Monday, February 17, 2014

Supply chain gets a facelift

The readings assigned for this week discuss the surging need, dependency and focus of companies on web and technology to integrate their supply chain in an attempt to reduce waste and maximize production efficiency.
Therefore, some of the factors paving way for a company’s success are the malleability, adaptability and durability of its supply chain. A company that is successfully able to eliminate unnecessary activities from its production process saves time, money and helps reduce errors, which gives it the competitive edge required to capture market share. As demonstrated early on by Ford and then Toyota brining us the Toyota Production System (TPS), laying foundations for today’s Lean manufacturing.
However the concept of waste elimination to me seems to be a relative one. It highly depends on methods, mediums, resources available during a given time frame. To elaborate, let’s for example take Moore’s law which states:
“Over the history of computing hardware, the number of transistors on integrated circuits doubles approximately every two years”
Moore’s law provides evidence on how technological improvements and demand have worked their magic in the computing industry. Research and development have allowed personal computers to have an integrated GPU as well as a processor on the same die, operating at lower heat levels and yet yielding high performance. (Intel 4xxx Haswell series and Iris pro graphics). So my point here is that an innovation that might seem perfect at the time of launch i.e. no improvements are fathomable, would be obsolete the next day with better, safer alternatives replacing them.
Source: Intel[1]
Source: Intel[2]
So essentially technology has:
a)      Increased the rate at which innovation happens (catalyzed innovation)
b)      Helped discover greener and leaner ways of achieving results
c)       Caused prices to fall more rapidly, making innovations accessible to a wider audience
However, improvement in production techniques, materials and resources demands the supply chain to be at par with the speed at which products, players and industry trends are evolving. With more and more players jumping into the market, the pie is getting smaller and smaller as manufactures wrestle for a share of scarce resources. Jumping onto the bandwagon requires efficiency and swiftness in meeting customer demand on time.
After all, what good is a product that nobody has when they need it?
As the articles assigned this week rightly point out that technology has catalyzed the decision making process so much that companies are forced to shift their attention towards ensuring integration throughout their system and be up to date at all times.
Most successful supply chains today have gone digital, equipped with automated systems sending out signals and prompts to suppliers e.g. Walmart or Amazon. The digitization of processes that replaced manual records with terabytes of data which once considered as archives then began coming under immense scrutiny leading to all sorts of analysis to determine trends and market behavior transforming from junk to treasure. However, until more recently companies have started to track and analyze data in real-time developing systems that help determine current scenarios as well as predict future shocks.
Manufacturers today continue to reduce the information gap, striving to integrate all their systems together, working with their suppliers to achieve synchrony.
Why? Because supply chain for a company is like blood flow for the body, if it is hindered at any point, the whole body is affected.
Here is a diagram that provides a rough outline of an integrated supply chain ecosystem for a company today:
Source: Alexis Barlow (2011).[3]
Just to get a brief overview of what innovations have catalyzed this integration, let’s briefly go over a few examples for the top 10 supply chain technologies[4] that have evolved over the past couple of years.
1. Comprehensive connectivity – from 802.11 wireless LAN technologies, cellular networks, Bluetooth
“Stanley Steemer, a carpet cleaning franchise, automated route operations at two branches with mobile computers with integrated wide-area wireless connectivity, GPS and a magnetic stripe reader to process credit card payments in real time when service was completed. Dynamic dispatch enabled by the GPS and real-time two-way communication enabled Stanley Steemer to improve efficiency enough to eliminate a full-time dispatcher position at each branch. One location is saving between $300 and $700 weekly in overtime, and both branches have greatly reduced time required to complete and process paperwork”­4.
2. Voice and GPS communication integrated into
3. Speech recognition
“Lighthouse for the Blind, a non-profit organization in St. Louis that trains and employs non-sighted workers, improved its warehouse picking accuracy by 25 percent with a new speech recognition system. The innovative system includes audible confirmation of picked items, enabling blind workers to accurately pick orders”4.
4. Digital imaging
5. Portable printing
6. 2D & other bar coding advances
“The U.S. Social Security Administration (SSA) implemented RFID systems in a warehouse to track inventory and facilitate more efficient shipping to branch offices. The SSA realized a 39 percent productivity improvement and $1 million in annual savings. An additional 70 percent labor savings is expected”. 
9. Remote management
10. Wireless and device security
To learn more Click here for the complete article
The question however that come to mind is that with exponential data growth and rising importance on analysis and mining, do you think that we would soon be running into storage concerns? Building data farms or graveyards and falling prey to cyber-attacks?
When the PlayStation network got hacked as well as Target’s fiasco, both companies lost private customer information, though in the right hands was useful but wreaked havoc in the wrong hands.
Lastly, where are we going to redraw the privacy line?
One thing is for sure, improvement in technology has surely benefitted security providing agencies who have built upon this resource to effectively manage scrutiny. The FBI built a unified digital database to complement its work by integrating similar agencies together to reduce time required information flow. Through this database they were able to generate instantaneous reports and update stakeholders in real-time. On the downside large tech giants like Apple and Google were found to have granted access to the NSA to monitor user cellphone activities.
Even if we remove the eavesdropping element, companies in an effort to match consumer behavior tend to track every possible information available to them. The use of RFID’s, real-time visitor flow generation in stores and mapping online browsing trends all draw us to the same question. Are we becoming trapped in the web we created?

[3] Alexis Barlow (2011). Web Technologies and Supply Chains, Supply Chain Management - New Perspectives, Prof. Sanda Renko (Ed.), ISBN: 978-953-307-633-1, InTech, DOI: 10.5772/23018. Available from:

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