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A recent article in RFID Journal states that, according to Karen Butner of IBM, “the baseline for smarter supply chains really is about RFID, sensors, and actuators“. Really?
What smarter supply chains require is visibility … near real-time visibility to be precise. You don’t need RFID chips and sensors to get that. You need processes and procedures that make sure that the status of every package is recorded every time it changes location … from the supplier warehouse to the transport truck to the dock warehouse to the container to the cargo ship to the dock to the transport truck to your warehouse … and that this information is always accessible. The status can be manually updated by a receiving clerk that scans a barcode with a handheld device or, if you are challenged when it comes to new-fangled gadgets, enters a bar-code into a dumb-terminal … which can then indicate if the bar-code is recognized and the state change is expected.
That would seem to tell me that the basis of smarter supply chains with near real-time visibility is not overhyped RFID & sensor technology, but smart people following smart processes that use smart information technology. Am I wrong?
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Now that Procurement has received board attention as the greatest potential for cost savings in the organization, CPOs need to start planning on how they are going to keep that attention once the recession ends and the spending monkeys try to steal the spotlight again. Thinking (way, way) ahead, the CPO Agenda recently put together a good checklist for staying center stage that summarizes some of the key strategies that CPOs will need to pursue to help the board see Procurement as a driver of growth, innovation, and long-term cost reduction and not just a one-trick cost-saving pony.
- A Vision for Growth
- Value Chain
As the central point of the organization, Procurement is in a prime position to define organizational needs, asses the capabilities of internal resources, and define organizational core competencies. What other business unit touches not only every other business unit, but all of your partners as well?
- Solution Procurement
Procurement can source solutions that leapfrog current best-in-class and create a paradigm shift in customer value.
As the glue that binds modern organizations together, Procurement can play a critical role in the innovation process by bringing partners and ideas together.
- Customer Relationship Management
As the one business unit that has every other business unit as a customer, Procurement is in a prime position to help the company better meet its customer expectations.
- Supplier Relationship Management
Procurement is already managing supplier relationships on a daily basis … it just has to help the organization understand that it needs to be the central point and the channel by which supplier capabilities are secured to support the company’s growth agenda.
- Supply Chain Optimization
Without an efficient supply chain, companies cannot support the chosen customer needs. In order to achieve its plans, all aspects of a company’s supply chain MUST be optimized. Procurement is in the best position to do that.
- M&A Due Diligence
The ultimate success of a merger or acquisition depends on whether or not the combined organization will be able to deliver more savings and more value … Procurement is in the best position to help make that call.