Technology Is Transforming the Supply Chain into the Supply Network

Published : June 19, 2015

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The journey of raw materials into customer-held items used to be a fairly straightforward, if limited one. Today, however, supply chain technologies have completely subverted the "relay race" style of link-to-link contact within the chain, expanding and building on fractal connections to make a web of support, supply and shipping that is much more tolerant of disruptive factors.

Tapping into and harnessing this network is one of the most progressive moves a supply chain manager can aim for, offering their company the flexibility to recover from disruptions, an increase in efficiency and a backup course to follow if their main supply lines ever falter.

Versatility: The Most Attractive Trait

It isn't enough for a company to use the latest technology and have a strong supply network. Competition in every industry is fierce, and that means your extended support network needs to be on the same page too.

While you may already have a strong supplier network in place, consider bringing in a second string that's savvy in supply chain technologies. While having a backup supplier is a move ostensibly made to fill in occasional gaps, if your company ever decides to make a more aggressive push towards automation and data-rich workflows, you'll have an ally waiting in the wings.

If remaining with your current supplier is a strong preference, consider asking if you can share technology and supply chain tech strategies with them, or vice-versa if they are currently better equipped. This is helpful to both parties and evens out the disorienting catch-up game as one link grows and the other remains stationary.

IT Presents More Unique Obstacles

Building a robust network with technology isn't all sunshine and roses, however. You'll need to carefully balance the natural push for efficiency against supply chain risk management to weather bumps in the road.

Bob Trebilcock of Supply Chain Management Review presents an interesting demonstration of an improperly balanced network: pre-packing the rest of an order once you've gotten word the last piece is en route seems like a good idea, but what if that piece gets held up? All of a sudden you're wasting warehouse floor space, pick/pack labor hours and potentially even customer expectations if your WMS is set to auto-notify the customer of expected delivery date.

Simply spreading out network branches to route several sources to the same node won't work — at least not for long. You'll need to build complete standalone paths that run concurrently to truly get the most out of your network. Like a multi-lane highway, this approach lets you shift "traffic" to different lane if an accident blocks one.

The Right Direction to Move

In a recent piece for Industry Week, L.N. Balaji noted that supply chains are becoming increasingly global and diverse. While a solely domestic supply chain is a viable business model for some companies, the vast majority find themselves looking for overseas vendors to keep fulfillment up and costs down.

International supply chain networks not only provide these benefits in the short term, their very existence allows their parent company to seize opportunities for inexpensive production or infrastructure creation overseas before their stateside counterparts can even puzzle out the import paperwork. As emerging economies offer enticing and competitive materials and labor, the choice to start initial outreach or strengthen existing ones is an easy one — with robust technology supporting the supply chain, the same easy choice becomes a given.

There is no one true formula for building a network, but much like a railroad system, the more switches you have at your disposal, the better. Your company's viability could very well rest on your ability to change course in the near future, leveraging the potent combination of supply chain technologies and a supply chain network to open up fulfillment options.

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Topics: Supply Chain Technology

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