Strategic Supply Chain Management - Supply Chain Online

62 Strategic Supply Chain Management
not be justified. By standardizing components to a greater degree, Motorola
was able to greatly improve flexibility and sharply reduce inventory obsolescence
and rework costs. 7
Process and Systems Inconsistency
A third driver of complexity is inconsistent processes and information systems
throughout the supply chain. We often find that different locations
within the same company have different, incompatible processes. Even
when the same software package is installed, it’s often configured differently,
in keeping with each location’s process. Inconsistency can result
from acquisitions, but more typically it arises because companies are simply
not aware of the benefits of a standard
Inconsistency can
result from
acquisitions, but
more typically it
arises because
companies are
simply not aware of
the benefits of a
standard process
architecture.
process architecture—or haven’t invested
the resources needed to create one.
When different locations have different
processes and systems, the company loses
speed and efficiency and is less able to leverage
knowledge across the organization. And
each location means added investment and
maintenance costs. Inconsistency also creates
inflexibility. Work can’t be transferred
among locations as demand shifts because
each site works differently. Moreover, crosssite
leverage in terms of shared back-office
activities, such as strategic sourcing, is
harder to achieve. Finally, process and information
inconsistency makes it difficult to
integrate with customers, suppliers, and
other business partners.
Overautomation
The emergence of decision-making applications for supply chain planning
and performance management has led to a new driver of supply chain
complexity: overautomation. Overautomated processes are difficult to
manage because the people who use them don’t completely understand
how they work. Without this understanding, users can’t judge the quality
of their output or improve their performance.
Supply chain planning tools offer powerful functionality, but rules
and algorithms need to be selected carefully, for these systems contain far
more features than are needed by most organizations, with some func-