There is a high level of interest in supply chain networks.
Yet these networks are not well understood, in spite of the current hype, which has not provided the right framework for a clear understanding of what supply chain networks are, what they can provide, how they work, and how the different offerings in the market are differentiated.
The ChainLink Research report, Supply Chain Networks Revealed, answers these questions, and in this post, I’ll focus on a few key issues that will help you understand supply chain networks and how to evaluate them.
For this decade of the 21st century and beyond, the winning business model is the networked enterprise.
The technology platforms that enable them are the connective tissue of these networks. Cases in point:
“The Networked Enterprise is the new business model for the 21st century. It requires a supply chain trading partner operating model that supports interoperability and visibility with reduced complexity.” - Ann Grackin, ChainLink Research
For supply chain executives, transitioning to this new model requires implementing a supply chain trading partner operating model that supports the networked enterprise, providing interoperability and visibility with reduced complexity.
The supply chain trading partner operating model is a codification and automation of the key processes, policies, performance metrics and technology that govern your supply chain partner relationships.
To meet the instant access/instant response cadence of today’s sales and fulfillment lifecycle, companies need extremely granular data from all of the demand and supply points across their supply chain, as well as the ability to rapidly and accurately analyze that data.
Customers expect not only accurate price, availability, and reliable delivery promises (down to the hour) while they are shopping, but often they also demand visibility to source markets and accurate tracking throughout the whole process.
This is big data. This is connected. This is 24/7. And this is extremely smart. This requires moving beyond incremental thinking. This demands transformative, ever-fresh business models, with broader and bolder approaches. And all of this requires digital connective tissue.
SUPPLY CHAIN APPLICATION NETWORKS
ChainLink Research 2019
To fulfill these goals, the supply chain network solution should include all elements needed to achieve an intelligent real-time supply chain.
Integration or visibility platforms, without applications, are frequently marketed as ‘supply chain networks’ by themselves. But, a supply chain network needs both the integration/visibility capabilities and multi-enterprise supply chain applications, together on one process-wide platform, a supply chain application network.
In the marketplace, there are two basic types of supply chain application network offerings. We call them Integrator Networks (IN) and Real-time Single Version of the Truth Networks (RSN).
Integrator Network - These are networks that have been built up over time through acquisitions. Thus within their offerings are a set of separate networks that are integrated between applications and users/tenants. A common integration platform is provided. Each tenant has their own database4 (in the cloud) supported by common master data.
Real-time SVoT (Single Version of the Truth) Network - These are networks that have generally been organically developed with a single database and single processing engine. This is a many-to-many approach in which all tenants share the same ledger-like, multi-enterprise data store - as well as sharing the same multi-party process execution. Below is a comparison between these two supply chain application network approaches.
Above all, companies need an accurate and timely picture of the supply chain - a real-time single version of the truth, and the ability to act upon it. It’s important to understand exactly what that means.
Here are the high-level technology capabilities:
All these create more inclusion which allows multi-enterprise optimization - to discover cross-function/network-wide solutions that are feasible and optimized for all the parties involved, rather than optimizing just for the big anchor tenant and pushing the burden to smaller suppliers.
Improving overall performance across the whole chain is the quintessence of network objectives today. Thus, our technology strategy and platform should be one that enables new levels of performance - growth with profit for all the partners.
By creating a network-wide digital network, we can gain exploitable details - not just estimated time of arrival, but the actual time; not just which ocean carrier, but which container at each stage as it moves from port to over the road. We may need sensor data, such as temperature, vibration, and directionality, to ensure our product integrity. We want to see clearly into the selling channel - our product in distribution, at the store, and with the customer.
And we want to act on it. That is network-wide optimization. It goes beyond changing local parameters, such as resetting a safety stock level. It involves mutual-optimization across multiple functions and multiple enterprises. Ultimately, solutions that optimize across functions and enterprises will produce superior results across the chain.
All this data enriches us, makes us smarter, and enables us to be more competitive. This kind of real-time data and intelligence opens up greater possibilities for all parties involved. Now is the time to get closer to our customers and partners. They need us - and we need them - now more than ever.
Download the full report: Supply Chain Networks Revealed where I compare enterprise-centric apps, B2B Networks, Integrator Networks and Real-time Single Version of Truth Networks, and explain why only the latter is fully capable of solving the multi-party challenges in the supply chain.
About the Author
Ann Grackin, Founder and Partner at ChainLink Research
For more than two decades, Ann Grackin has been on the frontlines of the Supply Chain Management technology and eCommerce frontier, leading global strategy and technology implementations in the high technology, semiconductor, automotive, textile, and apparel industries. Ms. Grackin has served in many capacities in this dynamic environment and worked on global supply chain strategies for some of the leading Fortune 500 firms, with assignments in Asia and Europe and North America.
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