Supply Chain Management

One of the very interesting decisions that was taken not so long ago by one of the businesses of this organization was to go with one of the best-of-breed product vendors for Forecasting. This was in context of a decision to go with ERP II for Supply Planning application which is downstream to Forecasting. Some of the reasons cited to go for best-of-breed product vendor for Forecasting were superior statistical forecasting capability, point-of-sale forecasting and ease of navigation/use for general planners. This was in comparison with the ERP II vendor.

Our team was involved in integration of the best-of-breed application with the Supply Planning application. Needless to say, the integration process was painful and any trouble-shooting exercise called for mobilizing teams from best-of-breed, the ETL, ERP II and also the business. Over a period of time we realized that the time spent on application integration was way too much that perhaps we initially bargained for. However most of us did not have the bird's eye view perspective, the general feeling was that all this struggle was probably worth it since business was deriving superior benefits with such a diverse application architecture.

In one of my rendezvous with the CIO, I happened to bring up this topic that was bugging me for a while. One of the confessions from the CIO was clearly that given a second chance, the organization would not have gone for a diverse IT supply chain landscape. A superior best-of-breed application can only get the business so far, and there are quite a few process-specific big-hitters(read productivity gainers) that the business could have focused upon. All in all its the process more than superior statistical capabilities of the tool that drives the business better. Ofcourse, I was unable to get the opinion from business side on this one.

One thing that clearly came out from the conversation is that, having a common platform for all applications is the key to bringing down total cost of ownership of various tools. Granted there are bolt-ons and best-of-breed applications (some of them proclaiming to be "seamlessly" integrated with ERP applications) out there that all customers should be aware of, but when it comes to taking the plunge - one needs to factor in the increased cost of managing the integration. In many circumstances, the perceived gaps in ERP II product vendors vis-a-vis best-of-breed tool can be filled up with low effort customizations. The ERP II vendors also offer capability to use interfaces to call that one specific function in the third-party tool that the business wants desperately to do their work with. Its important thus to mark all the business requirements as must-haves and nice-to-haves, and get this list parsed through not only business experts but also skilled experienced IT personnel.

Having worked in a diverse supply chain landscape, my views resonates with that of others coming from different backgrounds. At the end of the day, these supply chain applications are not the end-all but just a naive tool in the hands of a smart planner.