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How Can We Eliminate Barriers to Supply Chains?

Supply chains are emerging. We can aid in their emergence and assist in their architecture. Or we can wait until they are upon us and we have lost our competitive edge. The following ideas are designed to help us be the architects.

Sharing Data

The ANSI X. 12 standard for electronic data interchange (EDI) is a good place to start a supply chain. The EDI

standards allow companies to exchange information about inventory, schedules, orders, invoices and so on. Many associations have sponsored the development of standards beyond the basic ANSI X.12 series that are specific to a given industry. This provides a level playing field from which companies in a supply chain can share data.

Like our example of the two co-workers above, however, EDI represents the lowest common denominator in infor­mation sharing. To move to the next level—a step that I believe must be taken—will require techniques for identi­fying shared data and for designing systems to facilitate interfacing systems throughout the supply chain network. These techniques are combined in a series of five funda­mental principles contained in a body of knowledge called Business Information Technology Deployment (BITD). The five BITD principles (see Table 2) define, in broad terms, how information systems must be designed in order to support, among other things, effective supply chains.

Implementation of BITD is not easy.11 One task is to define key data elements for the supply chain. Then, using a technique called "the grammar of data," a normalized data set can be defined. Another technique is to create Business Process Maps (BPMs) of critical processes. Business Process Maps include not only the key steps in a process, but who performs them and what informational resources are required to complete the task. Creating Business Process Maps can help organizations within the supply chain identify informational and other resources that should be shared.

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Working Together

Creating a Business Process Map, or any other effort in which multiple companies are involved, will require skills in working collaboratively. These skills, unfortunately, are hard to find. We have learned our lessons well: watch your back side, don't be the first to trust, avoid divulging too much. Collaborative work requires us to be open, to have faith in our working partners, to treat others as we would wish to be treated. This is a new paradigm of business and will take time to adopt.

Table 2. Business Information Technology Deployment: Five Fundamental Principles

1. The Business Information Technology System must model the organization it serves.

2. Data stored within the Business Information Technology System must be normalized.

3. The Business Information Technology System must automate and informate the organization's processes in such a way that adherence to desired procedures (and thus accurate and timely production of data) is achieved.

4. Access to the Business Information Technology System's data must be deployed in such a way that information is easily produced to answer all questions, both known and future.

5. The Business Information Technology System must be designed in such a way as to anticipate and facilitate changes as the organiza­tion evolves and the organization must develop its individuals so as to facilitate their ability to adapt to and exploit these changes.

To begin learning how to collaborate will necessitate each of us learning skills in group dynamics. Organizations that are using self-directed team principles will have a jump start here. Where individual corporations each have their own executive officers, supply chains have no single boss. When companies meet to form supply chains, the individu­als involved will have to be adept at getting things done when no one is in charge. This requires a sensitivity to the needs of each party, the ability to identify strengths and weaknesses of each member, and a knowledge of how to forge a team out of a disparate group of individuals.

One vital element of this effort will be the articulation of a vision for the supply chain. I often use the analogy of a lighthouse: a lighthouse on the coast helps ships steer safely toward their destination. When the seas are rough— just as they are in the global economy—a lighthouse keeps ships on course. A shared vision will keep the formation of a supply chain headed toward a common destination, even when there are disagreements.

Since the global economy will certainly throw corporations from different nations and ethnic backgrounds together, understanding of other cultures must not be overlooked. The better those working to forge supply chains are able to understand the cultures of their fellow workers, the smoother the work will go. Thus people who are multi-lingual and who can adapt to other cultures will be at a premium. Wise companies will assist their people to develop these skills.

One other area needs to be mentioned: the legal require­ments to support supply chains. The legal profession has not been noted as an architect of collaborative agreements. Supply chains will require a sharing, rather than protec­tionist, philosophy. The global economy will present an opportunity for attorneys to assist in the creation of equi­table agreements in which resources (including resources such as information and expertise) are shared between companies in the supply chain.

Looking Forward

Supply chains won't happen because they are the latest idea. They may not even be known by that name. But there will certainly be some form of macro structure in the global economy that organizes corporations as we know them today into affiliations integrated by a common business purpose of adding value alongthe chain from raw materials to the end customer.

Supply chains require that we become much better at doing some of the things we already do. They will also require that we learn how to do some new things that we are just beginning to recognize. The coming years will be exciting. They will also be profitable for those who learn first how to create supply chains and to eliminate barriers to the integrated global enterprise.


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