Here are some numbers to chew upon. According to Cleo customer survey in 2021:
- 90% companies said having end-to-end process visibility was important for their business.
- 88% companies admit they lost orders
- >50% said they lost more orders in 2020 than in the previous year.
Even before COVID, supply chain integrations were notorious for their complexity and challenges which pop up. With the increased focus on this domain over last 2 years, especially for gaining visibility across & deep into supply chain partners, these issues have been brought to the forefront of the discussion table. This is also highlighted by 2022 survey from ASUG of SAP users, where 78% of the users indicated high or extremely high value from integrations.
Recently, while working with a few customers to integrate their supply chain operations I worked closely with the business partners, applications, technology, infrastructure, and people challenges that pop up during these initiatives. The occurrence of these issues is common that made us (integration SME’s, architects, supply chain managers, infrastructure teams and security etc ) wonder why so many of these initiatives fail to achieve their goals. Here are the key points:
- Value of integrated Supply Chain > sum of the independent parts
- Detail matters (in each of the layers of business, people, application, technology and data). A lot.
- Its not a plug & chug formula, the vision & approach defines the impact achieved.
Lets elaborate each of these a bit more.
Value of whole > sum of parts: Most managers, while estimating the complexity & timeline logically use the delta method, ie, what is being done currently Vs what needs to happen in future and add up the deltas to plan the overall initiative. Actually, lot of them use Excel based formulas to estimate, plan & even execute these initiatives.
While it works for other domains, the very nature of supply chain integrations demands that a clear vision of the to-be state is articulated upfront, to achieve the proverbial whole is more than the sum of the parts.
Detail matters: Supply chain integration is about details, details & details. At some point in time, the integration team will not only have to grapple with partner contracts, process alignment, data model mismatches but also techie topics like SSL / TLS, data center / cloud hosting, firewalls, encryption / PII compliance. While jumping to execution phase is tempting, focusing on these early in the design phase prevents these from becoming a showstopper, costly rework & wait times for interdependent teams. If 3rd parties are involved (as they will be in any integrated supply chain), then factor in extra time as they will be driven by their own SLA’s & contracts. Did I mention details? Its all about details.
Its not a plug & chug formula, the vision & approach defines the impact achieved:
Integration is still 1 part an art & 2 parts science, or a some ratio of thereof depending on the context, client & the changes being done. The key point is: its not just the formulated logically from the components and the approach does define the end result.
While there are components which can be used off-the-shelf and templatized integration codes, the vision & approach taken to achieve it matters significantly. In fact, usage of no-code tools, API, cloud infra & security mechanisms, common data models and industry alliances have all reduced the technology effort though configuring all of these components to work in tandem does require specialized design skills and implementation expertise.
Finally, for those who are still curious why high schoolers will have a better method for this complex business issue than the MBA managers: remember high school level differential calculus Vs integral calculus?
Quite simply, differential calculus measures the rate of change & is intuitively understood and measured using high school formula.
[eg, we all know that speed = (difference in position)/ (difference in time) ]
But the integral calculus measures the area / volume under a curve, so is not easily formulated & the approach taken defines the end result. As any high school math student knows, latter takes template matching to formulate it and here in lies the key.
So next time some managers says why supply chain integration is so hard, you can tell them that “It is Newton’s law“!