Optimization Technology as a Catalyst for Supply Chain Innovation

Innovation is one of those buzzwords that is used almost all too often in business but still remains as essential to maintaining a competitive edge.

For many companies, innovation has become a key driver behind their company culture, especially when it comes to their supply chain.

Advanced analytics and decision support tools have proven to be a valuable resource for progressive supply chain professionals driving transformation in their organizations.

According to Gartner, the areas where companies are currently focusing their supply chain innovation efforts include:

Segmentation
Organizations are embarking on cross-functional segmentation efforts to reduce overall complexity. Value chains are segmented to manage similar clusters to do the same. Companies start working with customers and suppliers to build inter-enterprise processes, such as collaborative forecasting and inventory management. Technology enablement focuses on building connectivity with trading partners, as well as supporting cross-functional trade-offs between supply chain and other functional areas. It is that latter part, where companies often struggle to fi nd the best way forward, largely because of the limitations in their software platform - which is in many cases, Excel.

Cost-to-Serve
Organizations are increasingly looking for ways to get higher visibility into their CtS. Improvement opportunities are initially identifi ed by analyzing cost components. Using advanced analytics for deeper insights enables companies to fi nd ways to improve their CtS in line with their strategic objectives. Integrating analytics for decision support provides valuable in-sights into day to day operations and business planning. While commercial off-the-Shelf (COTS) supply chain software vendors do have good solutions for visualizing the CtS, their ability to effectively integrate with regular business planning processes has been limited thus far.

Supply Chain Talent
With supply chains moving more and more towards the heart of the company, attracting, growing and leveraging top talent is of eminent importance. In addition, we can witness a growing synergy between the world of operations and the world of analytics, raising the bar for supply chain staff to be savvy in applying analytics in the supply chain field.

Supply Chain Visibility
In Gartner’s words, “the aim of end-to-end supply chain visibility (E2ESCV) is providing controlled access and transparency to accurate, timely, and complete plans, events and data - transactions, content, and relevant supply chain information - within and across organizations and services operating supply chains.”

While companies are certainly eager to drive innovation in their supply chain by tackling many or all of the key themes described above, most of them still struggle to fi nd the right technology to support their efforts. Gartner indicates that around 65% of companies are still at stage 1 or 2 of their Demand Driven Value Network maturity model.

They do not have an enterprise-wide planning process that brings viewpoints from various supply chain functions within the company together. In other words, they need the right technology and process to enable their innovation.