Technology and Sustaining the Supply Chain

Spend Matters welcomes this guest post from Santosh Reddy, of GEP.

Technology has come a long way in supporting everyday things, automating, simplifying and just making things easier to get done. That applies to the world of supply chain management as well, with ERP systems becoming friendlier and faster to use.

However, practically every breakthrough we have achieved still requires connection to the Internet or a server. This works fantastic and makes things near real time in terms of execution and updates, but only in the developed countries and a few developing ones with the appropriate infrastructure. Options are still very limited for most developing underdeveloped countries.

In my recent meetings with few clients, I came across business scenarios that demand even more from the world of technology.

Fast and steady access in far flung areas like in the middle of the ocean or African nations troubled with revolutions or civil unrest have a disrupted availability of connectivity. It is also likely seen as troublesome to own a computer and related infrastructure, since areas such as these do not boast of proper security.

So how does one go about solving these problems? My question to my clients was, what are they doing now?

The answer was a little less than what I was expecting. They were using paper and post in most cases, followed by slow internet connections that connected to them to an ERP system. The latter felt better for a moment until they realized over the years accessing ERPs is demanding on the bandwidth, so most clients developed custom forms to interface information into the ERP. Some of the issues brought up by clients are applicable to developed nations, as well, particularly when suppliers are brought into context.

We had a healthy discussion with one client that captured the viewpoint of their employee base and suppliers who might need access to an ERP tool. This was on the back of a demo of SMART by GEP, GEP’s proprietary procurement software. While there is still a long way for technology to go — and according to them SMART by GEP was ahead of the curve — I am listing the top-five challenges below opening up for a discussion on how the world of technology can resolve them.

  1. Extremely poor to non-existent master data, often outdated due to lack of maintenance
  2. No such thing as a catalog, causing a lack of choice; procurement team cannot look up material to place orders or schedule releases
  3. Every order is for a new material or service unless the material codes are maintained offline on paper
  4. No confirmation or orders reaching suppliers, or if the supplier will deliver as per timelines
  5. Suppliers suffer from similar issues — no connectivity, no complete definition of services offered, quite likely no contract and hence no invoice either, other than a verbal agreement and cash exchange

I look forward to researching more on these topics and post my thoughts and findings in subsequent posts. Direction and comments are most welcome.

For more interesting thinking on procurement, visit the GEP Knowledge Portal.

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