Collaboration: Models, Methology and Tools to Survive a Recessionary Environment

I would define Supply Chain Collaboration as having the people, processes, and technology in place that are required to communicate supply chain information and data both Structured and Unstructured sufficient to achieve a fully Demand Driven Supply Chain Network. Ok... perhaps this is a long winded definition but it is important to properly define where you are going before you try to get there.




First off though why should one care about supply chain collaboration right now in today's economic environment? To answer my own question in today's economic environment people are fundamentally looking towards two strategies for survival...

1) To Reduce Costs
2) To Retain Customers



Improving your supply chain collaboration talks to both of these. In difficult economies you want quick and accurate communication internally and externally being responsive to customers, thereby providing higher services levels and being more "sticky". You also (in a supply chain context) want to reduce the probability of excess stock or incorrect orders. You also want to reduce the time for demand signals to make it through your supply chain and to automate the demand signals from your customers. Everyone one is doing more with less and so you don't want to spent a lot of time trying to figure out the right information. And finally you want to reduce the costs associated with travel, meetings and other forms of communication. So all good reasons to improve the collaboration both within your business and between yourself and your cusomers and suppliers.
So having defined Supply Chain Collaboration and told you why you should be interested the next question becomes for many practitioners "Haven't we done this already?"... considering technologies like EAI, EDI, RFID, etc have been around for a while. What I maintain here is that these initiatives have had only a modicum of success because people have only looked at one component of a truly Demand Driven Supply Chain Network.

To really effectively improve the collaboration in your supply chain which will reduce costs and retain customers you need to look at all the components of collaboration...

• People and Process vs. Technology


• Structured vs. Unstructured

Until recently people have very much focused on structured information and the technology aspects of moving that information about. But more often than not these initiatives have failed because there hasn't been enough business process design to go along with the technology and/or the implementation of the new technology was done in a big bang fashion all at once without resolving the process issues first. Resultant data inconsistancies and/or change management issues with the people expected to use the system have rendered them somewhat impotent.
Also because not enough consideration has been given to the Unstructured Information that is prevalent in so many organizations improvements have been limited. The spreadsheets passed via email, the phone calls and one line queries that seem to make up the majority of our communications. As a production manager many years ago I can remember having my plant radio blaring with someone trying to reach me, the phone ringing and three people standing in front of my desk as people were trying o get a recent status on the production batch that was concerning them. Most of these questions were happening because the structured system was to hard to use, or the date not timely enough or because the person didn't know how to find the information out themselves. The long and the short of it is that these unstructured types of communication will happen regardles so you have to understand how to manage them both from a process and a technology perspective.

So the model for effective Supply Chain Collaboration has to consider Process and Technology, Unstructured as well as Structured.
So if that is the model we use then what's the Methodology to get us there? Well with any systems implementation you have to start with the business strategy. From that you design the process. You can then determine the solutions you need and then finally the underlying technologies. Whilst it may sound simple the biggest issue here is that people often put in technologies ad-hoc without understanding how they support the process and ultimately the business goals and strategy. So you have to start from these first.



Finally in terms of Tools to support the methodology one of my favourite is "Lean". Most people would be familiar with Lean Manufacturing. This has been around for a while. What I maintain is that you can use the concepts from lean when designing the process to support your strategy.



For example taking the seven (7) muda of Lean...

• Transportation (moving products that is not actually required to perform the processing)
• Inventory (all components, work-in-progress and finished product not being processed)
• Motion (people or equipment moving or walking more than is required to perform the processing)
• Waiting (waiting for the next production step)
• Overproduction (production ahead of demand)
• Over Processing (due to poor tool or product design creating activity)
• Defects (the effort involved in inspecting for and fixing defects)

These can be applied to supply chain collaboration...

• Use tools to minimize the time in meetings and travelling to meetings
• Be role tailored and present only the data required specific to a role to take the necessary decisions
• Eliminate unnecessary approval steps with dynamics work flows. If a person doesn't add value to the decision process then pull them out of it
• Address information that is not timely or that generates a dependency
• Avoid providing more detail than is required
• Provide search tools to reduce time spent searching for info
• Use automated validation and other tools to reduce incorrect information

So in summary then these are the models, methodologies and tools I would propose to improve the collaboration within your enterprise. If you use them wisely they should help you to reduce costs and retain customers which should help carry you through the current tough times.

For those who are interested I'm presenting this topic during the SMART conference in June. You can find more details at http://www.smartconference.com.au/program/day-one and just look for my name!

David Goad is the Managing Director for eSavvy – Microsoft Dynamics CRM Gold Certified Partner. eSavvy is an award winning Microsoft Dynamics CRM Partner staffed by some of the most experienced solution and technical architects in the Microsoft partner channel. We build and deliver relationship management solutions based on the Microsoft Dynamics CRM platform for large enterprises as well small and midsize businesses in Australia.