I’m one of those people that has a stack of opened and unopened mail sitting on a desk near the front door. I hate paper-based mail because it takes so much work to open and read and then I have to do something with it which usually means it ends up in an ever-growing pile. Maybe once every couple of months the stack gets sorted and filed away. In the meantime, usually I or my wife are the only ones to have read it. When the real sorting and filing gets done, we sometimes discover that we’re going to take a hit of some type because we didn’t act on information in the mail in time. A simple case is that a bill didn’t get paid on time and now there are interest charges. Or perhaps we missed the deadline to respond to an invitation for an event and so we won’t be able to participate. So, this email stack represents a ‘dead zone’ where information is allowed to languish, and, like a delicious pastry left out in the open, go stale and lose its value. I got to thinking about this as an analogy for traditional supplier collaboration. Many manufacturing companies have implemented supplier collaboration solutions to pull in data in a more real-time fashion with suppliers. Traditionally, supplier collaboration involves the sharing of information between an OEM and a supplier related to component forecasts, purchase orders, Kanban signals and inventory positions. It’s important to share the information because of its direct impact on the ability to build product. And it’s important to share the information often because events in the supply chain can impact delivery schedules on a day-by-day and hour-by-hour basis. Many companies have implemented EDI (Electronic Data Interchange) and supplier portals to facilitate the systematic, high-frequency sharing of data. The unfortunate reality of traditional approaches to supplier collaboration is that the information that is collected goes into an information ‘dead-zone’ (i.e. ERP system) just like the mail stack. Sure, a buyer knows that a purchase order is going to be late but what is the impact of that? Buyers, on their own, typically don’t have the background nor the tools to understand the relative impact of exceptions (i.e. uncommitted forecast, purchase order receipt variance) on operations. How is a buyer supposed to know that an inability for a supplier to make a full commitment to a forecast could result in significant performance penalties on a large project, or that a partial delivery will mean a high-value order for a key customer will slip beyond a promise date? What’s needed is the ability to collect the information and provide real-time impact determination and alerting to all roles in the organization including planners, customer service representatives, sales, project teams and executives so they can collaborate to solve problems while there is the opportunity to make a real difference to the business. This is the hallmark of the RapidResponse Control Tower and how using RapidResponse to support supplier collaboration initiatives can help you to achieve superior corporate and operations performance.
Control Tower Concepts: Supplier collaboration - Beware of the information dead zone!
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