See things clearly

Understanding data flow in the supply chain

Oracle recently published a market report, The Fragmented Supply Chain (pdf), which examines how well British businesses are "able to communicate information across the supply chains, as well as within their own companies."

The independently researched report interviewed 100 supply chain executives from UK companies with more than 250 employees, across a range of sectors.

The conclusion of the report is that "the flow of information is fragmented to varying degrees and that significant financial gains could be achieved if improvements were to be made."

The research shows that different sectors place varying emphasis on different types of information, but generally, accurate and timely information is needed for Customer orders, Product shortages, Missed deliveries, Suppliers product line issues, Inventory levels, Price changes, and a few others.

Managers have to deal with 'complex and multi-tiered supply chains' (averaging 4 'significant tiers') and the flow of information through these tiers is critical to managing an efficient supply chain. However according to the survey over 90% of managers at all levels still use spreadsheets to analyse and keep track of changes across their companies' supply chains, a very time consuming and costly process.

The research found that there were a number of reasons for the fragmented flow of information [data] across supply chains. The main ones being:

  • volume of information
  • information is held in isolated silos/multiple databases and spreadsheets
  • constantly changing supply chain
  • complex nature of supply chain
  • knowledge of supply chain and key processes is owned by specific individuals
  • large amount of work digesting and analysing information

The main consequences of fragmented supply chains are:

  • Limits on productivity
  • Reduced competitive advantage
  • Longer product lead times
  • Missed sales opportunities
  • Customer dissatisfaction

One third of the respondents agreed that supply chains were so disjointed that a physical product travels as fast or faster through the supply chain than the information related to it.

Regular readers of our posts will recognise that this is the point at which we come in with a "brilliant bit about OBASHI". Normally, we have to put some thought into making the connection seamless and ensuring that our points flow well, but this time, Andrew Spence, Oracle's Supply Chain Development Director has done it for us. He describes information management for many supply chains as not reflecting the way organisations operate today,

"Companies are working with systems set up and designed for an environment where a lot of work is done within one company, rather than the vast network of suppliers, designers and partners that is the reality of modern business."

The problems in Supply Chain Management are much the same as in other areas of business. Different people, from different areas, with different skill sets get flung together to try and make things happen, without a shared understanding of what the current situation is and what they have to do to deliver the desired future state.

So, what to do?

You could build an OBASHI B&IT diagram exclusively for your Supply Chain Management operation, which would clearly demonstrate the people, process and technology, both internally and across partners, that you need to make sure the right products get to the right place at the right time. Not only could you output that B&IT to ensure all key partners have the master in front of them, if you were using the enterprise level edition of OBASHI software you could ensure that they all had real-time access to the system, enabling shared understanding and standard ways of communicating, instantly.

OBASHI is universally useful: it gives you the big picture of how your business works and helps you understand how data flows through your (and your partners) people, process and technology in every part of your business operations.

If you don't understand how data flows, you won't understand how your product flows.

I'll leave the last word with Andrew

"People are using spreadsheets and email to bring together disparate planning systems instead of a system that matches the 21st century requirements for collaboration across the supply chain."



Views: 1515

Comment by Daragh O Brien on May 19, 2011 at 17:29

It is worth bearing in mind that the Court of Appeal in England and Wales not so long ago effectively told a large utility company that it didn't care if there was fragmentation of data systems and data didn't flow. The legal position in England and Wales (which is persuasive in Ireland, Northern Ireland, Scotland, Canada, Australia, New Zealand, the US etc. etc.) is that if a piece of information is held in one part of the organisation which should have been known to another, the Court will imply that that knowledge was held by the entity as a whole.


The "Computer Says No" defence will not succeed.Here's a post I wrote about it a while ago


So it is imperative that organisations understand their data flows, find and remove bottlenecks, and ensure quality of information and processes.

Comment by Fergus Cloughley on May 19, 2011 at 23:21

Thanks for the link Daragh. 


I think we are going to see a sharp increase in the number of legal cases re data flow outages etc. It will be interesting to see what, if anything, comes out of the eg8 Forum next week in terms of legal obligations for cloud/internet/data etc


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