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Supply Chain Technology: Haste Makes “Waste”

Nov. 5, 2014
Do your due diligence to make sure supply chain technology is a good fit for your company’s needs and its competitive strategy before jumping in completely.

It’s not always easy to separate winners from losers ahead of time. This is especially true when deciding on supply chain technology. When it’s a “winning” technology, then it can truly enable a Lean supply chain. However, when it’s a “loser”, according to Alex Niemeyer of consultant McKinsey (“Picking winning supply-chain technologies”), investments in integrated supply chain planning systems can sometimes grow to hundreds of millions of dollars and often times may not add value, but can also result in a lot of value actually being destroyed.

While we can all think of negative examples, looking backwards (i.e., 20/20 “hindsight”) where selection and implementation of supply chain software and technology never reached its potential, Niemeyer gives some current examples with potential such as the use of digital technology (ex: 3D printing) and improved, collaborative forecasting technologies and processes, both of which can help reduce how inventory levels as well as shorten the lead times.

Another area mentioned is data analytics which when used in collaborative efforts can be quite useful in improving supply chain efficiency and effectiveness. Specifically he talks about the use of “high volatility” analytics to not only better manage not but also to use it as an opportunity for competitive advantage when a competitor is affected or in a new market.

I guess the moral of the story is to not fall so fast for “hype” on a new technology, but instead do the necessary, and thorough, due diligence to make sure it’s a good fit for your company’s needs and its competitive strategy (and that it works “as advertised”) before jumping in completely.

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