For the past 30 years, modernized technology has been applied to make supply chains increasingly more efficient. And, as with most things, supply chains and technology share one constant—change. Throughout this constantly changing landscape, most Original Equipment Manufacturers (OEM) continue to focus on new technologies that can help take their supply chains to the next level.
As the first in our OEM supply chain series, we will examine four fundamental technology trends that will help evolve supply chains to unprecedented effectiveness and efficiencies. The four trends are:
- Movement towards [even more] standardized, packaged [ERP] applications
- Supply chains are being replaced with “Ops Grids”
- The new 80/20 rule—automation of 80% of transactions with manager involvement focused on 20% (i.e., exceptions only)
- Collaborative applications replacing transaction exchange between trading partners
Movement towards [even more] standardized, packaged applications
Most companies have at least one packaged ERP systems installed. However, very few companies have held true to the model of “one core platform” and “no modifications” in order to reap significant reductions in long-term cost of ownership. As such, current trends are finally showing movement towards simpler platforms, with fewer customizations and fewer bolt-ons, and ensuring that support and maintenance work is shifted to the application software providers for further cost savings.
Supply Chains are being replaced with “Ops Grids”
As with our automobiles, healthcare and many other areas of our lives, complexity is growing each year. Supply Chains are no different: they are no longer linear, nor comprised of straight-forward supply relationships. Increasingly, modern supply chains are comprised of many nodes on a grid which supply chain managers must attempt to direct, control and optimize.
The new 80/20 rule—automation of 80% of transactions with manager involvement focused on 20%
Just as companies for years have been looking to shift labor-intensive work and processes to low-cost markets, increasing application sophistication and computing power means that application systems are automating less complex transactions, allowing OEM supply chain managers to focus only on the exceptions.
Collaborative applications replacing transaction exchange between trading partners
Although OEMs across many industries have focused for years on increasing their collaborative planning with trading partners, most of their applications tracking demand (orders) have continued to be predominately transaction driven.
Network security sophistication, along with increasingly standardized applications, is allowing traditional transaction exchange (e.g., EDI) between trading partners to give way to much higher levels of transactional collaboration.
These are just a few of the many exciting trends we are seeing that allow OEMs to increase both the effectiveness and efficiency of their supply chains. Look for future installments of this series as we continue to explore how traditional OEM supply chains are evolving into globally, complex and dynamic endeavors.
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