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Telescope: SCM is ERP's stepchild?

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CIOL Bureau
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MUMBAI, INDIA: Supply Chain is an octopus that can really change the game, if you can read it right. And yet there are dents of hesistance before or serious leaks after automating the chain and painting those widespread pipes with technology.

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Some cogs just don’t fit in the wheel, be it complexity of chains, size and visibility gaps that SCM suites grapple with, watershed conk-outs like Apple, SCM talent issues or lack of vendor enthusiasm to building up real edge.

Many questions, one pitstop — Gartner’s VP, Research - Supply Chain - Marcus Blosch; who was in India this week and with him, we got a chance to follow the ants’ trail better. Because when it comes to insight, he is never out-of-stock. Plug-in.

Supply Chain Automation is supposed to be no-brainer. Then why some U-Turns? From SCM Goof-ups like Apple iPhone 3G outage, or that of Nintendo’s Wii to the very basic issue that technology is still not able to supply ways to bolt the sheer complexity, visibility needs, size and global spread of a company’s supply chain. Are these issues big enough?

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There’s no doubt that technology has provided this space with a lot more than what was possible earlier. Like segmentation, optimization, end-to-end collaboration and more. Yet, technology can only take you so far. Vendors have done a good job in many places, but that’s only part of the solution. The organisation piece is where things would need change. I mean decision-making models, acting on information, what-if scenarios etc. Tools can’t get you from one point to another. You can not rely on vendors for everything.

So, a company needs to fix the process part first and then think of systems?

Yes, very much. One needs to define questions like — what are my operational goals? How do I make SCM a strategic weapon? How to have a holistic perspective?

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Coming back to the vendors’ side, would you agree with the argument that often SCM is a distant sibling to ERP suite, which is often the blue-eyed boy of a vendor. Single-vendor set-ups allow SCM to easily swish in with an ERP deal but it is treated in a step-motherly fashion by the vendor when you think of upgrading functionality or building up the portfolio.

Vendors have invested a lot of dollars and time in ERP applications and often SCM is an accessory as you rightly say. But I guess ERP is a just a piece in the big puzzle. There’s so much more that can be done in SCM — Demand planning, inventory optimization, network optimization, whether organically or through acquisitions. But I guess the space would stay fragmented for some time though.

Why?

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I am not a specialist to talk on the vendor side, but from what clients tell me I get this picture that they are frustrated. Because what’s available in the market does not quite do it. A lot is out there to be built up, there are big gaps in the suits that exist now. Vendors are making progress for sure but it’s a long way to go.

What else is on the downside?

One concern is around the area of talent availability. Companies would really need to work hard on getting the right skill-sets and retaining them.

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Any new area that you spot which would redefine or impact the market as we go further — RFID? BI? Role-based technologies?

IT world is driven strongly by fashion and we all know the talk of the town today — Cloud. Cloud can make collaboration better inside its space. But the question really is — what can it actually do and how? Analytics is another side that would be a strong force. Like good quality decisions, algorithms, matrix etc. They are already having a huge impact.

And which verticals or regions might be the new pockets of growth?

Hi-tech vertical, because PLCs (Product Life Cycles) are getting shorter, managing profitability is a potential area. Consumer Products is another area looking to improve sustainability of investments and innovation. The macro-environment in the US and Europe is weak but Asia is a source of activity. Companies are looking at globalization as the next step of growth and this is where SCM kicks in. End-to-end collaboration can take it to next level.