Four key questions to ask vendors to avoid your own supply-chain Suez crisis
- Avoiding supply chain blockages is critical and that means asking the right questions of your own suppliers, says Oracle's Terri Hiskey.
Without mindful and strategic investments, a company’s supply chain could become wedged in its own proverbial Suez Canal, ground to a halt on a sandbank of outside forces and inflexible, complex systems.
It’s a colorful image perhaps, but one that has become a reality for all too many companies over the past year - and a reality that has significant consequences.
Supply chain failures may not be such high-profile events as the Suez Canal blockage, (although key sectors did suffer their own headline-grabbing supply chain moments during the COVID crisis - toilet roll panic was once a thing, remember!)
But think of such supply chain shortcoming as akin to slowly sinking as a result of thousands of holes in the bottom of the boat, in this case a series of smaller inefficiencies that each cripple overall operational efficiency and negatively affect the customer experience.
They have serious bottom line implications for organizations as, delay by delay and spreadsheet by spreadsheet, companies run the risk of losing competitive advantage to more nimble, cloud-enabled rivals.
As the world emerges from the pandemic into the Vaccine Economy, it's important for all organizations to grasp a new understanding of how important adaptable, integrated supply chains are.
To do this, business leaders have critical choices to make. If executives don’t ask key strategic questions of supply chain software vendors, they can unknowingly introduce a range of operational obstacles into their company’s future. Here are some questions to consider.
(1) Do technology claims pass the test?
Are advanced technologies, such as Machine Learning, the Internet of Things (IoT) and blockchain, integrated into your supply chain applications and business processes, or are they separate elements?
It’s important to go beyond the marketing. Is your vendor actually promoting pilots of advanced technologies that are simply customized use cases for small parts of an overall business process hosted on a separate platform? If so,your organization could be left with the burden of figuring out how to integrate it with the rest of the tech stack - and the challenge of maintaining those integrations on an ongoing basis.
To avoid this situation, seek solutions that have been purpose-built to leverage advanced technologies across use cases that address the problems you hope to solve. Check that these solutions come with built-in connections to ensure easy integration across your enterprise and to third party applications.
(2) Has it been built for the cloud?
If a vendor’s solution for a key process (such as integrated business planning or plan-to-produce, for example) includes applications developed over time by a range of internal development teams, partners and acquired companies, what you run the risk of ending up with is a range of disjointed applications and processes with varying user interfaces and no common data model.
Update schedules for the various applications will also end up being disjointed and complicated, with the result that customers can be tempted to skip updates. On the other hand, some upgrades may be forced, causing disruption in key areas of your business at various times. And if some of the applications in the solution were written for the on-premises world, business processes will likely need customization, making them hard-wired and inflexible.
Look for a cloud solution that helps connect and streamline your business processes seamlessly as well as ensuring that updates are easily accommodated, resulting in greater value driven by the latest innovations.
(3) Are your supply chain applications fully integrated?
Lack of integration among applications within the supply chain and beyond will result in end users lacking visibility across a company’s operations— and that, inevitably, will directly affect the quality and speed of business decisions. When market disruptions or new opportunities occur, non-integrated systems make it harder to evolve operations — or even come to an agreement on how to react to shifts.
Many key business processes span multiple functional areas— such as manufacturing forecast-to-plan, order-to-cash, and procure-to-pay. If applications are not integrated across the range of processes, business users will be forced to pull data from multiple systems, then often embark on debating which data is right.
All of these issues increase operational costs and make it harder for a company to adapt to change. They also keep the IT department bogged down with maintenance tasks rather than focusing on more strategic projects to support business growth.
Bottom line - make sure your chosen solution comes with built-in integration.
(4) Does your vendor rely heavily on partners to deliver functionality?
Ask for clarity on which products within the solution belong to the vendor and which were developed by partners.
Is there a single SLA (Service Level Agreement) for the entire solution? Will the multiple organizations’ development teams work together on a roadmap that aligns the technologies? Will their priority be on making a better solution together or on enhancements to their own technology? Will they focus on enabling data to flow easily across the supply chain solution, as well as to other systems like ERP? Will they be able to overcome technical issues that arise and streamline customer support?
Getting answers to those four questions will provide a good foundation for supply chain decision-makers. If the vendor is unable to meet these foundational needs, the customer will face constant obstacles in their supply chain operations.