The Infosys global supply chain management blog enables leaner supply chains through process and IT related interventions. Discuss the latest trends and solutions across the supply chain management landscape.

« Overcome procurement challenges resulting through business expansion (M&A) - Part 1 | Main | Energy Sector and the Supply Chain »

The advent of "on-demand" SCM

 Of late, I’ve been noticing an increasing appearance of the term “On-demand SCM” in the web-world. Inscrutable as it sounds the first time, what got me thinking was the obvious overlap in most articles between SCM as a function as SCM as a collection of IT systems. Standing behind the many wonders of IT-enabled supply chains (and being completely blinded of everything else), we may be forgiven (or burnt-at-stake, depending on who you're asking) for assuming SCM equals SCM apps/integration (Akin to arguing that “child is INDEED the father of man”!)

SCM (the function, that is) has been the pioneer in terms of working with partners, communities, sub-cons, suppliers, marketplaces, global outsourcing and their moms and pops and pet dogs and NONE of these relationships started with systems. Extending the argument a step further, any work not being done by the core team can be termed as sourced – insourced, outsourced, near-sourced, co-sourced…take your pick, but all these would qualify  as on-demand. Going to the office travel department for an air-ticket when you need it or walking to the nearest Staples to buy a bunch of binders for an afternoon presentation or calling Fedex to ship-by-air a sample fabric design that’s late to your client buyer is all variants of on-demand transactions for me. In that sense, separating on-demand SCM function from on-demand SCM applications is crucial. I got one BIG CAVEAT here in that I wouldn't like to include planned material movements in the on-demand category. The extrapolation might be theoretically fine, but that's one heck-of-a stretch. (takes me back to first year Marketing Management course in B-school where Philip Kotler talks about vision statements with a pencil manufacturing co calling themselves as a "communication services provider".)

Getting back, on-demand SCM systems on the other hand mean different things to different people or may I say different solution vendors – like that Pet Shop Boys lyric which goes "I sometimes think I’m too many people…whoever I decide to be depends on who is with me". In pure frequency of usage, I'm seeing more of Supply Chain Event Management (SCEM) Big Bad Wolf philosophy dressed up as on-demand SCM Grandma - of course, I've also heard this being called as "near real-time" analytics to supply chain visibility to separate it from traditional data warehouse dungeons. The chief bottleneck of the SCEM pretender here could be the span which the on-demand SCM system needs to have - if you're talking of say a large retailer like Walmart or Adidas with global sourcing and hundreds and thousands of partners and diverse applications and decision centers AND if you’re dreaming of building a single centralized command center of an on-demand supply chain visibility system, God be with you. I’ll try crossing the Atlantic in a raft instead.

Something like on-demand SCM visibility (see, I’ve already narrowed the scope) would unconsciously touch upon all the elements of Six Sigma's DMAIC methodology or even ITIL v2's Service Support side of the house (incident management, problem management, release management et al). Essentially, one would need some kind of (a) Sensing/Discovery piece for outages or weaknesses (b) followed by an Alert & Event Management functionality to unleash the fire fighters on the simmering or burning fires (c) an ability sit down and do some analysis - what-ifs, future scenarios, impact assessments and then finally (d) something neat and pretty to show the Attention-Deficit-Disorder-infected bosses the good things you’ve done. Dashboards, Score-cards, kitschy 3D gizmos from Star Trek days, anything to hold them on to the message.

On a discrete function basis, we've had so many different IT sub-systems of SCM being "on-demanded" over the last few years - TMS has been a good success story especially load planning and Route Planning/Optimization, so has Indirect Procurement, primarily of the transactional variety. To give a vendor example, most of the customers of Frictionless Commerce (now SAP E-sourcing, with potentially some friction added I guess) have been on the on-demand strategic sourcing mode and SAP would prefer to keep it that way in the future as well. I've read cases of Demand Planning being done this way though none of our customers that I know of has gone thru this experiment. On a broader theme, sector leaders like the 3PL giants take responsibility of a function (discrete supply chain execution pieces or integrated logistics involving WMS/TMS and some part of Order Management/Web-commerce) combining operations with their IT-expertise as a boxed offering to their clients.

As a final thought, I anticipate On-demand SCM finding more and more print-space going forward. Watch out for good ol' supply chains being prefixed by the SCEM vendors with words like dynamic, adaptive, agile, responsive, shock-proof, gymnastic, triple-summersaulting, arm-twisting, convulsing, epileptic...ok, not the last few may be, but you get the idea.




Nice thought. Anyway the fact in future might be that the so called service providers / system integrators might need to do "gymnastic, triple-somersaulting, arm-twisting, convulsing, epileptic" actions for topline and bottomline growth. Taking a slice of business out of product vendors would form the foremost and critical business strategy. May be SAP and Oracle might be giving 50% each to the service providers topline!!! ASP's need to gear up by having a (process + technology) combined shotgun to face this threat from product vendors.


I like your collection, thanks for sharing this wonderful collection of themes with us.

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

Please key in the two words you see in the box to validate your identity as an authentic user and reduce spam.

Subscribe to this blog's feed

Follow us on

Blogger Profiles

Infosys on Twitter