SURVEY - SUPPLY CHAIN MANAGEMENT - LEARNING TO CROSS OLD BOUNDARIES
Andrew Gillingham

04/12/2000
Business Day (South Africa)
22
Copyright (C) 2000 Times Media Ltd.; Source: World Reporter (TM)

TO exploit the opportunity offered by business-to-business e-commerce, companies need to realise that the new value chain is not a chain, it is a network of relationships and alliances.

Dave Cohn, associate partner at Andersen Consulting, says the key to a successfully synchronised supply chain will be the sharing of information among all shareholders.

Organisations that successfully implement a synchronised supply chain will not only have developed an exceptional level of collaboration within their own organisation, but will also have developed the same level of collaboration with other organisations.

Cohn says companies will need to cross old boundaries and learn to plan collaboratively with partners, avoiding less than optimal performance of the individual parts within the chain.

A purely internal focus by any link within the chain will lead to failure.

Sophisticated web-based technologies are now available that will enable and facilitate massive increases in internal and external information sharing.

Companies whose corporate management understand the new technology and its implications will lead the way in the formation of truly synchronised supply chains.

Combining technology and processes will enable companies to work more efficiently. Linked partners will be able to share forecasts and actual information interactively off a common information base, thus being able to adjust business processes quicker and more reliably than before.

Cohn says there are five steps to a synchronised supply chain:

Absolute operational excellence a combination of absolute operational excellence and continual performance improvement;

The web-based breakthrough involving the implementation on the web on what has already been developed in achieving operational excellence.

New relationships when organisations all subscribe to the same standards, companies will come together for one-off or short-term projects as expediency dictates;

Managing complexity in real time this provides a range of sophisticated tools and processes to enable operations to be integrated and to respond globally in real time;

Optimising around the unexpected management which has always planned around the expected and then dealt with the unexpected, will find that it is the expected that becomes the rarity.

This new business model in the electronic economy allows buyers to be sellers and customers to be suppliers. We will operate in a network of alliances and partnerships where each party interacts with all others in the value chain to create increased value, Cohn says.

Information will flow more freely throughout the entire chain, reducing the costs of doing business and resulting in better value for all, he says.