Order Management Hubs: Reigning in Complexity
To be sure, manufacturers have come a long way: from supply push, make-to-stock replenishment strategies of the 70’s; to JIT / Lean strategies of the 80’s; to extended supply chain B2B collaboration of the 90’s. It has largely been a move to what has been referred to as “demand driven” supply chain strategies. And today, where are we exactly? While many companies are still playing catch up with Lean and B2B collaboration practices, the challenge that leading companies are addressing today is to be truly customer driven. Or, what the customer featured in this videocast has called creating a culture where “the order is king.”
Granted, being customer centric is not exactly a new idea. The rub has been how to actually achieve a level of service, visibility and “ease-of-doing-business-with” that customers actually notice, while at the same time trying to manage the many sources of volatility that exist in today’s environment. Just to name a few sources of volatility: responding to major shifts in demand, both in total and from one market to another; coordinating cross-SBU activities and reaching a new steady state when businesses merge as a result of overall industry consolidation or market extensions; and, managing complex sourcing arrangements when some production occurs in house, and other production is outsourced and drop shipped to the end customer.
Here’s a picture of the basic environment we’re talking about:
Your customers may buy products that are managed by more than one SBU in your business. Do you make them order separately from each one? Can they get order status visibility on some orders but not on others? Do they have multiple call centers or points of contact? If you outsource production, can you accurately and quickly promise delivery dates with your customers? Are you optimizing the sourcing of each line item on the customer’s order, as well as the overall orchestration of delivery according to the customer’s time schedule?
My take on this is that there will always be a need for flexible, distributed “hubs” – order hubs, planning hubs, logistics hubs, product development hubs, etc. – that deal with the reality of the many facets of supply chain complexity. Monolithic systems just can’t keep up.
