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Supply chain is an important enabler of corporate performance. Growth is slowing. Success in global operations is an organizational imperative. With the rise in complexity (products, markets and rate of change), supply chain excellence is more important for companies to effectively compete. As a result, 55% of supply chain leaders report that they will be increasing spending on software deployments this year.
The goal is to balance growth with customer service, operating cost and inventory levels. It is easier said than done. The accomplishment of this goal requires supply chain software, but the selection is not easy. Today the market is more confusing that it was five years ago.
The supply chain software market is not an easy market to navigate. It was conceived in the mid-1980s, and redesigned for client-server software in the 1990s. Due to the number of technology provider consolidations, it has been slow to adapt to cloud and mobile computing.
The gap between the importance of the software and the current level of performance is high, and has remained so over the course of the three years of this study. The reasons are many. They include leadership, organizational, and technology barriers. Some of these barriers are outlined in figure 2.
Here, based on phone interviews and strategy days with supply chain leaders, we add some color to three of the top gaps:
• Executive Understanding of Supply Chain Management. A major gap in the implementation of supply chain software is the executive level understanding of supply chain as a complex system. Functional metrics lack alignment, complexity is rising and the pressure is on to drive improvement. Unfortunately, all too many companies reward the urgent, not the important; and as a result, companies are not able to fully take advantage of planning software. The gap between importance and satisfaction is lower for functional planning—examples include product life cycle management, transportation management and warehouse management—than with demand planning where companies have to make trade-offs to improve corporate performance across functions.
• Ability to Get to the Right Data. As companies implemented supply chain software, they learned the hard way that they needed both systems of record and systems of differentiation. Supply chain planning requires “what-if” analysis and multiple optimization runs through systems of differentiation. Visibility systems require a robust system of record to enable the consolidation of data from multiple systems to be used by both casual users and supply chain planners. Supply chains need both. Line-of-business leaders drive discussions on the depth of optimization and the depth of functionality in systems of differentiation while Information Technology (IT) teams focus on integration and systems of record. The larger the company, the more diverse the architectures and the tougher the problem to build scalable systems of record to ...