Industry Updates

Who Sits Where In The SCM Control Tower?

Written by Ken Kinlock
Published on Friday, 10 May 2013
flight controllerWe recently wrote an article on Supply Chain Control Towers. Now, who is going to staff the control tower? Logistics was conceived by the military to get the right amount of supplies to the troops at the right time. Supply chain management takes a bigger approach of looking further back into the life of a product to its manufacture and even product design while integrating what were once thought to be unrelated disciplines: marketing and customer service.
The Global Supply Chain Forum has identified eight key processes that make up the core of supply chain management: (1) Customer Relationship Management (provides the structure for how the relationship with the customer is developed and maintained); (2) Customer Service Management (the company's face to the customer); (3) Demand Management (coordinates all acts of the business that place demand on manufacturing capacity): (4) Order Fulfillment (integration of the firm's manufacturing, logistics and marketing silos); (5) Manufacturing Flow Management; (6) Procurement (supplier relationship management); (7) Product Development and Commercialization (integrating customers and suppliers into the product development process in order to reduce time to market; (8) Returns.

In my first take at staffing the SCM Control Tower, I have Logistics, CRM, Demand Planning, Procurement and EDI/Electronic Commerce. I'm not far off the mark. I am covering all the "processes" that the Forum covers. In the Forum's approach, everybody still reports organizationally in their own "silo" and proper operation of the SCM Control Tower depends on collaboration among the silos.

A friend called me about my article and said he wanted the EDI/EC manager on the same level as the SCM manager. But he says EDI/EC "sits on all the floors " of the control tower. This corporation CEO who has an "Electronic Commerce Department" in his official organization structure, but half the time he is talking about it, he calls it his "EDI Department". He regards it as an important department and does not want it reporting to "Supply Chain Management" because it includes other functions too. It even does Managed File Transfer (MFT).

Why is it that some change efforts bring great results, while others flop? What do successful companies do differently?

Driving change in supply chain planning is like building a house. When you're done, it will provide all of the comforts of life – but not before you've built the foundation. The
foundation is critical to home-building, because decisions made in this step dictate the rest of the project – how big the house will be, whether it can support one story or two, the building materials that can be used, etc.

So a business process design is something we must do before building our tower. It is the blueprint for the tower. If you cannot describe the process on paper then you cannot successfully operate the tower.

But in a lot of implementations it doesn't work that way. Management knows there are problems, so the knee jerk reaction is to search for some technology. Come now, do you really want some outside vendor designing your tower around their system rather than the other way around? You will get great software, but it may not fit your business process. Here are some possibilities of what might happen: (1) You will try and do as much with the software as possible; (2) your new software will let you do your existing process, but you will have the same process flaws; (3) everybody wakes up and parks the software until you can analyze the business process.

In looking at the business process, ask questions: customers. suppliers, employees, other companies. Try a small pilot project.

After that, educate everyone. The folks who will actually run the new process, senior management, operations, suppliers, customers. NOW you can look for technology.

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