2C) Supply Chain

Screen Shot 2013-06-10 at 6.41.43 PMFor whatever your organization does, what is the supply chain?  From inputs to outputs? This is the engine that fuels the results of the organization. If you are non-profit taking care of babies, then what donations are coming from where, how is the organization processing those donations and then how are they being distributed? If you make something, then what parts and services are required to generate the output that you sell? All organizations have these processes and as a new CIO, one needs to get their arms around those processes and how IT is supporting the ‘chain’.

Related, the reverse supply chain also needs to be understood with the same questions asked and answered. The reverse supply chain is for items being returned for whatever reasons.

In some cases, the phrase Order to Cash(OTC) is used is relevant as it covers everything from orders being placed through receiving cash(or equivalent) back from your customer.

Questions that should be considered and reviewed:

  1. Prioritization of Projects: How are your business partners prioritizing what they need IT to do and how is the relationship with these partners? Does the business have a collaborative partnership with IT to get things done?
  2. Shadow IT: Is there an out of control shadow IT needed by the organization to be successful? If so, why? Are there IT components being sourced, paid for and installed by the business independent of IT? If so, why? In these cases, the IT leadership needs to work on better collaboration and partnership with the business. Typically these things are being done because either a) someone in the business wants to be in IT or b) the business is just trying to get their job done. In either case, a conversation and fresh start is needed.
  3. 3rd Party Collaboration with Suppliers and Customers: What is the strategy and what tools/processes are in place to tie your extended supply chain together? Are things like co-planning being done where customers are sharing their future needs with your organization and if so, how and what tools are involved and how healthy are they? Just as your organization might want better visibility with customers, you must do the same for suppliers. Be the customer you want your customers to be. How is IT facilitating the ease of doing business? Perhaps visit with some customer or suppliers directly. Here is a post from InformationWeek that addresses the collaborative supply chain strategy.
  4. Signaling and Metrics: Does the organization have the level of signaling and measures in place to have full and deep visibility of the supply chain? Visibility needs to range upstream in suppliers and downstream to customer warehouses. Are there dashboards in place? Are there analytics about the health of the supply chain that cover logistics, warehouse inventory levels, order status, etc.?
  5. Security of the Supply Chain: How are you securing the sharing of information between suppliers and customers? How are you securing plans, drawings, IP, etc. And don’t forget to think about the business continuity capabilities of your suppliers. Don’t assume anything.
  6. What else? Your business is unique and are you appropriately looking at those unique aspects too? For example, if you have sub-components that need very long lead times to produce, then how good is your forecasting processes and tools? Long lead times likely mean you have to order things before you might have real orders in place. Do you have those thoughts well underpinned?

Your organization is unique so don’t assume what others do or say is the right answer for you. And certainly don’t assume just because a big software vendor wants to sell you something because everyone is doing it doesn’t make it right for you. I’ve learned that lesson myself.

What else?

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