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Defending Scm Technologies: Delivers More Than You Think

Posted: June 01, 2009 by Ly Phan

Defending Scm Technologies: Delivers More Than You Think

In the current economy, companies are looking for scapegoats for why revenues are down or reasons for organization efficiencies. Technology is often that scapegoat, but SupplyChainBrain.com published an interesting opinion piece “Defending SCM Technology: It’s Not the Answer, but a Damn Good One” from AMR analyst Noha Tohamy showing why companies themselves are the culprits. Noha goes through a variety of scm technologies and discusses the positive impact they’ve made to the bottom line.

From Noha’s perspective, technology is the key to full visibility throughout the supply network and allows collaboration among different partners on a global scale. Thanks to the advancement of technology, companies can maximize their potential profit and optimize business operations. Without technology, even the best process and the best organization still have to give up the dream of a real-time visibility supply chain network.

Noha added - “In the foundational category, especially on the data collection and automation side, there have been many studies that attempted to quantify the benefits of EDI connectivity. More recently, connectivity over the Internet has been viewed as a less costly, more effective way to enable electronic trade. There are strategic benefits, such as a lift in sales or improvements in market share or order fulfillment cycle. The tactical benefits include a reduction in manual errors, number of faxes and phone calls, administrative headcount, and inventory, as well as improvement in cash flow.”

A company’s problems usually extend beyond technology and involve organizational and process issues. So when technology doesn't solve those issues and it’s not supposed to, it gets blamed for the organizational shortcomings. The reality is that technology has generated billions of dollars in ROI, but companies need to be willing to adopt it and have realistic expectations.

One particular paragraph sums it up nicely…

“Because of technology, we can now dream of building visibility across our supply network, collaborating with key trading partners, and optimizing our human resources and production capacity. Because of technology, we can figure out what's happening at our stores and, based on that, readjust our replenishment plans and pricing to improve margins and customer satisfaction. It is clear that the organization can only achieve the best supply chain process with the help of technology.” 

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