the same time.
What’s keeping them from doing so?
For many small to mid-sized business enterprises, one of the key factors keeping executives from moving toward participation in supply chain end-to-end visibility efforts is the lack of a toolset that is priced within their reach (or, at least, within their comfort zone).
They are also frequently hampered by not having the in-house information technology (IT) skills that might help them utilize “data visibility” and integration tools. This means, of course, that they need to find, retain and trust (the latter being a critical factor) those skills brought to them by resellers or consultants coming to them from outside their organization.
Another factor at work in many such firms is a generalized fear about sharing too much information outside the span of their direct control. There remains considerable fear of being “ripped-off” by someone who may be plying the supply chain networks and may steal customers or vendors or both.
And, of course, some managers and executives are just reluctant to involve themselves in relationships that are outside their span of control. Collaboration is fearful territory to some executives who want to be able to “control” everything and think “collaboration,” “influence,” “negotiation,” and similar terms are factors that automatically increase “risk” rather than being contributors to reducing it.
Moving down-market
There are millions of small to mid-sized business enterprises in the United States—companies that hire fewer than 250 employees (many fewer than 100)—who would make great additions to integrated and collaborative supply chains. That is why I think firms that offer a blend of technologies and services (including hand-holding, advocacy and coaching) to these smaller firms can and will make great money in the very near future.
Remember! The key word is “ESSENTIAL.”
Our world’s economy is not getting healthy fast and, if the ongoing troubles in both Europe and the U.S. are any indicator, we still have plenty of challenging times ahead of us. If these millions of smaller firms are going to find success—if they are going to not just survive, but thrive—in the days ahead, it will become more and more apparent that supply chain integration and visibility is no longer a “nice to have.”
The supply chain technology firms that go to market with product-service combinations that can help relieve the supply chain participation anxiety of executives and managers in these millions of small companies will, themselves, find great success. I am certain of it.
