The Evolving Emphasis in Today’s Corporate Supply Chain by Deryl Emerson

International Data Corporation in Framingham, MA is a provider of market intelligence and advisory services for business executives.  In 2012, Simon Ellis from IDC wrote an article about the changing nature of Corporate Supply Chains from a focus on better planning and forecasting, to a new emphasis on speed and responsiveness, to react more quickly to changes in global demand.

Simon states that as supply chains become more complex, and global in nature, in an effort to reduce manufacturing costs through off-shoring to places like China, a detrimental by-product of this strategy is increased lead times.  The more complex, the more suppliers and locations, and the more global we become, often the longer the lead times are required, which can leave one vulnerable to sharp changes in demand.

Particularly in the global, recessionary risky environment that we face today, consumers are not only less loyal to brands, and more open to switching, but are also much more likely to curtail spending, or abruptly change their spending habits, in the face of increasing economic uncertainly, or in response to price fluctuations in materials, food, or energy.

Simon argues that this increasing volatility, and the accelerating pace of business, is pressuring manufacturers to be much more agile, and has elevated the importance of supply chain responsiveness over that of planning and forecasting, which become increasing difficult in today’s more volatile environment.

However, Simon also points out how “planning is evolving, moving from a disconnected set of individual activities, to a continuous business process essential to the performance of the supply chain.”  He further states “as best-in-class manufacturers take a more holistic view of their planning functions and integrate previously separate processes, they are seeing significant improvements in their business’ speed and responsiveness.”  In other words, in order to have an agile, responsive supply chain, you need to integrate your planning activities with your fulfillment activities, described as the forecast-to-fulfillment process.

Next, the IDC article compares the merits of a “best of breed” approach to supply chain efficiency, a strategy that would support a collection of leading niche software vendors, to that of a more integrated approach that would favor the larger, single ERP solution vendors, such as an Oracle or SAP.

“There seems little question that an integrated planning capability is likely to be more agile and have an inherently quicker clock speed than a collection of best-of-breed tools, and in 2012, we expect to see manufacturing supply chain organizations increasingly recognize the appeal of a more integrated planning stack as a contributor to speed and supply chain responsiveness.”

Oracle has developed an extensive value chain planning and execution suite over the past few years.  They not only continue to build out their core ERP applications in the areas of Manufacturing and Supply Chain, but they have also made some strategic, best-of-breed acquisitions, such a GLog for Logistics, and Demantra for Demand Planning, and integrated them into a complete suite of supply chain modules.

Per IDC, Oracle has one of the most comprehensive Supply Chain suites on the market.  With so many modules that comprise the total offering, it also gives a customer the flexibility to selectively choose the areas that will have the most impact initially, addressing their most pressing needs, and gradually build out a complete solution from end-to-end, or from forecast-to-fulfillment.

Those who delay, or address immediate needs with a more reactive, patchwork of ill-conceived niche solutions, will undoubtedly fall behind to those early adopters of a more holistic, carefully planned view of their overall business, as an interconnected suite of business processes that evolve and adapt to their changing needs over time.  Oracle is well-positioned to deliver this more holistic, integrated approach.