Tuesday, September 18, 2012

Week 3 Post - System Integration

The cost of innovation can sometimes be fairly high.  While reading about innovations in the supply chain management field I could not help but notice that many of them were technology based.  Companies were selling integrated supply chain tracking systems like sophisticated RFID systems.  What is generally ignored is the cost of implementation across the entire supply chain.  A new system might be fantastic at a specific that a company might own, but if the suppliers are not on the same system then, at the very least some efficiency is lost, and at worst additional cost are incurred.  To combat this Deutsche Telecom (DT) is requiring it’s suppliers to comply with their system.  The potential savings for DT are in the millions of euros.  Many suppliers will undoubtedly not be happy with the up front cost, but it should make the entire supply chain more efficient.  If DT is successful then forced integration might serve as a model for other companions.     


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