Achieving supply chain maturity

Konzept, Strichmännchen, Sprechblasen, Ja, Nein, englishAre your business goals aligned with your technology priorities? A Gartner survey of 2053 CIOs has revealed significant differences in the priorities of CEOs and CIOs. While CEOs are prioritizing business growth, CIOs are focusing on business intelligence.

In a review of the survey, CIO Insight made the following observation: ‘Theoretically, analytics and business intelligence would help drive overall business growth.’ To which I’d have to add, ‘Practically speaking, business growth often requires much more than that.’

In my previous post, I referred to the way supply chain planning and optimization (SCP&O) sits on top of ERP systems to enable optimized supply chain decisions. What I didn’t mention was another highly significant consequence of SCP&O: the way  it enables new revenue streams. Manufacturers are able to attract customers who require shorter lead times. Express delivery companies discover they can offer customers narrower delivery windows. Service providers find they can give customers the luxury of selecting their preferred time slots and changing them quickly.

The possibilities really are endless.

At the Gartner Supply Chain Executive Conference in London recently, I was struck by the similarities between Gartner’s five-stage supply chain maturity model and the path our customers take.

The first stage of an SCP&O implementation is about achieving significant improvements in efficiency, productivity and the ability to recover swiftly from disruptions. Here the focus is on improving KPIs such as delivery performance and inventory.

The next stage, however, is about value creation. Once you have an SCP&O platform in place, how can you create new products and services? How can you grow your business?

An example from our customers in the express delivery industry may help. When we first start working with them, their focus is on improving their operations. They want to optimize routes and line haul operations, and improve workforce planning at depots.

Once all the elements of their supply chain are connected by an SCP&O platform, they begin asking themselves what this means for their business. In the case of express delivery companies, it means they can start offering their customers a whole range of service levels. What’s more, these differentiated service levels can be introduced quickly and inexpensively. With a flexible, intelligent SCP&O platform in place, time to market can be measured in weeks rather than months or years.

The shift from supply-centric to customer-centric operations was evident in a presentation at Gartner by one of DELMIA Quintiq’s long-time customers, Ruukki. A series of DELMIA Quintiq implementations at Ruukki plants has enabled the Finnish supplier of steel solutions to collaborate closely with customers and satisfy their requirements. This has created a real competitive advantage, enabling Ruukki to maintain a loyal customer base and grow their market share.

Business growth has always been an imperative. Today, supply chain planning and optimization is enabling the creation of new products and services that make significant growth possible.

What is integrated business planning?
Creating a profitable postal service