It is not just transportation, warehousing or purchasing. Simple descriptions such as “field to fork” allow people to comprehend what it involves, but I believe the framework provided by the Supply Chain Operations Reference (SCOR) model is the most complete. SCOR details a supply chain consisting of the following key processes, which involve the movement of products, information, people and money or the delivery of services:
Traditionally people used to equate supply chain with dirt, grease and grime but now with recent technological advancements, supply chain is getting associated and linked with cutting edge technical capabilities such as:
These technologies truly are revolutionary, but in order for companies to maximize their benefit, core structural processes and capabilities need to be in place.
Blocking and Tackling
Blockchain has a strong link to supply chain and will truly revolutionize how many, often unrelated entities, can efficiently and safely work together. The key to blockchain is making required changes based on a situation and then everyone knowing about that and being able to deal with any potential impacts. However, unless the company has visibility to these changes, how will they know if anything has happened. In many companies, they are not even aware of internal changes, let alone external changes. In addition, if there is no way to be able to communicate and work, i.e. collaborate with the different partners in the blockchain, what use would a blockchain be. It is therefore key for companies to have visibility and collaboration.
Similarly, consider a company leveraging artificial intelligence or machine learning to predict changes in demand based on weather, marketing campaigns, social media buzz, etc. Based on all of the information that is collected, algorithms can estimate changes and impacts in demand. Most of us would expect real time updates to changes. Let us just say conservatively the algorithm feeds back six changes in a day, i.e. every four hours. If the company has a weekly, and most companies have a monthly planning cycle, how can the systems and processes even comprehend or deal with all of these demand signals and recommendations. If it takes a week to create the demand plan and then send it to the supply side of the organization for balancing, six updates a day is simply noise. The six updates a day would, primarily, be directed for execution, to determine if shipments could be rerouted and inventory decisions adjusted to satisfy latest changes. However, you get the idea that unless there is a reasonably robust planning capability such frequent updates are quite useless.
It is clear that companies have to ensure the basics are performed well before getting into some of these more sophisticated capabilities and in some instances these capabilities can be used to help
further develop the basics.
The way to effectively combine the required visibility, collaboration and planning is to leverage a control tower architecture. Think of air traffic control at an airport. They have full visibility to all of the planes in the air and are communicating and collaborating with them as to where they are and what they are doing. In addition, they are planning for when aircraft can take off, land as well as start and finish their journey based on what is currently taking place. A supply chain control tower works in a very similar way allowing a company and its partners to execute and plan everything they need to do. Logically the control tower can be thought of as a multi-layered cake:
A supply chain control tower provides a framework for companies to successfully handle the basics of visibility, collaboration and planning, allowing them to leverage the latest technologies or function with a greater deal of sophistication within their supply chain.