4.20.2007

Supply Chain Roars Back
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Supply Chain Management Roars Back to Life.

There have been a couple of big software waves over the past decade or so. In the latter 90's, ERP implementations were big news, coming right after the re-engineering "don't automate, obliterate" wave. The Internet was was also big, but considered to be 'fun and games' 'for kids' 'not secure' and not serious. It seems hard to believe that this was ever the case, but heck, it was. After the ERP wave, or at the tail end, execs realized that their new ERP implementation was as lithe and active as a whale shark, lumbering through the ocean.

To justify the incredibly expensive ERP license, made triply painful by gangs of semi-permanent buttoned-down consultants, companies had to (1) sell more product - which led directly to the CRM wave - software that let support and salespeople delight callers with reams of personalized information, while powering the transition to outsourced call centers and (2) practice Supply Chain Management, which promised a time-constrained glass pipeline of inbound materials, hopefully procured by dynamic auction; work in process, and finished good logistics, plugging into CRM, after all.

Meanwhile, simple web-aps with clear focus proliferated - track a package, check a movie time, buy a book, rent a movie. These were consumer-oriented, but the fact is everyone is a consumer, even at the office. While the ERP and Application providers became web-enabled, or B2B ASPs, some more so than others - these pureplays dancing at the feet of the big 3 software giants still lacked the element of simplicity; that's why they mostly have vanished, totally forgotten, in fact the bigger they were, the harder they fell - the business problems they were supposed to solve either weren't so bad, or could be solved in cheaper ways, and the giants descended into their growth plane and used up all the air. Maybe it is OK to let production planners circulate schedules via emails and spreadsheets (or wikis today).

Infinite Scale:

But, the Supply Chain challenge hasn't gone away. This is because of the problem of infinite scale. Due to the power of technology, the limits imposed by the constraint of diminishing returns, which stalls growth, keep getting pushed out further and further. The strategy and Execution need to be increasingly efficient and dynamic. Where Harvard and Berkeley theorists (HBR and Calif. Mgmt Review)foresaw "21st Century Network Organizations" in the latter 1990's - now, after the "end of software" (c. 2002) came and went - they are really here. But, rather than a model based on optimization of known inputs, crunching arrays of variability factors; what's needed is simplicity - back to the age of basic web aps in the nodes of the network, connected by instant messaging. So the efficient supply chain looks more like a social network today, and much less like a black box that spits out predictions. Effective SCM has to address the Infinite Scale Reality...

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