How technology can dissolve silos in supply chain management

A supply chain and procurement technology expert has urged companies to start adopting a digitally-enabled…...

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A supply chain and procurement technology expert has urged companies to start adopting a digitally-enabled ‘order-centric’ approach that will dissolve organisational silos. In an interview with SupplyChainBrain, supply chain tech specialist, Buck Devashish explained that contemporary supply chain management is not so much pushing new developments in technology as seizing upon digital innovations and using them for novel purposes.

Citing the example of the iPod, he explained that it took off 15 years ago because of iTunes – a cloud-based means of delivering tunes one at a time. The iTunes disruption “upended the music industry supply chain,” but its domination wasn’t to last – along came Spotify, making iTunes effectively obsolete. As Devashish puts it: “So it’s a case where technology comes into place and smart supply-chain practitioners have to align their processes to it. In the old days, a big consulting company would come along, do some business process changes, and you would fit the software to it. Now it’s the other way around.”

New, agile procurement as service providers illustrate the transition, offering affordable digital solutions to a range of novel applications for the technology, from tail spend management to strategic sourcing to category management. Devenish believes that new technology is opening a new vista for supply chain management by breaking down the traditionally compartmentalised supply chain structure.

Giving the example of an order particular to a specific company that has to be rushed urgently to a customer, he notes that if the outbound order can be combined with an inbound one, an untapped benefit can result. By tying together inbound and outbound fulfilment, shipment can be optimised, money can be saved, and the customer may even benefit from a cheaper price. But working in silos leads to optimising inbound or outbound, un-coordinated processes that can badly impact one another. Devashish concludes: “You have to change the paradigm, look across the whole thing and think about the inbound-outbound combination.”

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