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Your Supply Chain Is Stupid

by Michael Nadeau

February 29, 2012

"Supply Chain Management created systems that are pretty dumb," says Lora Cecere of Supply Chain Insights.

Cecere made that comment during a panel discussion at the Strata conference yesterday in Santa Clara. Her point: SCM has some catching up to do in the age of big data and predictive analytics, including SAP despite its efforts in this area.

"Companies have been lulled asleep thinking that transaction data is the end game and supply chain is about efficiency," says Cecere. "Supply chain is about value." That view of the supply chain has paid off for some companies. During the economic downturn, Intel identified supplier risk using sensing technology on unstructured text. They deployed people to work with those suppliers to minimize that risk.

Cecere believes your supply chain system should be contributing more in these areas:

* Help you know what questions to ask. Most SCM systems today use only the data that's in the transactional systems. Unstructured data such as a weather report can tell you if a supplier is at risk.

* Test and learn. Can your SCM system look at market segmentation and adjust for your product portfolios?

* Make your supply chain safer. Two-thirds of all produce in the supply chain is thrown out before it is sold due to spoilage. Better use of RFID and temperature sensing can reduce the losses.

* Provide true supply chain visibility globally. This requires mashing up with external data sources.

* Be more secure. As events in the past few years have shown, your supply chain can be severely disrupted by severe weather, volcanic eruptions, or terrorist activity.

Many n ew companies now offer technology to improve each of these areas, but Cecere cautions businesses to stay focused on their needs when dealing with them. "It grinds my grits when startups want to talk about big data and I want to talk about problems to solve."

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