Manufacturers take a new approach
Thursday, September 1st, 2005The August edition of Managing Automation has an extensive article entitled “The Up and Down World of Enterprise Apps.” The article contains an interesting quote from Lora Cecere, research director at AMR Research that says: “This [SCM] market was never supposed to be about big bad optimization engines. It was supposed to be about results, but the whole space somehow lost its way.”
We’ve long felt that operational business processes based on supply chain planning optimization technologies are ill-equipped to deal with the day-to-day realities (i.e., ever-present changes and increasing volatility) of today’s market. The problems commonly found within the supply chain are difficult to resolve with black-box solutions that don’t allow you to consider the necessary human decisions required to resolve issues. These solutions are batch oriented (often taking hours to run through a full cycle), making them inflexible and unresponsive to changing conditions.
As a result, other measures are taken to improve responsiveness, including; manual operations (usually a strong reliance on spreadsheets) and practices such as carrying safety stock, expediting orders and maintaining excess capacity.
The result has been that it has been very hard to realize enterprise-wide supply chain efficiencies and results.
