Successful supply chains match business objectives, says consultant

With hundreds of options to choose from, how can corporations pick the right supply-chain management (SCM) technology to meet their business goals? The answer, according to one consultant, comes in a single word: “focus.”

Al Donald, national industry leader at Deloitte, said companies shouldn’t try to make their supply chains meet everyone’s requirements all of the time. There are myriad ways to bolster SCM; “anyone who thinks they can do all of them is crazy,” he said at a Microsoft Canada Co. event on SCM.

Instead, Donald advises companies to use SCM to support specific business objectives. He provided an example of a firm that did so successfully, a plastics manufacturer that wanted to beat the competition with superior speed of service.

The company focused on infusing the supply chain with flexible capacity and scheduling. It used business intelligence tools to prevent problems. Donald said the manufacturer also took data from its software to ensure the tech strategy supported its business aim.

“They’ve turned that into very profitable, successful little business,” Donald said.

Donald’s message resonated with at least one person at the Microsoft event. Mark Plotkin, planning manager at Canada Sportswear Corp., said it makes sense to tie SCM into business objectives. However, the strategy only works “as long as there’s follow-up,” Plotkin said, pointing out that it’s important to check the metrics often and make sure the technology supports the business plan.

Donald also presented data from a global survey of manufacturers at the Microsoft event. He said more than 80 per cent sell goods outside of their home territories, and 59 per cent of respondents outsourced production and manufacturing. Donald said 53 per cent of them have shifted production to low-cost regions like China, Mexico and Eastern Europe.

Donald pointed to some unusual paradoxes that arose from the survey. For instance, on one hand, respondents said they expect to derive new revenue from new products. On the other hand, respondents put production time-to-market at the bottom of their list of SCM priorities. This, when time to market is crucial for companies seeking new product revenue, creates something of an “innovation paradox,” Donald said, noting that it’s an obstacle best beaten by SCM strategies that match business goals.

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Jim Love, Chief Content Officer, IT World Canada

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