The supply chain evolved over the past century to become a critical strategic business function, of which its success directly supports an organization’s accomplishments. Technological advancements now enable supply chain managers to better understand the needs of their individual systems and to plan materials demand more intelligently than ever before. Still, nearly half of all companies had not transitioned away from manual processes for forecast planning and collaboration in the supply chain, according to a 2011 study by Aberdeen Group. As a result, this leaves major chances for losses in efficiency and redundancies in work processes.
Each organization experiences its own pain points and challenges. And with a wide variety of tools available, automating forecast collaboration can seem a daunting task to undertake. However, as with any solution, careful planning and research, combined with manageable implementation will spell success.
Before you start, build a solid team
Successful automation is dependent on an understanding of which areas are most in need. In order to tackle this, it is essential to involve key stakeholders and departments. The project team should be comprised of representatives from the areas that would be affected by the collaboration process change and should include (but not limited to) members from planning, procurement and IT. It is also beneficial to secure executive sponsorship at the highest level possible.
Analyze current systems
Once the team is assembled, start by first assessing the needs of your organization. Understanding goals will help to analyze where current systems fall short and create a clear picture that is geared toward your organization’s desired outcome. Organizations should take an unbiased (detached) look at current systems to:
- Determine the age of the organization’s ERP data. Out-of-date material resource planning (MRP) data generates inaccurate forecasting, order quantities and, at times, delivery date scheduling. While a 12-to-18 hour age for MRP data may be acceptable in some environments, others may identify the need more current information to respond to shifts in demand
- Evaluate the level of visibility into suppliers’ inventory
- Analyze the ability to communicate with suppliers in a system that integrates with your ERP
Identify time, data and collaboration gaps
The key to understanding where gaps exist is to identify which questions to ask. Each organization is unique and gathering team members from various departments will help narrow the focus. But some general questions to consider include:
- What benefits/improvements in time, accuracy and materials spend can be realized through tighter integration between planning and procurement as well as planning and suppliers? Is there notable benefit by utilizing a single system?
- Does the organization have the ability to collaborate with its suppliers in the current procurement system, using real-time demand and forecast data?
- Which manual processes—such as email, spreadsheets and phone calls—are still employed to communicate and negotiate planned orders? Is there a technology that could help to automate those tasks?
- How does the organization obtain information about suppliers’ inventory? Does that information provide visibility into their current and projected stock?
Evaluate all systems
This critical step requires a deep understanding of both shortcomings in the current systems and the capabilities of the potential solution. Some systems that are already in place may contain functionality that, when combined with features of another, could solve the problem in question. On the other hand, current systems may not “play nice” with certain potential technologies and may need to either be replaced all together, or configured for a smoother transition.
Implement a “right-fit” solution
Now that the leg work is completed and a clear picture of the organization’s needs is established, choosing the right technology is a matter of aligning priorities with capabilities and price. Executive sponsorship will play a key role at this stage. Ensuring the right alignment requires taking a look not only at what the potential solutions offers but which internal resources would be required and can be dedicated to the implementation process. The decision process should take into account:
- Projected improvement from the solution within a specific timeframe
- Changes in resource allocation to implement and manage the new solution
- Technology requirements: IT, software, hardware
- Time and budget requirements to deploy
- Personnel training
When it comes time to onboard suppliers, approach it one step at a time. Using internal experts and the advice of the implementation team, create a plan for the onboarding process, prioritizing each step along the way. Evaluating which resources—both internally and externally—are required for a successful implementation, organizations can determine which phases are either most pressing or most realistic to begin with, given the available resources.
In order to gain insight into potential road blocks, organizations might consider onboarding a small set of suppliers first, such as those that already share some of the same systems, to allow system and process integration on a more manageable scale.
One step at a time
Information is king and organizations looking to reap benefits from automation and realize return on investment (ROI) are wise to take an incremental approach to the process. Research informs decisions and ongoing data collection and reporting help ensure the right steps have been taken. The “right” level of automation is different for each organization and its unique set of circumstances but taking the time to understand where that sweet spot exits can have a major impact across the board—from operational efficiencies to the bottom line.
Brad Huff, Executive Vice President and General Manager of Supply Chain for TAKE Supply Chain, Austin, leads the strategy and overall growth of customer, partner and industry relationships through continuous product innovation and value delivery. He leverages more than 20 years of experience in enterprise supply chain solutions to oversee North American operations.