Integrated and Changeable - How to Flip Two SCM Mountains

In my opinion, the implementation of the SCM system is much more difficult than the ERP system. The supply chain is a natural product of economic development. It represents a natural evolution of the individual economy to the group economy, while the chain economy management complexity is much higher than the monomer economy.

The chain economy means first of all socialization, while socialization means difficult and high-level changes, or further, the chain economy is full of uncertainty. Although the SCM system is full of temptations for the enterprise, everyone tends to wait and see.

One fact is that there are many large-scale commercial enterprise systems in the country that remain in the DOS era and do not upgrade to SCM systems.

It's not that these companies don't want to go up. They don't dare to go. Actually, today's Chinese companies have been different from the past. For them, the real new things are not quite the same. It is not that they do not know but that they cannot bother. They can't do it. SCM is no exception.

From a large perspective, the supply chain mainly includes: planning, procurement, manufacturing, distribution and return. These five parts all have qualitative and quantitative theory and practice, and Chinese companies can't live without this one or two.

However, it is the variables in these parts that are enough for our entrepreneurs to "change their colors." I do not know how many companies come with confidence and squatted their heads away.

In front of the implementation of the SCM system, there are two large mountains that are "integrated" and "variable". These two mountains are also the fundamental reason why most enterprises in China are unable to decide whether to go to the SCM system.

Integration

The SCM system may be the most piecemeal software combination in all software. The previous section mentioned the five parts of the supply chain. Each part consists of many specific businesses, and many businesses have their own software. Many large vendors have tried to combine different software packages, but no one has succeeded. To integrate different pieces of software together, most of the time is a nightmare.

Perhaps the best way is to divide supply chain software into two categories: SCP (Supply Chain Planning) and SCE (Supply Chain Execution). But in fact these two parts can not be split separately.

The magic of SCP is to use precise mathematical operations to help improve the flow and efficiency of the supply chain and reduce inventory. The accuracy of the SCP is completely dependent on information. As a manufacturer of consumer products, don't expect your planning software to be accurate if you can't get retailer's accurate, up-to-date customer order information, retail store sales data, production capacity, and delivery capacity data.

But to get this information and data, companies must learn how to effectively integrate disparate software.

The goal of SCE is even higher. It wants to automate the various parts of the supply chain. They can be as simple as sending electronic orders from a manufacturing plant to a supplier for raw materials.

But this is a system that uses instructions throughout the entire process, and no one's software can automate its own instructions throughout the entire supply chain system. Because the supply chain system is often not a single system, but a heterogeneous heterogeneous system.

It can be seen that the SCM system is composed of a large number of cross-system information, data, instructions, and complex operations. These systems include: e-commerce websites, procurement systems, production systems, logistics systems, etc. If it is not possible to establish a solution that integrates all relevant systems, the SCM system cannot be built.

changeable

The changes in the supply chain are amazing.

The supply chain is produced because of the demand for competition, and the essence of competition is change.

Take price as an example. If the price of NEC mobile phones sold by Dazhong Electric has changed, it will generally not exceed 3 days. The price of Gome will immediately make a corresponding price adjustment, and this price adjustment does not mean that it is simply Change your own quotation.

This means that NEC must be given higher concessions to resist the risk of falling profits. The achievement of this goal may require the coordination of many departments. These synergies may require action instructions to be communicated in multiple systems and require tracking. .

Similar changes may be fatal to the SCM system. For the ever-changing business environment, SCM systems tend to be like a young old man who simply can't respond to the company's changing management strategies and business process requirements.

According to my experience, the fear of “change” is the biggest reason why companies do not dare to go to the SCM system, and the requirement for “integration” is still second. But in fact, these two demands are twin brothers and they are inseparable.