The Future of Supply Chain Management: Network-centric Operations and the Supply Chain


Created:

How are outsourcing and supply chain tasks such as purchasing and inventory management tied to "network-centric operations?" What is a network-centric operation? Read this article to find out.


Once again, it is easy to see how this concept is translatable to current business operations. For instance, why would an organization invest heavily in a new ERP system? Once implemented and running, why do they share inventory, storeroom, vendor or procurement visibility across the spectrum of sites and locations? Why do organizations coordinate strategic sourcing activities with the various end users and divisions? Why are the platforms integrated with supplier and customer relationship management (CRM) systems? The answer to these questions is somewhat simple: To enable the enterprise-wide system to leverage its information and gain both synchronization and synergy in effort, effect and cost savings. This same effect can be achieved through a model centered on a network-centric solution called a "center of excellence.

A center of excellence is a microcosm of a network-centric operation. For example, a portion of a department, office or division can become network-centric when applying the principles of a network-centric operation to a strategic sourcing initiative in, say, Pipes, Valves & Fittings across five manufacturing divisions; or, office supplies and chemicals and gases.

Although we may expound the principles of agility, adaptability and alignment for a cost effective supply chain, these principles are directly interdependent on technology, culture and human skills. In essence, a person may be good at collecting and integrating data, but actually getting that data out and getting others to collaborate on what it means, and the resulting effect, will directly impact the company's ability to be agile and adaptable. This, in turn, effects and affects compliance and agreement management, return on investment (ROI), competitive intelligence and lost business development opportunities.

Assuming that the key element is technology and that technology enables information, then it's easy to see how some organizations have come to believe that technology is the panacea for all its troubles. They believe that if a company can implement this new technology, then it can also wrap its arms around all the necessary information, which in turn drives better, and faster, cost savings and decision making. But in some respects this is a failed test of rational logic, because a host of other variables also play a significant role in the network-centric operation, such as integration between systems, skill of implementation, effectiveness of change management, agreement management, skill sets, and, most importantly, decision making and speed of decision making. In essence, the technology may provide us with increased amounts of information and speed to communicate that information, but does the information actually become usable knowledge and does, or can, someone act on the information?

With this mind, solution providers that provide network-centric components both within a networked-centric operation, and/or an organization that desires to start to become a network-centric operation, allow the focus to fall back on the strategic aspects of business and provide the necessary oversight for the less strategic, which simultaneously allows management to reach time, decision, resource and cost goals. These solutions are focused on a center of excellence model that may have many elements and project components that are incrementally implemented, yet reach an ultimate long-term objective of becoming increasingly network-centric.

The network-centric operation follows some basic principles and tenets. For instance, a solution provider's collaborative methods and technological toolbox might allow a company to reach higher levels of information superiority, decision-making superiority and cost savings without being capital- or resource-intensive, and without requiring a company to invest in new technological platforms. The emphasis here is on the soul and intangibles of management and leadership, specifically morale, culture, training and the related skill sets that describe the characteristics of collaborative teams and organizations.

Solutions should also enable information superiority and touch on the multiple, simultaneous actions of analysis, decision points, decision making and execution, which help to ensure a rapid and accurate ROI. Solutions should also compliment the entire supply chain and every range of possibility in between, from strategic sourcing and asset management to on-site operations that manage procurement, inventory, storerooms, mailrooms and a host of other services.

Realizing that the supply chain is both inter- and co-dependant on a host of variables, solutions should ultimately help a company grasp and manage those variables. Some components that should be part of the planning phase and subsequent implementation to ensure a successful networked-centric operation are:

  • Enhance Your Experience.

    When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

Already have an account? Click here to Log in.

Enhance Your Experience.

When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

OR

Complete the registration form.

Required
Required
Required
Required
Required
Required
Required
Required
Required
Required
Required