04 December 2008

Viewpoint : Guest Columnists

Embracing complexity

Published:: 01 February 2008
Article Type:: Viewpoint
Byline:: John Sookias

Supply chain professionals have never been strangers to complexity. Quite the opposite. It has always been our role to help organisations overcome the complex challenge of efficiently matching supply with demand. But in today's market, global trends are pushing levels of complexity to new heights. The good news is that thanks to IT advances, the agility that is so critical to business success is more attainable than ever.

With the removal of trade and transport barriers, the opening of new markets in Asia and Eastern Europe and rapid advances in computer power, business is going global at a faster pace than ever.

Fresh challenges arise as businesses expand their sales and manufacturing efforts to new markets including longer lead times, new distribution strategies such as direct delivery, cross-docking and transport consolidation, and increased pressure to keep inventory to a minimum.

Increasing customer requirements for superior service levels and product customisation further add to the complexity. What's more, new pressures are being placed on companies to evaluate their manufacturing and distribution models in light of their environmental impact.

Today, these changes are mainly driven by market leaders looking to position themselves as green. But as companies' environmental responsibilities are increasingly legislated by governments, taxation and tariffs will ultimately affect both profit and reputation, if not managed correctly. Far-sighted companies are already analysing ways to restructure their global supply chains to minimise transportation.

One thing is for sure, change is happening so rapidly and in so many dimensions that the capability of many corporations to execute their core functions is at risk. Why? The ability to adapt supporting IT infrastructure and business processes is simply not evolving at the same pace. In fact, the capabilities of supply chain systems and processes are being stretched to their limits.

Within these challenges lies a world of opportunity for supply chain professionals. Our businesses will be looking to us to provide guidance. Technology will make the difference as organisations build flexibility and speed into their supply chains. Those of us who can leverage next generation IT to make our operations agile and dynamic can prove that a well-run supply chain is one of the most powerful and effective differentiators a business can have.

For many firms, an big obstacle to achieving the agility required to manage a changing environment is the disparate mix of IT systems and business processes they have. But the single system approach proposed by large enterprise software vendors is simply not possible for a dynamic and acquisitive company, nor does it make fiscal sense.

As supply chain practitioners, it is our responsibility to embrace complexity by making it easy to manage. The first step is to look for simple IT solutions that bring together and optimise complex processes by leveraging existing technology investments. We must steer our organisations away from heavy IT implementation projects and towards flexibility that can be achieved in a short space of time. Only then can we gain the agility needed to cope with the supply chain complexities facing us today and the unforeseen challenges of tomorrow.

John Sookias is a director at Syncron

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