The Top 5 Threats to Delivering the Intermodal Promise – Part 2

13 09 2011

By Cento Sharp, Cento Sharp Consulting

Cento Sharp#1 – Lack of Technological Innovation

As today’s supply chains become more complex, so have our information technology systems and paper-based processes. The requirement for collaboration among geographically dispersed trading partners, local governments and customs agencies will continue to choke productivity out of our global supply chains if the speed of supply chain technology is not put into overdrive.

In this week’s blog we examine the technology-based issues that the global supply chain faces. We take a look at this area because it is the obvious area of concern that the industry has already taken aim at.

The Chief Executive Officer of Maersk, Eivind Kolding, has received plenty of praise and scrutiny for his visionary call for improved technology and integration among transportation carriers and his or her customers.

http://www.joc.com/container-shipping/changes-asked-maersk-ceo-will-take-years

There is no shortage of technology vendors, platforms and systems in the supply chain. There are Transportation Management Systems, Enterprise Resource Planning Systems, Manufacturing Execution Systems, Labour Management Systems and the list goes on and on and on. With so many technology vendors and so many IT systems, why is the global supply chain so inefficient and more complex for smaller shippers than ever before?

Supply chain

The answer is simple. Technology management without business process management is useless. The way the information technology and project management industries evolved help tell the story. In the late 1990s, project management was considered a quality that every business manager had. This was absurd, as most companies soon realised! As more disruptive technologies such as the internet and EDI (electronic data interchange) evolved and invaded corporations, business managers were continually exposed for their inability to manage ambiguous initiatives, goals and tight budgets. The most egregious offense by middle managers was their inability to motivate and engage resources that did not report to them on the corporate food chain.

So, technological innovation may look very robust in the global supply chain because there are hundreds of vendors and systems to match, but there is one fatal flaw that our industry has yet to address. Business process management is the missing link.

Yes, there are large organisations that have fully adopted six sigma and lean operations, but 98% of supply chain organisations are outliers with far less formal operations. Smaller shippers, freight forwarders, trucking companies and manufacturers either do not fully understand the benefits of business process management or believe in its long-term benefits.

Until the major industry players focus less on forcing their smaller trading partners to comply with their advanced technologies and focus more on helping them to improve their operations, the global supply chain will continue to hobble on.

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