Solutions for Supply Chain Woes

Does your supply chain performance need a shot of adrenaline? Business performance management software can be a big help.

If you get the feeling your supply chain processes present a major challenge for performance improvement initiatives, you're not alone. Even companies that approach this challenge armed with business performance management (BPM) software often fail to make much headway.

Part of the problem is the complexity of the supply chain management (SCM) function, which encompasses highly diverse activities including, for example, sourcing, inventory management, distribution and returns processing. Information exchange between SCM's various domains tends to be minimal, and the function's goals are often isolated from overarching corporate objectives. In addition, large companies have to manage multiple supply chains.

For BPM tools to make a difference, companies must first break some old habits.

Doing It Backwards

The most common mistake organizations make when they try to improve supply chain performance is to go about it backwards. Instead of beginning with the demand side, they focus on the supply side.

Demand translates into customer preferences. "It's easier for companies to focus on the supply side first and not address customer relationship management [CRM] issues, and that needs to be turned around," asserts Jeanne Baker, vice president of technology at Sterling Commerce, an SCM software provider in Dublin, Ohio. "Without customer-based practices, your internal customer database may be flawed. Companies need a 360-degree view of their customers. If you're a capacity-driven company, you'll have higher supply chain costs because you never end up figuring out what the customer wants."