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Supply Chain Execution Convergence: The Next Generation of Supply Chains

Supply Chain Execution Convergence (SCEC) describes the next generation of supply chains, which create a totally integrated supply chain by bringing together individual silos within the organization. This model offers supply chain managers new ways to create end-to-end visibility and the ability to quickly react to disruptions.

Moving forward towards SCEC adoption is a necessity for today's global supply chain managers. In order to achieve supply chain excellence supply chains must operate on international systems, or use a common end-to-end process to be connected to all global partners.

The importance of connecting the dots

In the recent webcast titled What Is Needed for Supply Chain Execution Convergence?, Adrian Gonzalez, president of Adelante SCM, and Evan Puzey, CMO at Kewill, made reference at how important it is to connect the dots in the supply chain. For instance, if transportation is optimized but other aspects of the supply chain are not, then true optimization becomes impossible. Integration is a must.

Synchronizing and orchestrating the supply chain

Today, supply chain managers are challenged with managing the rapid pace of change. “Companies are finding it difficult to keep up with that pace,” said Gonzalez. “Cost management is still important, but focus also on leveraging logistics as a competitive differentiator.” Logistics is more than just a cost center now. 

Gonzalez also brought up the case for more business intelligence in supply chain management, created by balancing costs, inventory, transportation, and labor. Further, the case needs to be made around performance, service risks, and market share. In turn, this will bring more profitable growth. 

Supply chain managers need to make decisions quickly in order to keep up with the agility needed to build a successful supply chain. With SCEC, supply chain managers also need to embrace technology including:

  • Platforms that facilitate intelligence sharing between applications
  • Cloud: Orders of magnitude more computing power, accelerates decision making
  • Analytics: To solve more complex, integrated problems

Agility is the name of the game

“In today's complex business environment, agility is the new normal, and functions like transportation management are moving to newer and higher levels,” Evan Puzey told EBN. “It's no longer enough to simply add a new transportation management system (TMS) to the mix, or use the transportation functionality within an enterprise system with the hopes that it successfully talks to the other systems while meeting customer demands.” Indeed, shippers have to move to the next level and consider exactly how their supply chain software is working together, collaborating, and creating a seamless experience for valued customers.

Driving supply chain convergence through collaboration

According to Puzey, visibility and collaboration drive the need for convergence. Key factors leading to supply chain convergence include:

  • Developing visibility and collaboration by understanding what information organizations want to gather, who they want to share it with, and how they want to share it.
  • Getting systems aligned to enable end-to-end visibility and to facilitate cross functional collaboration
  • Having both internal and external supply chain convergence

Focusing on external and external convergence

Achieving visibility across the extended supply chain in not always possible, though. A great number of senior executives acknowledge their supply chains lack visibility, according to a research study conducted by Forbes/KPMG in 2014.

However, they do realize the value in data sharing with business partners. As organizations get more complex the challenges, logically, also increase to a larger scale. Cloud technologies help enabling some medium and smaller suppliers to afford systems and connectivity, thus, building a path that will ultimately increase visibility and collaboration. 

Advancing the supply chain to the next level

According to Puzey, leading-edge companies are adopting SCEC because they realize that by deploying integrated technology solutions in conjunction with revamping internal processes they gain a tremendous competitive advantage. “With such an approach, having the additional visibility and analytics, and the ability to proactively manage the end-to-end supply chain is a win-win for everyone,” said Puzey. He offered the following advice:

  • As a starting point on the road to SCEC, shippers should think carefully about how to optimize the supply chain across all internal teams (not just silos).
  • Once shippers achieve this goal, it's time to extend the same effort out across the external supply chain. When this occurs, shippers gain unprecedented levels of visibility and cost/resource savings that couldn't be achieved with traditional, siloed supply chain software execution approaches.
  • Then, it is time to transition operations from the “right product, right place, right time” mantra to one that's focused on “any product, any place, any time.” This switch is largely being steered by the rapid growth in omni-channel distribution, and it creates an entirely new set of demands for a shipper striving to meet its customers' requirements. 

Setting and understanding their goals to achieve supply chain convergence is just the first step organizations must take. Then, choosing the best solution that will fit their specific needs becomes easier.

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