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An article from late last year in the McKinsey Quarterly on “building better links in high-tech supply chains” did a great job of summarizing the roadblocks to collaboration in today’s high-tech supply chains and of providing great advice for building better bridges across your supply chain.

When you get down to the nitty-gritty, the following roadblocks are almost universally present in under-performing supply chains:

• Partner complexity and churnSupply chain partners often change as product designs and specifications evolve.
• Siloed forecastsManufacturing, Sales and Marketing, and Product Development often keep, and modify, their own copies of the forecast separately.
• Poor data qualityOEM forecasts, which set broad targets across a number of product lines, aren’t typically granular enough to be useful to partners.
• The spiral of mistrustExecutives often believe that they must guard information on their business plans and processes, even from partners.

However, with a little work, they can be removed. The advice given in the McKinsey article is good.

• Sledgehammer the SilosEveryone needs to work off of the same plans and forecasts.
• Trust is TantamountVery little is truly so confidential that it can’t be shared with (strategic) supply chain partners. For example, point-of-sale, customer forecasts, and primary market data will soon be public knowledge anyway (a supplier could walk in and see your product in a store, access public import/export records, and do a survey to see where most of your product ends up), so why not share the information up front? Confidential designs beyond the subassembly they’re building are one thing, forecasts are another.
• ShareWhy should your partners use their own separate distribution networks with overlapping inventory hubs and logistics systems, which only increases costs for everyone? These assets can, and often should, be shared … and this will reduce costs for all parties.
• CollaborateUndertake joint product development, at least on the components your partner is responsible for. After all, they’re the true experts and given the freedom to come up with a design that conforms to a few parameters might save you a bundle of cash. Look at what Tata Motors did. You could do that to.

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Gene Tyndall, editor of CSCO Insights, recently penned a piece on how the “recession offers chief supply chain officers opportunities as well as challenges” which I believe is a must read because I do not think enough organizations are taking advantage of the opportunity provided to them to become the organizational superstars. Gene, who recommends that organizations pursue smart cost reductions, indicates that these smart cost reductions are likely to be found in your:

• Overall Supply ChainAs many companies have found, going global typically adds unexpected costs, increased time, and risk. However, innovation and intelligence focussed on the problem by an experienced organization can often reduce these costs, time, and risks.
• Supply Chain NetworkProduction and logistic locations add costs in the form of fixed capital, operations, taxes, leasing, and SG&A expenses to the business. Rationalizing the global network can reduce these costs.
• Total Delivered CostThe total delivered cost, which includes freight, duties, taxes, and logistics, can often be reduced through better logistics, duty, and tax planning.
• Logistics OutsourcingThis industry has rapidly matured over the last decade, and a 3PL provider with an appropriately designed network might be able to save you money.
• Supply Chain TechnologiesWhile traditionally thought of as long-term cost reductions, there are near-term savings potentials through today’s rapid implementations, improved visibility, powerful analytics, and greater alignment of technology to the business. Especially if you go pay-as-you-go SaaS. e-Sourcing will allow you to identify potentially lower-cost and higher-quality sources of supply, decision optimization will allow you to define the allocation with the lowest cost that meets all of your business requirements, contract management will allow you to monitor and ensure provisions and pricing are being met, e-Procurement will automatically do m-way matching and flag invoices that aren’t at contracted amounts or duplicate billings, etc.

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A recent article in Supply Chain Leader on “synchronizing supply chain applications with continuous change” had some good tips on how to manage the challenges that come with any technology deployment, including technology deployed to support the supply management organization. As the article notes, even the best designed applications won’t deliver with a deploy-and-do-nothing approach. Value comes from continual use, and continual upkeep, and this only happens if you conquer the challenges and get the adoption levels you need, quickly.

According to the article, these are four of the biggest challenges and the best ways to combat them:

• Operational ChallengesRetaining operational knowledge is a challenge for the best of organizations. A continual commitment to training and employee process ownership is key.
• Evolutionary ChallengesContinuously changing demand requirements, competitive pressures, and supply arrangements put a strain on even the most agile supply management departments. They key to success is to continually monitor application usefulness, and when performance starts to slide, refine the models, data, and application thereof. This will require regular maintenance and updates for an on-premise application, or regular product direction councils with your SaaS vendor to make sure the application stays as relevant as the day you bought it.
• Organizational ChallengesMany applications are implemented to respond to certain business needs, but priorities shift over time. As attention gets diverted, applications lose executive sponsorship and the (financial) support required to keep them relevant. In order to make sure this doesn’t happen, current and potential application usefulness needs to be reviewed every year along with the potential savings that could be realized if the application obtained the necessary support. Then, a business plan that presents the ROI can be prepared to secure necessary funding. And if the ROI isn’t there, you know it’s time to replace the application with a more appropriate one, and you can focus your efforts on building that business plan instead.
• Infrastructure ChallengesAs the technology landscape continues to evolve, new hardware and middleware releases bring new technology and innovations to the table. Every upgrade of infrastructure opens questions of compatibility, both backward and forward, requiring business applications to be upgraded. But if you keep track of your current compatibility requirements in a compatibility matrix, and analyze upgrade requirements before a planned upgrade, you can insure that the infrastructure environment evolves to support your application needs.