As the trend for global outsourcing and supply chain management increases, the greater the opportunity for the IT industry and logistics professionals to add value, support and strengthen international supply chains. Central to the success of such solutions is the increasing role of integrated information technology and teams to establish robust and cost efficient end-to-end systems.
As all of us become increasingly dependent on global IT systems we require integrated solutions not just on an international scale, but also at national and local level. How do you approach the standardisation of systems, reduce costs and increase efficiencies?
It is important to start with a single, common technology strategy, which incorporates supply chain requirements around value creation, scalability and robustness. This helps to reach a standard global framework within which all parts of the organisation can operate.
Drive a common strategy
Develop and manage this IT framework with a structured global network made up of central and regional experts, and supported by key stakeholders who are responsible for the delivery of IT products to the business. The aim of this framework is to drive the common strategy across regions and divisions of the business – defining market opportunities, developing new solutions, providing support and agreeing policies in all areas, including supply chain event management, materials management and transport management. Value and efficiencies are automatically created by an integrated IT network as decisions and developments are made by the core team rather than on a case-by-case or ad hoc basis.
Any IT strategy must mirror the corporate business strategy in terms of growth, development and core efficiencies. The global IT network should identify and define new, integrated solutions and services that support the business objectives and the growth of that business.
Using available knowledge within the company to form the global network is key to leveraging the expertise and solutions you have in place and identifying what you need to add. There will already exist within your organisation a plethora of IT skills, capabilities and knowledge of tools and products: capture and disseminate this knowledge throughout your global IT network.
Effective supply chain management at all levels requires a portfolio of products and services that support all events in the supply chain and specific industry requirements. Standardising and rationalising the number of IT products is essential because it ultimately reduces support and running costs, and increases value.
A prescribed IT product portfolio with defined characteristics, including recognised features and benefits is key. To be an effective toolkit it must have: easy to understand descriptions, particularly around the product’s scope of use; costs for each IT product or service clearly explained; clearly defined levels of service performance and support; a rationale for the costs of each service; and a clear demonstration of value added for each product.
IT products work collaboratively to drive warehouses, plan transport operations and provide detailed, accurate, timely supply chain information, which together support automated decision making and error-free data sharing. To the supply chain manager, a solid portfolio of products is a key component of his or her ability to re-engineer and create relevant logistics services and therefore is an important creator of value within an organisation.
For multinational IT solutions deployed over a number of sites products must be capable of meeting global needs – such as: multi-customer, multi-language, multi-region, and local fiscal reporting. Products that can scale to high volumes and be supported globally are a pre-requisite to securing round-the-clock totally supported supply chains. The ability to roll-out these products consistently to the same model, independent of geography, significantly increases quality and reduces risk.
A common strategy should also allow ‘managed innovation’ in both products and services. The highest risks in IT product development are in the early stages of the life cycle. Enabling successful and innovative IT products to be rapidly rolled out across geographies and sectors will reduce innovation costs, risks and customer service crises.
All in all, a global toolkit of IT teams, strategies and preferred products minimises the need to be reactive in crises, will build a core set of knowledge around specific products, and enable the IT community to have better management over costs.
By setting out this policy clearly, it will ensure the entire organisation has a consistent approach and reduce errors associated with rapidly installed local solutions.
Global standardisation impacts heavily on interaction with our IT partners. Select long-term partners at a global, national and local level and work with them to identify gaps in their offering, therefore co-ordinating with them on an agreed roadmap for future developments. Selection and evaluation processes should be based on a standard, robust partner account management process that covers all aspects of the relationship, including functional and non-functional areas.
Strive to develop partnerships with global coverage. To be able to take partners into new countries enables sharing of new entry costs, so ensuring that new and current partners have developed or are developing multi-sector capability.
Barriers to a common IT strategy
And the barriers to a common IT strategy? The main barriers to deploying a common IT strategy can be seen as: The technical and commercial challenge of meeting all division and all geographical requirements within a limited number of IT products and the management framework and discipline required to ensure that the key communities work effectively together.
These barriers can be overcome firstly by encouraging the business to share IT knowledge so that key stakeholders become directly involved in the strategy and then by ensuring support and ownership from senior management throughout the organisation.
To ensure consistency of IT services and promote the sharing of best practice around the product portfolio, prepare to deliver a global training and communications programme. Focused on all areas of the business, its prime aim should be to ensure that everyone understands the rationale around the IT portfolio and its global application. Include IT partners in the training strategy; use their own knowledge base to enhance key internal messages.
Above all, work with regional teams to agree product training programmes appropriate to their respective geographies. Work with the business development, sales and IT teams to ensure that external customers are presented with the most appropriate IT product to meet their own specific requirements.
Knowledge of IT products should not be restricted to the IT function. To extract value from technology detailed understanding of functionality, processes, service and value has to be owned by business development and operations.
Focusing on marketing a limited number of products enables the development of effective value propositions and operational case studies across regions and divisions. Partnering with IT vendors provides the means to leverage their marketing as well as product development investments.
Systems integration is the tool that binds everything together and therefore a global application that offers robustness, scalability and flexibility is paramount.
Pre-configured interfaces, working to globally recognised standards facilitate fast, reliable and efficient data transfer, whilst at the same time allows easier customer take-on. Their importance should not be underestimated. Martin Neil is director of Supply Chain Solutions at Exel martin.neil@exel.com
Key benefits
Global co-ordination and standardisation of IT products and services for the supply chain creates value benefits for organisations through:
- Global consistency and visibility
- Economies of scale
- Reuse of interfaces
- Reduced implementation time
- Building the organisation’s core skills and knowledge
- Reducing surprises
- Guaranteed availability
- Clear product options and cost transparencies
- Inter-regional compatibility
The benefits of a cohesive approach to IT in the supply chain will be achieved by:
- Providing a clear framework for the IT team
- Agreeing and rationalising a preferred solution provider
- Ensuring strategy is cost effective
- Standardisation of the process and services
