Creating a Supply Chain in the New Age of Commerce

As discussed previously, companies are being forced to change their approach to organizational design evolving to a true end-to-end supply chain enterprise due to the dynamics of global commerce. This evolution of the enterprise must consider many diverse factors and newly developed business drivers in re-casting itself into the information age. Design criteria must take into account both developed and emerging global markets, e-commerce and mobile retailing, escalated demand for customer responsiveness and business continuity, increased and changing (non-traditional) competition, the growth of consumerism and mobility of its customers.

Strategic partners are more important today than ever before because virtual operations and outsourcing are more fluid and focused than a vertically integrated organization. The new enterprise relies on highly automated control solutions, intelligent and integrated enterprise software, validated contract manufacturers, numerous 3PL's and preferred vendors to deliver quality products and services to customers, often times without manual inspection by the originating company. Virtual operations (e.g. Amazon) and shared capacity have become more common in large-scale enterprises than self-contained factories and distribution centers. Yet, the success of the new enterprise lies not in its re-design of hard assets and capacity. The gap between the tradition and the fully evolved enterprise lies in information processing and supporting I.T. architecture.

Building the Connected Enterprise

In order for all companies to leverage the changing marketplace, the information-rich customers and the broadening universe of its operations, they must capture, process and curate information in a way that empowers all resources of the enterprise to out-perform competition. This is what is referred to as the Connected Enterprise. Let's take a closer look.

Before we actually define a fully inter-connected organization, it is useful to understand the new set of capabilities and competencies associated with a re-modeled enterprise:

  • Thorough understanding of the new generation of technology-equipped consumers and their service requirements
  • Customer engagement processes for data access and order-entry
  • Continuous flow supply chain: sourcing, manufacturing, logistics all linking the shop floor to the administrative offices and out to suppliers, intermediaries and customers
  • Customer service and tech support activities integrated with other business functions and their systems including product development
  • Social intelligence and insights-driven, thought leadership marketing

Once the organization has mastered these prerequisites, the company's evolution into a connected enterprise can proceed to pursue the following information technology objectives:

  • Seamless access to end-to-end information linking customer preferences/needs to supply management.
  • Unencumbered network accessible across the enterprise and global marketplace.
  • Harnessing the Internet of Everything into business applications: people, processes, data and things.
  • Adoption of serialization technology (See sidebar below): Each resource, internal or external, that links demand to supply; every unit of supply, and every product and package level is assigned a unique identifier for marshaling those resources and goods expeditiously through to fulfillment.  A link is made possible from raw materials to packaging, to supply chain to consumer using serial numbers. Interoperable systems are implemented throughout the supply chain to replace the trading, shipping and invoicing of “products” with “serial numbers” as surrogates for the products.  Returned or recalled goods can be tracked and processed properly (e.g. proper credits, restocking location). Administrative functions such as human resource management, scheduling, budgeting, project management and cost accounting become streamlined through connecting asset numbers to a time, place and function.  Serial numbers can also be used to establish a direct link to the customer for brand loyalty purposes.
  • The ability to explore other disruptive technologies unique to your business and designed to collaborate seamlessly inside the enterprise and externally.
  • A smart and highly secure infrastructure, which freely enables legitimate business activities yet protects against hacking and other breaches of security.
  • Real-time analysis and curation (distribution) of transactional information to inform all business systems for purpose of continuous improvement.
  • Provision of new decision-support tools and virtualization co-capabilities to streamline scenario planning and guide investments.
  • Linking human resources and authorized stakeholders (using apps, wearable technology, mobility devices, etc.) to various parts of the enterprise to enrich the customer experience.

Benefits for the Connected Enterprise

The business benefits of a Connected Enterprise are plentiful, primarily optimizing the “speed and direction” of the company.  All business processes that support revenue-generation are aligned in purpose, recognizing that traditional “sales” expertise will be soon replaced by “engagement and fulfillment.” Central to these changes is the universal use of serial numbers to link the physical environment of the company with its expanded information management systems.

Cost improvements are realized from reducing the risks of aged, damaged or short inventory, improving cycle and delivery times, improving returns processes, scheduling production resources more efficiently and assuring a well-trained, motivated pool of talent to guide the company. These savings can be passed along to the customer as a pricing advantage and/or converted into higher profits. The Connected Enterprise becomes more competitive, more operationally efficient and more dynamic in anticipating market shifts.

In short, all business activity is conducted in a new world…a serialized world. Let us know how your organization is surviving and thriving with these shifts in the comments section below.

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