The Seven Grand Challenges for Supply Chain Management
Sourcing Innovation recently issued a challenge among our blogsphere community of supply chain management bloggers to offer some thoughts on the seven grand challenges for supply chain management for the next ten to twenty years. The notion of seven challenges has been inspired from a recent Gartner research paper that outlines The Seven Great Challenges for IT. Personally, I can only deal with the most, a five year time horizon, so my contributions in this challenge will be narrowed to this timeframe.
Here are my seven grand challenges for supply chain management over the next five years:
Challenge One- Ubiquity of Portable Computing Leading to Real-Time Sensory Networks
Challenge Two- True Supply Chain Business Intelligence and Decision Making Tools
Challenge Three- Managing the Explosion of Data and Information Needs Involved in Global Based Value Chains
Challenge Four – Managing Supply Chain Risk Management on a Global Basis
Challenge Five- Who Assumes Ownership for the Extended Supply Chain?
Challenge Six- Articulating the Value and Consequences of Supply Chain Directly to the C-Suite
Challenge Seven- A Global Shortage of Talent and Skills in Supply Chain Management
In this part one post, I will outline my view of the first three challenges.
Challenge One- Ubiquity of Portable Computing Leading to Real-Time Sensory Networks
Following the order of Gartner’s IT Challenges, I can completely concur with the Gartner prediction that we will continue to be surrounded by portable communication and computing devices. This ubiquity of portable computing and communications will no doubt have a profound effect on how companies manage their future supply and value-chain networks. The poster child technology for this concept was RFID technology, but the hype of this particular technology within supply chains came well before solid internal as well as external related business cases could be identified, as well as way beyond the two-way justification of supplier mandates such as Wal-Mart and others.
In September of 2005 I authored an opinion column for RFID Update (Broadening Context for RFID Investment) where I challenged readers to view the end goal not as RFID alone, but as the deployment of appropriate sensory networks. A sensory network bridges the physical and digital aspects of a particular process. The widespread ubiquity of more cost-affordable portable technologies over the next five to ten years will no doubt provide broader deployment opportunities where any physical sensing of where any item or any asset resides in the value-chain can trigger a series of decision support applications that flag an alert or automatically trigger required action. It has been three years since my initial editorial, and the overall economics of the technology are just beginning to turn positive of certain business cases of wider sensory networks. I remain convinced that sensory networks will have a profound impact on how manufacturers and consumers directly interact with supply and value chains, and there lies the first grand challenge for our community.
Challenge Two- True Supply Chain Business Intelligence and Decision Making Tools
If the IT community can overcome the challenge of efficiently tying together parallel programming and natural computing, than I believe this will open up even more possibilities for applying broader, and more real-time aspects of supply chain analytics and business intelligence.
Today, our community can leverage software applications that can analyze procurement or transportation spend management, product lifecycle performance, multi-echelon inventory optimization, and service lifecycle management. Think for a moment of the broader possibilities when real-time information related to what’s actually occurring, or about to occur based on previous events, can be applied to more timely and informed decision-making. Expand your vision to the possibilities of bringing all of this information together, allowing an interaction and queery of each of the decision-related dimensions of the total value-chain.
The future ability of information technology to allow computers and supporting applications to interact with one another opens the door for those visions of sense and respond that many technology providers often aspire to. What if you had the capability to assess in real-time, what the state or conditions currently exist across the entire supply chain, what risks or imbalances that need to be addressed, and what may be expected to occur based on human judgment and probability?
Our grand challenge must therefore be finding ways to leverage real-time and other business intelligence information needs in a much more affordable and broader manner.
Challenge Three- Managing the Explosion of Data and Information Needs Involved in Global Based Value Chains
Gartner and other IT Advisory firms often cite the current explosion of data and information needs in running today’s businesses. I read a recent commentary from Bruce Richardson of AMR Research, who while attending a visit to the offices of Siemens Business Services UGS group, noticed a chart on the wall showing the growth of just product data for a composite of several consumer electronic companies. Data needs had exploded from 1.8 terabytes in 2002, to over 296 terabytes in 2008, a more than ten times increase. In my travels, I have observed the same realities in storing various demand, procurement spend, manufacturing control and other supply chain related information needs.
So while the cheaper economics of the storing of data have facilitated this explosion of data, the challenge now lies in managing and accessing all of this data. The challenge is now the ability to rapidly identify, locate and present information in entirely new ways, beyond transactional and structured data, involving all sorts of data. Already we are beginning to see the initial first signs of business intelligence and search vendors starting to converge and position themselves to address broader, more complex supply chain information needs. Just look at the messaging of vendors such as Business One, One Network, and Teradata, contrasted to Endeca, FAST, Ono, and others in the search and retrieval field.
We can’t address this challenge without also including the challenge of continuing to maintain the accuracy of this data on a day-to-day basis, as well as the ability to have a more efficient means of overall governance of master data. As both practitioners and consultants, we have come a long way in identifying the need to move beyond the concept of storing data, to that of storing information. The third great challenge for supply chain professionals is therefore the ability to more efficiently maintain, manage, leverage and integrate the vast amounts of product, demand, supply, manufacturing, and customer service related information.
Bob Ferrari
Tags: Bob Ferrari, Future Challenges in Supply Chain Management, Supply Chain Matters
