Turning the Supply Chain Upside Down
What's next when the supply chain is fully integrated and all its events look like one? You can begin to manage the supply chain, instead of being managed by it. This means that the function of managing starts by looking at the desired outcomes of the supply chain as a goal, instead of looking at the events that make it up. In essence, the supply chain, which has been regarded as back-end, is turned upside down and becomes front-end. For example, instead of reading an inventory allocation report specify the replenishment target, and let other events chained to it get propagated through the supply continuum. This allows closer management of the desired profit margins.
Although most companies take integration for granted, beginning by choosing a solution based on its visible features, the opposite method is better: choose the best integration path. Many companies can spend a few million dollars for a new e-procurement solution but will end up incurring costs 10 times higher to complete a proper integration to inside and outside events.
Going one final step further, world-class e-procurement will require yet another level of integration focused on global interoperability between e-procurement marketplaces. Unfortunately, if you're not already dancing to the integration beat, you won¹t be invited to other dances.
Editor's Note:Walid Mougayar is president of CYBERManagement and author of Opening Digital Markets. He is an angel advisor and management consultant to over 15 dot coms or dot corps.