A collection of resources and commentary providing an introduction to supply chain management and related systems for students, practitioners, and anyone else interested in learning more about how to design, manufacture, transport, store, deliver, and manage products.
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
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
“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.
a)Increased the rate at which innovation happens
b)Helped discover greener and leaner ways of
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
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
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:
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
that have evolved over the past couple of years.
connectivity – from 802.11 wireless LAN technologies, cellular networks,
“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.
“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.
“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”4.
The question however
that come to mind is thatwith 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
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: