Why add another, specialized system when you already have on-premises enterprise, warehouse and transportation systems that are customized to just get things done? If you find your operations caught in the Red Queen’s dilemma — running as fast as it can just to stay in the same place — you might already know the answer.
If you don’t, and you’re looking to practice mass customization, read on and be wary of the biggest pitfalls of customizing and re-customizing an ERP-only solution.
In December’s Supply Chain Management Review, two A.T. Kearney partners cited three industry trends from their 2017 CSCMP “State of Logistics Report” that supply chain executives need to keep in mind for the coming year:
In response to market leaders seeking to future-proof their technology infrastructure, the global trade management software market, brimming with ERP, WMS, TMS and specialized supply chain solutions, is set to grow 11.42% from 2017 to 2021, according to research from Technavio released in October. Researchers cite one key challenge:
The use of manual or outdated technologies and the complexity of the global trading systems, which have different data and message formats, are obscuring the visibility into the networks of the supply chain.
Chipmaker Intel Corp., was smart enough to act on co-founder Gordon Moore’s 1965 observation of what came to be known as Moore’s Law: The number of transistors on an integrated circuit would double every two years, while the relative cost of computing would fall dramatically. This observation was a game changer for the high-tech industry, and affects all who invest in technology to this day.
Today’s digital supply chain lives in the cloud and within your four walls.
“Well, in our country,” said Alice, still panting a little, “you’d generally get to somewhere else—if you run very fast for a long time, as we’ve been doing.”
“A slow sort of country!” said the Red Queen. “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”
The host of risks is aggravated when trying to use incorrect technology solutions.
You risk losing sight of strategic opportunities, and getting stuck in the Red Queen’s dilema: working as hard as you can to fix these six operations pitfalls while merely staying in the same place.
1. Crashes and downtime
Heavily customized technology is more crash-prone, resulting in system downtine, operational downtime, operational downtime and impaired ability to satisfy your customers. Over time, increased pressure on IT resources, forces them to shift focus from core competences to infrastructure upkeep.
2. Increased costs
On-premise technology requires more ongoing maintenance whereas cloud-based solutions are tended to by a firm of specialists. This ongoing cost involves shifting IT efforts and focus from your growing your business to managing solution providers.
The bottom line is that outmoded technology will cost your business as, increasingly, collaboration and trust are required to engage in the profitable–and complex–customer relationships.
So maybe you see the value of augmenting your operations and taking a hybrid approach to mitigate unnecessary risk. How do you justify the cost of adding new technology to augment your existing solutions?
Evolving technology, consumer demand patterns and business models require you to manage risk and master change in an “anything can happen” business environment.1
In terms of information technology, Nulogy recommends that you maintain your current business systems for general enterprise and supply chain management and avoid resorting to “mods” or custom revisions your vendors cannot support. This will reduce a major source of risk. Next, augment those traditional systems specialized SaaS solutions that further address risk, provide management for evolving work processes and prepare your organization for success in an increasingly digitized, collaborative future.2
See how 3PLs, contract packagers and corrugators can win by combining ERP with cloud apps
Jason is a co-founder, CEO and brand ambassador for Nulogy. He is focused on corporate development, executive leadership, and understanding the evolving landscape of Nulogy’s clients. He is also on Nulogy’s board and speaks throughout the industry on the agile supply chain.