Keeping up with supply chain technologies and trends

This is a section title in Are You the Weakest Link in Your Company’s Supply Chain? (subscription required), an article in HBR Sept 07. The article attempts to raise the profile of Supply Chain Management amongst CEOs by arguing that, when done right, SCM is a source of competitive advantage.

They give a range of pointers on how to do Supply Chain Management right, for example:

  • Ensuring that supply chain leadership has real supply chain expertise,
  • Adding supply chain insight into business planning,
  • Balancing short term and long term views,
  • Taking advantage of modern technology.

On the subject of technology the authors argue that whilst good implementations of technology can make a positive contribution to supply chain management, many companies make unwise investments in technology. Therefore:

A CEO who understands new technologies can play the important devil’s advocate role by challenging the business case for technology adoption. Most firms that have bought leading-edge supply chain systems acknowledge that they use only a fraction of the software’s functionality and an even smaller fraction of the promised capability. An attentive CEO can lend authority to the change-management process, helping to foster user buy-in and making certain that proper vendor support, adequate training, and other resources are in place.

Moreover, CEOs who fully appreciate the challenges of deploying complex and costly systems can help their companies avoid classic missteps. The CEO of an industrial equipment manufacturer admitted that her company into one such classic trap: “we spent $18 million getting an ERP package up and running in our company, and all we did was bring more modern technology to bear on supply chain processes that are 40 years out of date. I expected this technology to bring supply chain costs down dramatically, and nothing has changed. My mistake was expecting technology to solve a process challenge.”

I love this quote and couldn’t agree more with the sentiment. But I suspect that readers might go away underestimating the significance of change management issues when implementing new software. Users are very likely to resist the imposition of new supply chain technologies. Encouraging buy in and user adoption takes a lot of attention from the top. A lot. For your software implementation to succeed, at least with the kinds of software package around today, you will need plenty of leadership attention and energy to overcome user resistance.

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