Get the IT in tune with supply chain expectations

How lean or agile your supply chain is depends to a huge extent on how good the underpinning IT is. So says Carl Powell, consulting director at Unipart Solutions Practice (USP), which runs Jaguar’s spare parts supply chain. “We use a high level strategic health check, where we go in at the board level and look at the business drivers and needs – see what levels of service are needed and how the company differentiates itself,” he says. “Then we talk to the IT manager and see if he’s on the same page. The objective is to assess that area of IT strategy: then you can go down the levels eventually to the KPIs.” Most important is to ensure integration in order to achieve role-based useful visibility as close to real time as makes sense. At the centre you need the core functions working well: inventory management, forecasting and planning, production and warehouse management. Then supporting those, you need systems for supplier planning and collaboration, with exception management, and all based on one view of the supply chain from the customer base, with visibility all the way back to the suppliers so that signals for planning and management are as noise free as possible. Looking at key enablers to supplier collaboration, Powell cites RFID for the future, because of its potential to automate so much of material handling, and to improve accuracy. For now, however, he counsels getting more value out of existing ERP systems by driving towards supplier portals. “They’re still at the advanced end of thinking: not many companies are doing much yet… We don’t go down the EDI route much now: we look at supplier portals, mostly using WebMethods because portals are easier to implement with new suppliers and easier to maintain.” But which way you go, and what you do with the systems depends on your supply chain relationships. “Tesco, for example, is different to others: it mandates how deliveries will be made and how you will provide information. SMEs can’t be so demanding.” For Powell, collaboration is critical in all this. “We’ve been talking about collaboration for four or five years, but the Internet technologies and the applications are there now. And it needs to happen to make businesses and supply chains agile.” An excellent example is Unipart’s own work with Jaguar: its parts suppliers can see everything on a secure portal – everything from the parts profile all the way down to the dealer network, and that’s world-wide. The portal gives them rolling six-, three- and then one-month firm orders, and it lets suppliers do their own planning and scheduling using trends and usage data. “There’s a choice here: you can stop information visibility at your level, or you can share information and be transparent. I can see why some companies might find the latter a challenging idea, but that’s how you get real collaboration and agility. You can hear Car Powell at the MCS Lean Supply Chain Forum on 13 April at Gaydon in Warwickshire (www.mcsforum.co.uk).