Supply chain of confusion is inevitable, not the expectation of the disappearance of chaos, but within the enterprise to build a tolerant and flexible response to the cultural chaos, maximize human factors.
Today's supply chain managers must secretly hope in my heart back to the era of Henry Ford.
Early 20th century, Ford Motor Company has established a vertical integration as a car production line. At that time, Ford's internal and external business environment in which much like today's so complicated, so trucks from input to output of steel, the entire process to make every detail of being in control of Ford, Ford do not have to worry about point of supply chain confusion.
This simplicity of a Ford-style and precise supply chain management has become commercial in the history of early memories. Business environment has shrunk. In the economic globalization today, whether it is low-cost overseas suppliers, or outsourcing the manufacturer's expertise, have become enterprises in the fierce competition in the desire to have a weapon. However, the cost of all this is that confusion and uncertainty in the supply chain is increasingly becoming the norm.
Supply chain nightmare
Confusion and uncertainty to the enterprise supply chain management has brought a great deal of risk, companies often will not have experienced the nightmare of supply chain disruptions. Once the supply chain disruptions, enterprise management will suffer huge losses. Gartner's research showed that one in five businesses will have a variety of forms of supply chain disruptions affected in the affected enterprises, 60% would close down in the end.
Even once the supply chain management applications with ease of Ford, could not escape the misfortune of supply chain disruptions. In 2002, Ford Motor Company's Land Rover has announced that it may have to suspend its four-wheel Discovery production because the chassis is the only supplier UPF-Thompson has been closed down bankruptcy. As an alternative supplier takes 6 months to put into production. Land Rover company no alternative but to advise the UPF-Thompson to provide huge amounts of money, let it continue to produce their own chassis.
As the outward extension of the supply chain, companies often have to manage a multi-level complex supply chain system. To a high-tech manufacturing, for example, usually have a contract in late assembly manufacturer, in the upstream, it will chip vendors and suppliers of printed circuit boards, in addition, it also has its own sub- sales customers. Therefore, a high-tech manufacturing companies often face a three to four levels of multi-level supply chain (as shown above).
If the companies tried to follow in their use within the enterprise to control the multi-level supply chain, he will encounter obstacles. Because they can not get accurate information on several other levels - process is not in your grasp.
However, the reality of market competition, asked for the companies on this multi-level supply chain to implement good management. This is a supply chain management challenges, if not access to detailed and reliable data, but also to control these processes. The key is to control how the supply chain confusion and uncertainty make the appropriate response.
Difficult to eliminate the black hole
To solve this problem, one to the high-tech help. Such as Web-based information exchange tool, SCM (supply chain management) software, RFID (radio frequency identification), and other means in recent years has been one widely used among supply chain management. It is hoped that these high-tech means to improve supply chain visibility and transparency, thereby reducing the confusion and uncertainty.
HP is a strong supporter of RFID, the company through the implementation of RFID in the warehouse while the benefit. HP's supply chain management, RFID plays a small but important role, it can be used to enhance asset tracking, improve the forecast accuracy of arrival time, and be able to effectively track inventory in the supply chain.
However, if you want RFID to help companies solve supply chain of confusion and uncertainty, that is unrealistic. RFID has its own technical flaws. Compared in terms of bar code, RFID can provide more data, but the bar does not arise because of differences in temperature and vibration, but RFID is affected by these factors. In fact, statistics indicated that the use of RFID can only control 60% of the inventory data.
Another aspect, leading to confusion in some of the factors in the supply chain has nothing to do with technology, but also the fundamental technical means can not be resolved.
For example, in the areas of retail and consumer goods supply chain, suppliers are always eager to look forward to sharing with the major retailers selling goods real-time information to make supply chain management.
But in fact, if you are such a retail giant Wal-Mart supplier, you should not expect Wal-Mart will share information with you fully, because a certain degree of information asymmetry on the Wal-Mart is beneficial It can take better control of its numerous suppliers. Retail supply chain there are black holes in varying degrees, which have had no systematic process control means were available.
"Tolerate chaos" of company culture
Since the supply chain is difficult to eliminate the confusion and uncertainty, then, is not to say that we are destined to taste the supply chain management failure? Situation is not the case. However, if people try to apply traditional principles of the process is bound to cause confusion, the failure will be inevitable.
To successfully manage increasingly complex supply chain system, one has to be "tolerated chaos (Chaos-Tolerant)" - This is a 2006 Gartner made a new supply chain management concept. The core meaning of the concept of the supply chain confusion is inevitable, not the expectation of chaos disappeared, but within the enterprise to build a tolerant and flexible response, chaotic culture, and to maximize the human factor .
For supply chain managers, they have no accurate information to be able to manage people. Do not obsessed with a perfect process. If you change a way of thinking, acceptance of supply chain management processes in the presence of confusion, then, although not 100% successful, but they will do better than now.
For example, in the clothing industry, and high-tech manufacturing industries, widespread multi-level supply chain collaboration. The most successful in this industry are often those who do not stick to lean manufacturing and Six Sigma, but rely more on system capacity of the human person.
"Tolerate chaos" of supply chain management and we often hear of flexible manufacturing, agile supply chain concepts have in common, but it contains a richer flavor.
"Tolerate chaos" means managers can not predict what would happen to the situation. We can of course occur in the scenario of the forecast, and develop countermeasures. However, as we are faced with a growing confusion and complexity of business environment, there are always unexpected things happen you. Develop response plans for anything, in theory feasible, but economically it is not feasible.
Suo Yi, in planning to develop responses to unexpected events in the same time, supply chain managers Huan Bu Debu do this: to give employees the ability to, enabling them to no provision and Liuchengzhidao in the case is not expected under the comfortable to deal with to interrupt.
To do this, companies need to establish a culture of learning organization to do. When employees encounter every time a kind of unforeseen circumstances, they should discuss with my colleagues in the pipeline. To establish a team within the company, whenever emergencies arise, the team can understand the nature of the incident, and have the appropriate experience and skills to provide guidance for specific employees.
Here, technical ability and have its uses. If the enterprise has the technical ability to quickly get the information managers fingertips, and there is a keen network can tell the staff what happened, then they can use less time to deal with emergencies.
Multi-level supply chain system
We are faced with a growing confusion and complexity of business environment, there are always unexpected things happen you. Develop response plans for anything, in theory feasible, but economically it is not feasible.
RFID in the retail supply chain applications