A New Generation of Enterprise Supply Chain Systems Eliminates Operational SilosAugust 31, 2016
Supply chain management (SCM) systems have constantly evolved throughout the past decade, with an increased focus on lead-time optimization. Efficient supply chain management has helped fuel the growth of the global economy, making it possible for companies to do business with overseas suppliers and produce products faster and more cost-effectively.
Today, however, many companies have hit the wall in supply chain efficiency and speed to market. Nowhere is that more true than in the retail and apparel industries, where the demands of omnichannel retailing have exposed a critical weakness: supply chain silos.
A New Generation of SCM Systems
The good news is a new generation of supply chain management systems is helping enterprises break through their organizational barriers and tear down the silos in their supply chain. These new Retail, Fashion and Apparel SCM solutions connect the data and all supplementary systems in an organization to drive better decision-making and faster turnaround time – turning SCM into an enterprise platform that shares information among key stakeholders in every department, as well as third parties such as vendors, suppliers, product testing labs, logistics providers and more.
With this kind of alignment in processes and systems, SCM can then serve as an enterprise hub connecting users and departments across many different departments in the organization.
The typical product lifecycle is complex but the new generation of SCM systems connects users, departments and data throughout the organization. SCM takes information from a number of other systems and data sources, shares and analyzes it, and then executes decisions based on the results. Every stakeholder shares in the information, which is important, since issues in one part of the organization have ripple effects upstream or downstream.
Here are a few of the ways the new generation of SCM solutions can change the way companies do business:
Respond quickly to sales data. Boosting sales and profitability can be summed up with a simple formula: If something is selling, accelerate production and make more of it; if it’s not selling, cut the losses and stop making it, because it’s cheaper to cancel production. Even a handful of poor-selling products can ruin overall profitability. With the SCM hub connecting design, finance, sales and production data in real-time, retailers and brands can quickly react to the latest sales information and make the most of every season.
Push decision-making further downstream. SCM allows organizations to push decision-making further downstream; this concept of “postponement” – waiting until the last possible minute to make decisions – is central to lead time optimization. And it improves decisions, because the further into the design-production process, the more information companies will have and the better decisions they’ll make.
Perform quality audits at the factory. SCM allows organizations to incorporate quality audits as part of the enterprise platform. This enables you to check for quality at the factory before the goods ship; if an audit fails, you can address it at the source, resolving quality issues quickly and without undue cost.
Break Down the Silos. Throughout their history, supply chain management systems have continually adapted as business models have changed. Today is no different. With the rise of omnichannel retailing, SCM has again adapted in order to break down organizational silos and serve as an enterprise platform – making omnichannel retail a reality and putting businesses on the path to much greater profitability.
For more information on the new generation of SCM solutions, download NGC’s white paper, “Optimize Lead Time, Maximize Profit.”