Some supply chain dangers cut through technology


There are numerous risks to operating a modern, international supply chain. There are markets for goods all over the world if company managers choose to seek them out. However, these opportunities are only accessible through the addition of significant risk to the business equation.

KPMG analysts Bryan Cruickshank and Richard Nixon recently wrote for the Financial Times that some leaders in the logistics field can cut down the many dangers to their supply chain processes through the careful application of technology.

High tech versus advanced risk

According to the analysts, technology and procurement leaders can become more effective by working together. Supply chain management heads and their IT counterparts can understand a company's internal data better as a team than they could separately. The source stated that supply leaders with allies in the tech section can determine how fast data is required and which figures are vital.

Cruickshank and Nixon advocated more culpability for the chief information officer in the supply chain. They stated that risk management in logistics is such an important process that it must be brought to the corporate board's attention. If the CIO is responsible for possible failures, they will become a strong part of the agenda.

The tech deployments needed to make procurement work are, according to the KPMG researchers, different from general ERP systems. Firms are encouraged to invest in new systems specifically made to enhance the acquisition process rather than simply granting more access to general processes. In cases where specific systems still fail to improve productivity,  Cruickshank and Nixon offered that companies should determine if the problem is an inappropriate system or a lack of proper training and rectify it at the source.

Finance and tech

Technology is not the only outside section that can boost supply chain management through close alliances. Supply Chain Digital contributor Drew Hofler contended that finance is also teaming with procurement to make the processes involved more of a priority. He stated that CFOs are placing more faith and financial responsibility in the procurement arena. While it was once viewed as simply a section tasked with acquiring goods at low costs, the department is now a strategic asset.

Hofler also had a positive view of technology's role in the transformation. CFOs are ready to see money managed in the supply chain due to the expansion of new automated systems. Managers in procurement have begun to help budget, stay aware of general performance risks and take the lead when pressing the company into new business areas.